Summary of project cost management

/project Cost management process: Cost estimation, cost budgeting, cost control.

Reasons for runaway costs include:

(1) The cost estimate and the cost budget work are not meticulous.

(2) There are no uniform standards and norms.

(3) Cost control is not well done.

1. Cost estimate (Money):

(1) Definition: A cost estimate is an approximate estimate of the cost of the various resources necessary to complete the activities of the project.

Project Cost = project costs + profitability.

(2) Three steps:

Identify and analyze the constituent accounts of project costs;

Estimate the cost of each cost account according to the identified project cost constituent account;

Analyze cost estimation results and coordinate the proportional relationship between various costs.

(3) Input:

Enterprise environmental factors, organizational process assets, project scope specification, WBS, WBS dictionary, project management plan.

(4) Tools:

Analogy estimation method, determine resource rate, bottom-up cost estimate, project management software, seller bid analysis, reserve analysis, quality cost.

(5) Output:

Project cost estimation results, relevant supporting details files and results, request changes, cost management plans (updates).

2. Cost Budget (spend):

(1) Definition: It is the project's cost estimates are assigned to the project's specific work, to determine the project's work and activities of the cost ration, the development of project cost benchmark.

(2) Steps:

Allocate the total project cost to each work package of the project work breakdown structure;

The cost assigned to each work package is allocated two times to various activities;

Develop the project cost budget plan.

(3) Input:

Project scope specification, work breakdown structure, WBS dictionary, activity cost estimate, activity cost estimate support details, project schedule.

(4) Tools:

Cost total, management reserve, parameter model, the rationalization principle of expenditure.

(5) Output:

Cost baseline plan, project funding requirement, project management plan (update), request change.

3. Cost Control:

(1) Definition:

It is the project organization's management process to ensure that the actual cost of the project is controlled in a planned and budgeted manner by means of various methods, in order to guarantee the realization of its budgeted costs under changing conditions, in accordance with pre-developed plans and standards.

(2) Input:

Cost benchmarks, project funding requirements, project management plans, approved change requests, cost performance reports, job performance information.

(3) Tools:

Cost change control system, performance measurement, forecasting technology, project performance evaluation.

(4) Output:

Cost estimates (updates), cost baselines (updates), performance measures, forecast completion, requested changes, recommended corrective actions, organizational process assets (updates), project management plan updates.

Summary of project cost management