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Unformatted text preview: dule and need not only address the activity causing the deviation. .3 Lessons learned. The causes of variances, the reasoning behind the corrective action chosen, and other types of lessons learned from schedule control should be documented, so that they become part of the historical database for both this project and other projects of the performing organization. A Guide to the A Guide to the Project Project Management Management Body of Body of KnowledgeE L KnowledgeE PL MP AM SA S A Guide to the Project Management Body of Knowledge (PMBOK Guide) 2000 Edition 2000 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA NAVIGATION LINKS ACROYMNS LIST ACRONYMS LIST 81 ACROYMNS LIST Chapter 7 Project Cost Management
A Guide to the A Guide to the
Project Cost Management includes the processes required to ensure that the project is completed within the approved budget. Figure 7-1 provides an overview of the following major processes: 7.1 Resource Planning--determining what resources (people, equipment, materials) and what quantities of each should be used to perform project activities. 7.2 Cost Estimating--developing an approximation (estimate) of the costs of the resources needed to complete project activities. 7.3 Cost Budgeting--allocating the overall cost estimate to individual work activities. 7.4 Cost Control--controlling changes to the project budget. These processes interact with each other and with the processes in the other knowledge areas as well. Each process may involve effort from one or more individuals or groups of individuals, based on the needs of the project. Each process generally occurs at least once in every project phase. Although the processes are presented here as discrete elements with welldefined interfaces, in practice they may overlap and interact in ways not detailed here. Process interactions are discussed in detail in Chapter 3. Project cost management is primarily concerned with the cost of the resources needed to complete project activities. However, project cost management should also consider the effect of project decisions on the cost of using the project's product. For example, limiting the number of design reviews may reduce the cost of the project at the expense of an increase in the customer's operating costs. This broader view of project cost management is often called life-cycle costing. Lifecycle costing together with Value Engineering techniques are used to reduce cost and time, improve quality and performance, and optimize the decision-making. In many application areas, predicting and analyzing the prospective financial performance of the project's product is done outside the project. In others (e.g., capital facilities projects), project cost management also includes this work. When such predictions and analyses are included, project cost management will include additional processes and numerous general management techniques such as return on investment, discounted cash flow, p...
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