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. Figure 7-1 provides an overview of the following three processes, while Figure 7-2 provides a process flow view of these processes and their inputs, outputs, and other related Knowledge Area processes:

7.1 Cost Estimating developing an approximation of the costs of the resources needed to complete project activities.

7.2 Cost Budgeting aggregating the estimated costs of individual activities or work packages to establish a cost baseline.

7.3 Cost Control influencing the factors that create cost variances and controlling changes to the project budget.

These processes interact with each other and with processes in the other Knowledge Areas as well. Each process can involve effort from one or more persons or groups of persons based upon the needs of the project. Each process occurs at least once in every project and occurs in one or more project phases, if the project is divided into phases. Although the processes are presented here as discrete elements with well-defined interfaces, in practice they may overlap and interact in ways not detailed here. Process interactions are discussed in detail in Chapter 3.

Project Cost Management is primarily concerned with the cost of the resources needed to complete schedule activities. However, Project Cost Management should also consider the effect...