MindMap Gallery Chapter 7 Project Cost Management
This chapter mainly includes the following contents: Core idea Planning Cost Management Planning Process Group Estimate Costs Planning Process Group Develop Budget Planning Process Group Control Cost Monitoring Process Group Welcome everyone to learn and communicate ~
Edited at 2023-04-15 22:35:40One Hundred Years of Solitude is the masterpiece of Gabriel Garcia Marquez. Reading this book begins with making sense of the characters' relationships, which are centered on the Buendía family and tells the story of the family's prosperity and decline, internal relationships and political struggles, self-mixing and rebirth over the course of a hundred years.
One Hundred Years of Solitude is the masterpiece of Gabriel Garcia Marquez. Reading this book begins with making sense of the characters' relationships, which are centered on the Buendía family and tells the story of the family's prosperity and decline, internal relationships and political struggles, self-mixing and rebirth over the course of a hundred years.
Project management is the process of applying specialized knowledge, skills, tools, and methods to project activities so that the project can achieve or exceed the set needs and expectations within the constraints of limited resources. This diagram provides a comprehensive overview of the 8 components of the project management process and can be used as a generic template for direct application.
One Hundred Years of Solitude is the masterpiece of Gabriel Garcia Marquez. Reading this book begins with making sense of the characters' relationships, which are centered on the Buendía family and tells the story of the family's prosperity and decline, internal relationships and political struggles, self-mixing and rebirth over the course of a hundred years.
One Hundred Years of Solitude is the masterpiece of Gabriel Garcia Marquez. Reading this book begins with making sense of the characters' relationships, which are centered on the Buendía family and tells the story of the family's prosperity and decline, internal relationships and political struggles, self-mixing and rebirth over the course of a hundred years.
Project management is the process of applying specialized knowledge, skills, tools, and methods to project activities so that the project can achieve or exceed the set needs and expectations within the constraints of limited resources. This diagram provides a comprehensive overview of the 8 components of the project management process and can be used as a generic template for direct application.
Chapter 7 Project Cost Management
Core idea
Core concepts of item cost management
The cost of resources required to complete project activities
Different stakeholders will use different methods to calculate project costs at different times.
Project decisions impact the use, maintenance and support costs of project products, services or results
Project Cost Management Trends and Emerging Practices
Earned value management EVM.
Earn Progress ES
Tailoring considerations
knowledge management.
Estimating and budgeting. Earned value management. Use of agile methods. Governance
Considerations for agile, adaptive environments
Planning Cost Management Planning Process Group
The main role is to provide guidance and direction on how to manage project costs throughout the project period.
enter
Project Charter
Pre-approved financial resources
project management plan
progress management plan
risk management plan
business environment factors
Organizational culture and structure that can influence cost management
Market conditions, which determine which products, services and results are available in local and global markets
Currency exchange rates are used to convert project costs incurred in multiple countries.
Published Business Information.
cost data
Differences in productivity between regions can have a huge impact on project costs
Project management information system can provide a variety of solutions for managing costs
organizational process assets
Financial control procedures.
Knowledge base of historical information and lessons learned
Financial database. Existing formal and informal policies, procedures and guidelines related to cost estimating and budgeting
Tools & Techniques
expert judgment
Previous similar projects. Information from industries, disciplines and application areas. Cost estimates and budgets.
Earned value management
data analysis
Alternatives Analysis
Meeting
project manager. Project sponsor. Selected project team members
Selected stakeholders. Project cost owner. Other necessary personnel
output
cost management plan
unit of measurement. Accuracy. Accuracy. Organization procedure link.Control critical value
performance measurement rules
Define the control accounts used for performance measurement in the WBS. Determine the proposed EVM technology
Specifies the tracking method, and the EVM formula used to calculate the project completion estimate
report format
Other details
Description of strategic financing options. Procedures for dealing with exchange rate fluctuations. Procedures for recording project costs.
Estimate Costs Planning Process Group
The main function is to determine the funds required for the project
enter
project management plan
Cost management plan. Quality management plan
Scope Baseline
Project Scope Statement. 2 Work breakdown structure WBS (interrelationship)
WBS Dictionary. Deliverables are listed. The work required by each component of the WBS to produce deliverables
project files
Lessons Learned Register .Project Schedule .Resource Requirements .Risk Register
business environment factors
Market conditions. Published business information. Exchange rates and inflation rates.
organizational process assets
Cost Estimation Policy. Cost Estimation Template .
Knowledge base of historical information and lessons learned
Tools & Techniques
expert judgment
Similar projects in the past. Information from industry disciplines and application areas. cost estimating method
analogy estimation
Estimating parameter values or attributes from similar projects in the past.
