System Integration Knowledge Point finishing (iv.) cost management

Project Cost Management

I. Content of project cost management

	Start	Plan	Perform	Monitoring	Closure
Project Cost Management		1. Develop a cost management plan 2. Cost estimation 3. Cost budgeting		1. Cost control

Ii. content of project cost management

Activities	Input	Tools and Technologies	Output
Develop a cost management plan	1. Project Charter 2. Scope specification	1. Templates, forms and standards 2. Expert Judgment	1. Project Management cost plan
Cost estimation	1. Project Scope specification 2. Work breakdown Structure	1. Analogy estimation 2. Determining Resource Rates 3. Bottom-up estimation 4. Parameter estimation 5. Project management software 6. Supplier Bidding analysis 7. Reserve Analysis (Contingency reserve) 8. Quality Cost	1. Activity Cost Estimation results
Cost budgeting	1. Activity Cost Estimation	1. Cost Summary 2. Reserve Analysis (Management reserve) 3. Parameter estimation 4. Balance of financial constraints	1. Cost Benchmark
Cost control	1. Cost Benchmark	1. Performance measurement Analysis	1. Cost Estimation (update) 2. Cost budgeting (update)

Iii. important points of knowledge

1. Cost estimation

1.1. Steps for cost estimation

(1) Identification and analysis of the cost of the constituent account.

(2) estimate the cost size of each account based on the identified project cost component account.

(3) Analysis of cost estimates, to identify a variety of costs that can be substituted for each other, to coordinate the ratio between the various costs.

1.2. Emergency reserve

Contingency reserve is an estimated cost that is freely used by the project manager to handle expected but uncertain events, known as known unknowns, as part of the project scope and cost benchmarks.

2. Cost budgeting

2.1. Steps for cost budgeting

(1) The total cost of the project is apportioned to each work package of the WBS. Decomposition according to the top-down, depending on the amount of resources used to set different decomposition weights.

(2) The cost of each work package is redistributed to the activities contained in the work package.

(3) Determine the time plan and project cost budget plan of each cost budget expenditure.

2.2. Management Reserve

A management reserve is a budget that is reserved for unplanned but potentially required project scope and cost changes. They are "unknown unknowns", and project cleanup must be approved before use, not part of the cost baseline.

3. Cost-Cost control

3.1. Content of cost control

(1) Exert influence on the factors that cause the change of cost base.

(2) Ensure that the request for change is agreed.

(3) When the change occurs, manage the actual change.

(4) To ensure that the potential cost overruns do not exceed the authorized project stage funds and overall funds.

(5) Supervise the cost performance and find out the deviation from the cost benchmark.

(6) Accurately record all deviations from the cost benchmark.

(7) Prevent erroneous, non-approved, unauthorized changes to be included in the cost or Resource Usage report.

(8) Notify the project stakeholders of changes to the validation.

(9) Take measures to control the anticipated cost overruns within an acceptable range.

3.2. Reasons for runaway costs

(1) Insufficient understanding of the project.

(2) The system is not sound.

(3) Methodological issues.

(4) Technical constraints.
3.3.CPI less than 1,spi less than 1 o'clock, the project manager should take measures

(1) Replace inefficient personnel with efficient personnel

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System Integration Knowledge Point finishing (iv.) cost management