6 Outputs Of Plan Cost Management For Projects

6 Outputs Of Plan Cost Management For Projects

 

 

In my previous article, I have talked about some of the inputs of plan cost management for projects. In this article, I want to talk about some of the outputs of the plan cost management for projects. Follow me as we look at it in this article.

outputs of plan cost management

Here are the outputs…

 

#1 Cost Management Plan

The cost management plan is a component of the project management plan and describes how the project costs will be planned, structured, and controlled. The cost management processes and there associated tools and techniques are documented in the cost management plan. 

 

A cost management plan can establish the following:

 

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Unit of measure: Each unit in measurements such as staff hours, staff days, or weeks for time measures, metres, litres, tons, kilometres or cubic yards to quantity measures or lump sum in currency form) is defined for each of the resources. 

 

Level of precision: This is the degree to which cost estimates will be rounded up or down based on the scope of the activities and the magnitude of the project. 

 

Level of accuracy: This is the acceptable range used in determining realistic cost estimates is specified and may include an amount for contingencies. 

 

#2 Organisational Procedure links

The work breakdown structure provides the framework for the cost management plan, allowing for consistency with the estimates, budgets, and cost controls. The WBS component used for the project costs accounting is called the control account. Each control account is assigned a unique code of account number(s) that links directly to the performing organisation’s accounting system. 

 

#3 Control Thresholds

Variance thresholds for monitoring cost performance may be specified to indicate an agreed-upon amount of variation to be allowed before some action needs to be taken. Thresholds are typically expressed as percentage deviations from the baseline plan.

 

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#4 Rule of Performance measurements

Earned Value Management (EVM(rule of performance measurements are set. FOr example, the cost management plan may: define the points in the WBS at which measurement of control account is performed.

 

It also established the EVM techniques e.g weighted milestones, fixed-formula, percentage complete among others to be employed. 

 

It also specifies tracking methodologies and the EVM computation for equations for calculating projected estimate at completion(EAC) forecasts to provide a validity check on the bottom-up EAC. 

 

#5 Reporting formats

The formats and frequency for the previous cost reports are defined.

 

#6 Addtional details

Also, additional details about cost management activities include description of strategic funding choices. It also highlights the procedure for an account for fluctuation in currency exchange rates as well as procedures for project cost recording. 

 

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Adeniyi Salau

Adeniyi Salau Scrum Master Certified , CCNA R&S , BeingCert and Scrum Certified Digital Marketing Professional, CEP, MOS, MCP, CSCU (Project 2016), Microsoft Certified Security and Networking Associate is a Google and Beingcert Certified Digital Marketer, Project Manager and SEO Expert of repute with about a decade of Blogging and online marketing experience. He is always ready to share his experience with others.

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