Cost Management

 

 

Inputs

Function

Outputs

Identify Levels and Number of Each Resource

Resource Planning

Resource Requirement Document

Develop Cost Estimate by Task and Item

Cost Estimating

Cost Estimate

Allocate Task Cost Estimate to Work Items

Cost Budgeting

Cost Baseline

Monitor Baseline and Changes in Cost

Cost Control

Cost Revisions and Budget Updates; Corrective Actions; Recovery Plans

Key Factors for Success:   Accurately estimate required skills; accurately estimate productivity of each resource; accurately estimate cost of all purchased items;  correctly estimate true life-cycle cost of ownership (maintenance, taxes, depreciation, shipping, professional services); get buy-in from line managers for resource commitments; get priority commitment from key resources

Key Techniques and Tools: Use company skills databases if documented; skill needs matrix; use historical information and accounting data if available; pad budget under cost ceiling; gap analysis; recovery plans

Key Concepts: Avoid training your consultant's rookies; push for Early Start Dates/Early Finish Dates to counteract start-up inertia, reaction time and discovery projects; get all procurement considerations documented in writing

Back to Project Management

 

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