Chapter 6 Cost Management. Ending the reliance on the budget variance. Chapter overview. Planning for cost management Estimating project costs Pulling the budget together Controlling project costs Crashing the schedule. Planning for cost management.
Ending the reliance on the budget variance
Planning for cost management
Estimating project costs
Pulling the budget together
Controlling project costs
Crashing the schedule
It is the planning process that establishes the policies, procedures and documentation for planning, managing, expending and controlling project costs, given different stakeholders -
contribute different amounts of funding
measure costs differently
report costs in different ways
control costs at different times
Group decision making
Published commercial data
Cost Slope = Crash Cost – Normal Cost Normal Duration – Crash Duration
How would a cost management plan address the challenges of managing project costs within the internal financial procedures and accounting codes of the organisation?
What are some of the challenges estimating project (resource) costs, and how can these be overcome?
What benefits do budgeting processes bring to projects, and what weaknesses to they possess?
What does traditional budgeting fail to report and control in project management?
How does earned value management provide for both schedule and cost performance reporting, analysis and forecasting?
Discuss why a cost management plan is needed in addition to existing organisational financial systems, processes and controls
Review the estimating techniques and identify learner preference and rationale
Flowchart the budget preparation and management activities
Critique a budget report looking for how it addresses historical and forecast project performance
Discuss where earned value management may not be applicable (and why) in some projects
Create a cost management plan that will be effective in guiding and directing how project costs are dealt with throughout the project
Develop a template for a non-traditional budget that captures more meaningful and relevant data
Generate an earned value report (Excel or MS Project) on a current report and assess both past and future performance
Short answer questions
Multiple choice questions