Pmbok knowledge areas for project management guide 6. Project cost management the pmbok project cost management processes as previously stated, money is usually one of the key constraints of any project and this process is therefore all about defining the budget and managing the actual project costs within it. When integrated with the scopequality of the project and time management, these three functions form the core of project management. Project cost management this knowledge area in pmbok pdf involves planning, estimating, budgeting, financing, funding, managing and controlling costs. A project management plan is a formal, approved document that defines how the project is executed, monitored and controlled pmbok guide 4 th edition. A guide to the project management body of knowledge pmbok. Project cost management the software engineering group. Project management plan direct and manage project work 4. The pmbok outlines a framework and best practices that project managers can utilize to manage projects successfully.
Pmp certification study notes 7 project cost management. Successful cost management and value engineering in construction is based on accurate and early estimations of cost, and this book is the quickest route to creating a cost plan from scratch. A guide to the project management body of knowledge pmbok guide 2000 edition 2000 project management institute, four campus boulevard, newtown square, pa 190733299 usa vii list of figures figure 11. Project cost management for project managers based on pmbok. In listing the reasons for the success of a project, the management of cost is. Project management plan quality management plan project life cycle description development approach 3. Cost management is forward looking and attempts to answer why, what it means and what can be done about it. Project cost management for project managers based on pmbok by dr. The wbs provides the work packages to be performed for the completion of the project. A guide to the project management body of knowledge. It is irrespective of project size whether it is small or big, how many resources and activities are in it, the process of figuring out the budget remains the same. It sets the format and standards by which the project costs are measured, reported and controlled. Many financial management techniques, such as roi, payback, and discounted cash flow, are used during this process.
It involves the production of a cost management plan, which is a component of the overall project management plan. Project cost management pmbok sixth edition proventures blog. It can either be at a summary level or detailed and maybe composed of one or more of subsidiary plans depending on the requirements of the project. Jan 04, 2018 when plan cost management is executed. The first of the processes within the knowledge area is called plan cost management. Its one of the 10 knowledge areas within the project management institutes pmbok guide.
Pdf project cost management l7 project cost mgmt 1. The key benefit of this selection from a guide to the project management body of knowledge pmbok guide, fifth edition book. Project cost management for project managers based on. From a guide to the project management body of knowledge pmbok guide, sixth edition, project management institute, inc. The pmbok focuses on earned value management for measuring and controlling a projects costs. Project management institute, a guide to the project management body of knowledge, pmbok guide fifth edition, project management institute, inc. Pmbok stands for project management body of knowledge. Moreover, inputs and tools and techniques are the very same for both plan cost management and plan schedule management. Cost management also endeavors to predict final outcomes and to provide strategic recommendations for changing or mitigating such.
Department of elder affairs ecirts project management plan page 7 section 2 about this document the project management plan describes the background, objectives, scope, project management approach, key deliverables, assumptions, governance structure, and a framework for risk management associated with the project. The project plan is a formal, approved document used to manage and control project execution. During the plan cost management process, the project manager. Estimate costs determine budget control costs processes and related tools and techniques are usually selected when defining the project life cycle and are documented in cost management plan. Project cost management nodoc, cost engineering data. The cost management function maintains its important focus at every stage throughout the life cycle of a project. A small business guide to cost management the blueprint. Plan cost management estimate costs determine budget control costs read our full post covering pmp cost. May 27, 2016 project cost management is the fourth of 10 project management knowledge areas within the pmbok.
Sample project management plan pmp this section of the project management plan should discuss the wbs, wbs dictionary, and schedule baseline and how they will be used in managing the projects scope. This series focusses on project management body of knowledge pmbok 6th. Earned value management method works well in conjunction with manual. Cost management is one of the primary functions of project managers. The change management plan provides the direction for managing the change control process and documents the roles and responsibilities of the change control board ccb. The pmbok controlling processes cost control have been expanded into four sections called cost tracking, cost reporting and metrics, cost control and changes, and cost closeout. Risk management plan risks are a must to consider while planning cost management, as it can impact the cost at large, in most of the project quantitative risk analysis is also done for. Pdf this book is part of a series of books titled project management. Please refer to pmbok guide fourth edition, page 167, figure 71. The pmbok pdf is the gold standard for project managers everywhere. Project management plan components include but are not limited to. The pmbok is currently on the 6th edition, which was published in 2017. Plan schedule management the first process in this knowledge area is plan schedule management which comes in the planning process group. In this pmp study material pdf, well cover all the processes in the cost.
