Eternal sunshine of the costless mind
So, it seems I’m overwhelmed with the concept of cost today. Cost Management is one of the primary functions of Project Managers. When integrated with the scope/quality of the project and time management, these three functions form the core of Project Management.
In the PMBOK® Guide, the Cost Management knowledge area has 4 processes:
- Plan Cost Management
- Estimate Costs
- Determine Budget
- Control Costs
Plan Cost Management is further explained in the following figure.
Cost estimating involves the assessment of “order of magnitude” estimates, project profitability, financing and acceptance. And that’s only one side of it.
Determine budget is the process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline.
Last, the process of cost control is the gathering, accumulating, analyzing, monitoring, reporting and managing the costs on an ongoing basis.
A fine diagram below explains the cost management process activities, among others.
