Cost Management Plan
The Cost Management Plan is a record that shows how the cost of a project will be determined, planned, managed, watched, and controlled throughout its lifetime. It is an important part of the plan for managing the project as a whole, and it helps make sure that the project is finished within the budget that was set.
The following parts make up the Cost Management Plan:
1. Cost Estimation Methodology: This is a list of the ways that the project’s prices will be estimated. This could involve estimating from the top down or the bottom up, or a mix of the two.
2. Cost Baseline: This is the project’s accepted budget. It is used as a point of comparison between real costs and expected costs.
3. Cost Control Measures: This part describes the processes and methods that will be used to track and control costs during the project. This could include regular reviews of costs, ways to keep track of changes, and techniques for managing gained value.
4. Reporting Styles: This part explains how cost reports are made and how often they are made. This could include sending regular reports to the project team and other interested parties, as well as making special reports as needed.
5. Roles and Responsibilities: This part explains the roles and responsibilities of the project manager, the cost analyst, and the project planner when it comes to cost management.
Cost Management Tools: This part describes the charts, project management software, and financial management tools that will be used to help with cost management.
The Cost Management Plan is a live document that should be changed often as the project’s scope, plan, and budget change.
Key Points
– A cost management plan functions as a road map for managing money in a project.
– It describes how project expenses will be calculated, budgeted, and managed.
– It contains techniques for predicting spending and building a budget.
– This plan specifies who is in charge of managing the funds and how they will do it.
– It also explains how to monitor and limit expenditure to keep things on track.
– Consider it a financial technique that aids in keeping the project inside its budgetary constraints.