Project integration management is the hardest ka to get your head. The purpose of cost management is to ensure project costs are planned based on project need, tracked, changed according to procedure and reported on a regular basis. An overview of pmbok the nine elements of project management. Guide to the project management body of knowledge pmbok, 5th edition. The cost management includes the processes involved in estimating. Overview of project management knowledge areas and project management. In the pmbok, the cost management knowledge area has 4 processes. A summary of pmbok practices cost management brighthub. Through this process we are establishing the policies, procedures, and documentation for planning, developing, managing, executing, and controlling the project schedule. Cost management should occur early in project planning in order to establish a framework for all cost management processes and ensure that the project does not go over budget. Pdf project management body of knowledge pmbok guide.
Components of the scope management plan include but, not limited to. T d jainendrakumar the cost management includes the processes involved in estimating, budgeting, and controlling costs so that the project can be completed within the approved budget. Although estimating cost and determining budgets can be one process on small projects, pmi separates them into two processes because the exam assumes the pm is managing a large project. Earned value management is a broad and powerful tool. It should be distributed as defined in the communications management plan e.
Pmbok knowledge areas for project management guide 6 edition. Cost management is not good to cost accountings being bad. Organizational process assets creating a scope management plan that documents how the project scope will be defined, validated, and controlled. Overview of project management knowledge areas and project management processes 8 figure 12. Scope plan provides guidanceon how scope will be defined, documented, verified managed and controlled. Pmp certification training what is project cost management.
Enterprise environmental factors organizational process assets. Pdf cost management of projects using a standard pmbok in. Csu project management certificate program project scope. Bottomup estimating involves estimating the cost and duration of the smallest activities and then adding them up to create the estimate for the whole of the project. Plan cost management will determine the method to establish the budget, which includes how and if it will. The important topics covered include cost management planning, cost. Youll find key concepts and terms, plan cost management, estimate costs, determine budget, and control cost. That is why, the cost management has been based on four plans include the resource, cost estimation, budget planning and cost control. Project cost management l7 project cost mgmt 1 project cost management project cost management overview plan cost management estimate costs determine budget control costs reference. It sets the format and standards by which the project costs are. For example, the cost mgmt plan can establish the following.
In the pmbok sixth edition the cost management plan is is created in the process 7. The second process involved with pmbok cost management strategies is cost budgeting. Through this process we are establishing the policies, procedures, and documentation for planning, developing, managing, executing, and. Project integration management is a collection of processes that outline.
Three of these occur in the planning process group as they involve the determination of the project budgets. May 04, 2018 the plan to manage the costs is categorized in the cost management knowledge area too. Project cost and budget management 1 0 hamid omidvar, 9. In this pmp study material pdf, well cover all the processes in the cost management knowledge area in pmbok guide 6th edition pdf. Lastly, computerized tools can provide great assistance in estimating cost in projects.
Apr 17, 2018 the concepts and processes on how to perform project cost management according to pmbok guide 6th edition. Level of accuracy rounding of the data, level of precision 2. Project time management in pmbok for better project. This helps in completing the project within the approved budget. When taking an examination that you need to prepare well your knowledge for your exam, thus firstly you should learn the concept and information included in your material. The cost management plan clearly defines how the costs on a project will be managed throughout the projects lifecycle. The plan cost management process is performed after the scope and schedule activities of the project scope management and project time management knowledge areas. Schedule management plan schedule management plan is required to understand the processes and the controls that will affect the cost estimating approach. Project management body of knowledge pmbok guide fourth edition. Apr 25, 2017 in this pmp study material pdf, well cover all the processes in the cost management knowledge area in pmbok guide 6th edition pdf. Refer to the project master project plan to obtain the projects wbs and refer to the project schedule management plan for a description of how the wbs was established.
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