PMP Certification: Project Cost Management Whats, Whens, and Whys (based on PMBOK® Guide, 6th Edition)


by Project Management Process Group

1. Plan Cost Management


  • WHAT Plan Cost Management Is. Plan Cost Management implies creating the cost management plan.
  • WHY Plan Cost Management Is Important. The Plan Cost Management process is where a project manager figures out all the work necessary to make sure the project stays within the estimated budget.
  • WHEN Plan Cost Management Is Executed. The Plan Cost Management process is performed after the scope and schedule activities of the Project Scope Management and Project Time Management Knowledge Areas. Moreover, inputs and tools and techniques are the very same for both Plan Cost Management and Plan Schedule Management. The two processes differ only for the output.

pmp 2018 project cost management whats whens whys pmbok guide 6th edition tipsographic main

Project Cost Management Whats, Whens, and Whys

by Project Management Process Group

1. Plan Cost Management


  • WHAT Plan Cost Management Is. Plan Cost Management implies creating the cost management plan.
  • WHY Plan Cost Management Is Important. The Plan Cost Management process is where a project manager figures out all the work necessary to make sure the project stays within the estimated budget.
  • WHEN Plan Cost Management Is Executed. The Plan Cost Management process is performed after the scope and schedule activities of the Project Scope Management and Project Time Management Knowledge Areas. Moreover, inputs and tools and techniques are the very same for both Plan Cost Management and Plan Schedule Management. The two processes differ only for the output.

2. Estimate Costs


  • WHAT Estimate Costs Is. Estimate Costs implies developing an approximation of costs associated with each of the resources – human and material – required for all schedule activities of the project.
  • WHY Estimate Costs Is Important. A project manager estimates how much everything will cost on the project using the Estimate Costs process and these estimates will be combined into a spending plan in the following Determine Budget process.
  • WHEN Estimate Costs Is Executed. The Estimate Costs process is a highly iterative process that is repeated throughout the life of the project. At every repetition, the activity cost is refined.

3. Determine Budget


  • pmp exam 2018 study guide free online course tipsographicWHAT Determine Budget Is. Determine Budget implies aggregating the individual activity cost estimates into a total project cost and applying the project schedule to establish the costs timing. The resulting cost baseline is used to measure the performance of the project throughout the remaining process groups.
  • WHY Determine Budget Is Important. The cost baseline, output of the Determine Budget process, reports a detailed budget that shows costs and timelines for each work package or activity.
  • WHEN Determine Budget Is Executed. Project managers must complete the other Planning processes—such as the Create WBS, Define Activities, and Estimate Activity Resources—before working on Determine Budget because some of their outputs become the inputs to this process. On the other hand, they can perform the Estimate Costs and Determine Budget processes at the same time.

4.Control Costs


  • WHAT Control Costs Is. Control Costs implies monitoring the project budget and managing variations to the cost baseline included in the project plan.
  • WHY Control Costs Is Important. The Control Cost process gives a project manager the tools and techniques to measure the performance of the project at a given point in time and to forecast the future performance of the project.
  • WHEN Control Costs Is Executed. A project manager performs Control Costs process regularly throughout the project. Its iterative nature emerges especially when project costs start to increase.

Click here for a detailed analysis of each project management process group and knowledge area.

SOURCES: Project Management Institute (2017). A Guide to the Project Management Body of Knowledge (PMBOK® Guide). 6th ed. Newtown Square: Project Management Institute.

pmbok 6th edition, project management certification, project management certification online, project management professional certification, project management certification exam, project management pmp exam, project management exam, project management institute pmp certification, program manager certification pmp, project management professional pmp certification, project management certification pmp, project management professional pmp, pmp online, pmp online training, pmp certification training online, pmp 2018.

Recommended for You

  •  
    7
    Shares
  • 6
  •  
  • 1
  •  
  •  

Project Management Glossary

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z



“PMP”, “PMBOK”, “PMI-ACP” and “PMI” are registered trademarks of the Project Management Institute, Inc. All rights reserved.

project management 2018 agile 2018 pmp 2018 tipsographic stefania

Hi, I am Stefania, hearth and keyboard behind Tipsographic, a free online resource for everybody interested in project management and agile. I specialize in project management tips, tools, and tricks. When I'm not writing, you can find me road cycling around Tuscany or spending time with friends and family.

Welcome to Tipsographic!