/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.
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