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.
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:
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.
#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.
Now your take on this argument.
We would also like to hear what you feel about the topic we discussed today. Your feedback is very important to us. Feel free to drop your comments and recommendations. If you have a contrary opinion, you can drop that too.
You can also like our Facebook Page CRMNigeria for more updates. You can do that by clicking on the link or searching for our page on Facebook.
You can also become part of our WhatsApp Group Here.
Enter your email address to get updates when we post our next article. you have to click on the link in the email sent to you to confirm your subscription. If you have been receiving our email updates and it is no longer active, please subscribe again.:
Delivered by FeedBurner
51 total views, 9 views today