Purpose:
Provides the means to recognize variance from the plan in order to take corrective action and minimize risk.
Objective:
Monitoring the status of the project to update the project costs and managing changes to the cost baseline.
Description:
Updating the budget requires knowledge of the actual costs spent to date. Any increase to the authorized budget can only be approved through the Perform Integrated Change Control process. Monitoring the expenditure of funds without regard to the value of work being accomplished for such expenditures has little value to the project, other than to allow the project team to stay within the authorized funding. Much of the effort of cost control involves analyzing the relationship between the consumption of project funds to the physical work being accomplished for such expenditures. The key to effective cost control is the management of the approved cost baseline and the changes to that baseline.
Project cost control includes:
- Influencing the factors that create changes to the authorized cost baseline
- Ensuring that all change requests are acted on in a timely manner
- Managing the actual changes when and as they occur
- Ensuring that cost expenditures do not exceed the authorized funding by period, by WBS component, by activity, and in total for the project
- Monitoring cost performance to isolate and understand variances from the approved cost baseline
- Monitoring work performance against funds expended
- Preventing unapproved changes from being included in the reported cost or resource usage
- Informing appropriate stakeholders of all approved changes and associated cost
- Bringing expected cost overruns within acceptable limits.
RASIC:
Inputs:
- Project Management Plan
- Project Funding Requirements
- Work Performance Data
- Organizational Process Assets
Outputs:
- Work Performance Information
- Cost Forecasts
- Change Request
- Update Project Management Plan
- Updated Project Documents
- Updated Organizational Process Assets
Controls:
- Earned Value Management
- Forecasting
- To-Complete Performance Index
- Performance Reviews
- Project Management Software
- Reserve Analysis
Task Instructions:
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Forecasts should be a jumping-off point for creativity and imagination, but too often forecasts are used to pretend that there is certainty and guarantees, writes Margaret Heffernan. “It’s so tempting to think that when the past and the present look the same, they must somehow be the same — and play out in the same ways,” she writes in her new book, “Uncharted: How to Navigate the Future.”
