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PMP Training Project Cost Management Part 1

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As a part of PMP training here are the slides of project cost management part 1 presented by Skillogic Knowledge Solutions.

If you are looking for PMP training in Chennai, Bangalore, Delhi, Pune, Hyderabad and Mumbai, visit Skillogic.

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PMP Training Project Cost Management Part 1

  1. 1. PMI Project Management Professional (PMP)® Workshop
  2. 2. Project Cost Management © 2016 Skillogic Knowledge Solutions. All Rights Reserved 2
  3. 3. Project Cost Management © 2016 Skillogic Knowledge Solutions. All Rights Reserved 3 Integration Scope Time Cost Quality Human Resource Communications Risk Procurement Stakeholder
  4. 4. Cost Management Overview  Project Cost Management includes the processes involved in planning, estimating, budgeting and controlling costs so that the project can be completed within the approved budget  Life cycle Costing: A broader view of Project Cost Management that includes cost of using, maintaining and supporting the product, service or result of the project.  The cost management plan is a part of the project management plan.  The techniques for estimating the cost involved in performing each of the project activities are the same as estimating the time required.  Expert judgment, analogous estimating, bottom up estimating and reserve analysis are some of the techniques used in cost management. © 2016 Skillogic Knowledge Solutions. All Rights Reserved 4
  5. 5. 7.1 Plan Cost Management— The process that establishes the policies, procedures, and documentation for planning, managing, expending, and controlling project costs. 7.2 Estimate Costs— The process of developing an approximation of the monetary resources needed to complete project activities. 7.3 Determine Budget— The process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline. 7.4 Control Costs— The process of monitoring the status of the project to update the project costs and managing changes to the cost baseline. Cost Management Processes © 2016 Skillogic Knowledge Solutions. All Rights Reserved 5
  6. 6. Plan Cost Management Inputs • Project management plan • Project charter • Enterprise environmental factors • Organizational process assets Tools&Techniques • Expert Judgment • Analytical techniques • Meetings Outputs • Cost management plan © 2016 Skillogic Knowledge Solutions. All Rights Reserved 6 Guides on how costs are managed throughout the project course
  7. 7. Cost Management Plan (Output) Inputs Project Management Plan gives Scope baseline, Schedule baseline and other information like cost-relating scheduling and risks as inputs Project Charter provides summary budget Enterprise environmental factors like org. structure, location, currency rates are inputs because they can affect the cost Org. process assets like historical data will be useful for cost planning Tools & Techniques Expert Judgment is helpful for planning and controlling costs Analytical techniques like Decision Making Tools can help in making important strategic or purchasing decisions Meetings help in discussing and finalizing the cost management plan © 2016 Skillogic Knowledge Solutions. All Rights Reserved 7
  8. 8. Cost Management Plan (Part of “Develop Project Management Plan”) Note: This is the Output from Cost Management Process  Sets out format and establishes the criteria for planning, structuring, estimating, budgeting and controlling project cost Example: Cost Management Plan may establish:  Precision level (e.g. $100, $1000)  Units of measures (staff hours, staff days)  Organizational procedures links  Control thresholds  Earned value rules  Reporting formats  Process descriptions © 2016 Skillogic Knowledge Solutions. All Rights Reserved 8
  9. 9. Estimate Costs  Rough Order of Magnitude (ROM): Accuracy of project estimate will increase as the project progresses  During initiation: -50 to +100%  Definitive : - 5 to +10 %  Estimates include (not limited to) : labor, material, equipment, services, facilities as well as inflation allowance, contingency costs © 2016 Skillogic Knowledge Solutions. All Rights Reserved 9
  10. 10. Estimate Costs Determines the amount of cost required to complete the project Note: Cost estimates are a prediction that is based on the information known at a given point in time. Inputs • Cost management plan • Human resource management plan • Scope baseline • Project schedule • Risk register • Enterprise environmental factors • Organizational process assets Tools&Techniques • Expert Judgment • Analogous estimating • Parametric estimating • Bottom-up estimating • Three-point estimating • Reserve analysis • Cost of quality • Project management software • Vendor bid analysis • Group decision- making techniques Outputs • Activity cost estimates • Basis of estimates • Project documents updates © 2016 Skillogic Knowledge Solutions. All Rights Reserved 10
  11. 11. Estimate Costs Inputs Cost Management Plan gives guidance on how to manage costs HR Management Plan gives staffing details Scope baseline provides scope/WBS details for which estimates are to be made Project Schedule, Risk Register, Enterprise environmental factors and Org. process assets are the other inputs Tools & Techniques Expert Judgment is helpful for planning and controlling costs Analogous estimating, Parametric estimating, Bottom-up estimating, Three-point estimating and Group Decision making techniques are different estimation techniques Reserve Analysis, Cost of Quality and Vendor Bid Analysis are used in estimation assumptions to calibrate estimations PM Software will help to speed up estimation process to consider various alternatives quickly • Activity cost estimates • Basis of estimates • Project documents updatesOutputs © 2016 Skillogic Knowledge Solutions. All Rights Reserved 11
  12. 12. © 2016 Skillogic Knowledge Solutions. All Rights Reserved12 Skillogic Knowledge Solutions Call Us @ 901-989-9000 If you are looking for PMP Certification in Chennai visit: http://in.skillogic.com/pmp-training/pmp-certification-chennai

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