Lower cost, less time consuming, but also less accurate
This technique is often used when project details are insufficient. Also called top-down estimation, it is a rough estimate
parameter estimation
Use an algorithm to calculate cost or duration based on historical data and project parameters
Accuracy depends on the maturity of the parametric model and the reliability of the underlying data
Bottom-up estimation
Summarize the WBS layer by layer from bottom to top. Make the most specific and detailed estimate of the cost of a single work package or activity, and then summarize it.
three point estimate
The most likely cost CM. The most optimistic cost CO. The most pessimistic cost CP. Consider uncertainty and risk in estimates
Triangular distribution. Divide by 3. Beta distribution. Divide 6-definitely read the question:
data analysis
Alternatives analysis. quality cost
Reserve analysis
Contingency reserve. Included in the cost baseline. Known-unknown risks. At the project manager's disposal. Part of the budget.
Manage reserves. Unknown - unknown risk. The project manager needs to apply and go through the change process
project management information system
Electronic forms. Simulation software. Statistical analysis tools
decision making
vote
output
Cost Estimate
.Project document updates.Assumptions.Log.Lessons learned register.Risk register
Estimate basis
Documentation of the basis for the estimate. Documentation of all assumptions. Documentation on various known constraints
Documentation of identified risks that should be considered when estimating costs. A description of the estimate interval.
A description of the confidence level in the final estimate
Develop Budget Planning Process Group
The main role is to determine the cost baseline against which project performance can be monitored and controlled. Determine cost baseline
enter
project management plan
Cost Management Plan. How to incorporate project costs into the project budget
Resource Management Plan. Scope benchmark.
1 Scope statement.
2WBS.
.WBS Dictionary
project files
Basis for estimation. risk register
Cost estimate.0 Coarse magnitude. - 25%~75%
Certainty -5%~10%
Project schedule. Project activities. milestone. Work packages and control accounts. Plan start and finish. Period
business documents
Business case. Revenue Management Plan. protocol. Business environment factors. exchange rate
organizational process assets
Existing policies, procedures and guidance related to cost budgeting
Knowledge base of historical information and lessons learned. Cost estimating tool.
reporting method
Tools & Techniques
expert judgment
Similar projects in the past. Information from industries, disciplines and application areas. Financial principles. Funding requirements and sources.
cost summary
Aggregated into work packages. Work packages are rolled up to higher levels in the WBS (e.g. control accounts)
data analysis
Historical information review.Fund limit balancing.Financing
output
Cost Baseline Control Account
0 Contingency Reserve.2 Work Package Cost Estimate. Activity contingency reserves. Activity cost estimates
Approved project budget allocated by time period, excluding management reserves
Project funding requirements
Project Budget = Cost Baseline Management Reserve
Project file updates
Cost Estimate
Project schedule
risk register
Control Cost Monitoring Process Group
The main role is to maintain the cost baseline throughout the project
Project cost control includes
Influence factors that cause cost basis changes. Ensure all change requests are processed promptly
Ensure that cost expenditures do not exceed the approved funding limit, that is, the limit allocated by time period, by WBS component, by activity, or the total project limit
Monitor cost performance and identify and analyze deviations from cost baselines. Manage changes as they actually occur
Report all approved changes and their associated costs to stakeholders. Try to keep expected cost overruns within acceptable limits
Monitor work performance against capital expenditures to prevent unapproved changes in cost or resource usage reports
enter
project management plan
Cost management plan (how to manage and control project costs). Cost Baseline . performance measurement benchmarks
project files
Lessons learned register. Project funding requirements. job performance data
organizational process assets
Existing formal and informal policies, procedures and guidelines related to cost control. Cost Control Tools . Available monitoring and reporting methods
Tools & Techniques
expert judgment
Deviation analysis. Earned value analysis. predict. financial analysis
data analysis
Earned Value Analysis EVA. Plan value PV. Earned value EV. Actual costAC
Deviation analysis
Progress deviation SV=EV-PV. Difference between earned value and planned value
Cost deviation CV=EV-AC
Schedule Performance Index SPI=EV/PV.< 1.0 The completed workload does not meet the planned requirements.
>1.0 The amount of work completed exceeded plan
Cost performance index CPI = EV/AC
When the CPI is greater than 1.0, it means there is a balance in costs so far.
trend analysis
chart
predict
Estimate at Completion EAC=AC Bottom-up ETC
.Assume that ETC is completed at the budgeted unit price
EAC=.AC (BAC-EV)
Assume that ETC.EAC= BAC/PCI is completed with the current CPI
Assume that SPI and CP| affect ETC.EAC= AC [(BAC-EV)/(CPIxSPI)] at the same time
Reserve analysis. Contingency reserves. Management reserves
To-Complete Performance Index TCPI
The smaller the better.
If BAC is clearly unfeasible, consider using predicted EAC and replace BAC with approved EAC
TCPI=(BAC-EV)/(BAC-AC).
TCPI=(BAC- EV)/(EAC- AC).
project management information system
For monitoring PV, EV and AC. Draw trends
output
cost forecast
Document it and communicate it to stakeholders. change request
Project Management Plan Update
Cost management plan. Cost basis. performance measurement benchmarks
ProjectFileUpdate.Hypothesis.Log
Basis for estimation. Cost estimates. Lessons learned register. risk register