Project Cost Management | PMBOK Video Course

[Music] hi everyone welcome back to the processes from the project management body of knowledge this one in particular is the overview for project cost

management as you can see project cost management we've gone through especially in our planning process group we've planned the scope so what we're going to

deliver the schedule so when we're going to deliver it and now looking at those two things we have a better idea of how much all of that is going to cost so

we're looking at estimating our costs determinating the determining the budget and then obviously controlling those costs so they don't go too far off track

the processes included in project cost management are planning cost management so the process for how we're going to do our cost management activities who is going to be involved what prout what

processes are we going to use to estimate our costs and then determine our budget and then ultimately what are we going to do to control the costs and ensure that they don't go too far off

track there are a lot of different inputs tools and techniques and outputs for this particular process group so we've got you know a lot of project

management plan as always a lot of EEF Sando pas that you'll see as inputs as always expert judgment is a really really big one but we've also got things like all of our estimating techniques

that we've seen in schedule as well we'll need to estimate for cost at the same time so we've got a lot of data analysis as well we're going to need to analyze how things are tracking and also

you know the information that we've gathered for our budget and of course we've got things like outputs for our and we've got estimates for our outputs

and then the baselines documents so our cost baseline and when we're controlling our cost project cost management we've again got expert judgment things like

data analysis and other being big one and then other things like our to complete performance index project management information system and then all of our you know change requests or cost forecasts work performance

information as outputs for that controlling that that particular process key concepts for project cost management we should consider the effect of project decisions

on the subsequent recurring cost of using maintaining and supporting the product the service or the result so how much is it going to cost when it goes

into business as usual so this is really really important it's no point in delivering something that doesn't cost anything if it's going to cost a lot

when it goes into business as usual it might just not be worth the money the project manager must also recognize that different stakeholders measure project costs in different ways and so we have

to be open to those different ways of estimating and those different ways of creating those cost estimates also the cost of an acquired item might be measured at different times so when the

acquisition decision is made or committed or when the order is placed or when the item is actually delivered or when the actual cost is physically

incurred so when they physically paid the money there are many different accounting practices that you'll come across and usually we just stick to one and then use that as our standard method

but you have to be aware that there will be different ways of doing this and you may have to chop and change depending on the stakeholders trends and emerging practices that you'll see as part of

projects cost management with its the urn schedule and actual time as part of our earned value management do make an appearance they're still not as not as

prominent really in our earned value management and in our trend analysis so looking at how our project is trending or varying from where we where we

planned and where we actually are but you will see that urn schedule is a new item for earned value management tailoring considerations for project cost management include knowledge

management so does the organization have formal knowledge management or is it something that you know you just have to do on an ad-hoc basis you had have to create something new yourself estimating and budgeting does the organization have

existing formal or informal cost estimating policies procedures or guidelines earned value management does the organization

use earned value management in managing projects and you know do you need to just use it for your particular project either way in many cases you will have to see how something you've planned is

is varying to something that's actually happening especially when cost comes into play so you will need to know if your budget is going off track and that's where your earned value management will come into it using agile

approaches so are we using agile methodologies how does that impact cost estimating if we're doing more lightweight estimating techniques and

governance and does the organisation have any formal or informal audit or governance policies procedures and guidelines considerations that you'll

see for agile and adaptive environments projects with high degrees of uncertainty so where there could be a lot of change happening in the scope or the schedule or the cost or where the

scope is not yet fully defined and it might sort of just get defined over time you know in through iterations through an iterative process but you might be

able to use lightweight estimation methods so maybe we can use a different estimation method like analogous estimating where it's easier to do and

it's faster to do and we can just get a really quick idea and we can adjust that as our iterations go on and on until our final product and our final cost

baseline is created this can generate a fast high-level forecast of project labor costs which can be easily adjusted over time detailed estimates are reserved for short-term planning so as

we have seen we've got our features and we plan in detail our activities just before that iteration so that's our short-term planning horizons and we can

do the same for cost so now we know that it's going to be this much and we've got a really good idea of how much it's going to cost whereas over here we don't have a very good idea at all it's just a

high-level view but that's the way that you might work in an environment and that is the detail around project cost management as an

overview for this process [Music]