Cost Management
- Cost Management
- the endeavor management task
of properly managing the costs associated with an
endeavor or
center
As illustrated in the preceding figure, Cost Management is part of the following inheritance hierarchy:
- Type: Abstract
- Superclass: Endeavor Management Task
- Subclasses:
- Endeavor Cost Management
- Center Cost Management
The typical responsibilities of Cost Management are to:
- Estimate an adequate and accurate budget.
- Ensure that the resulting budget is approved by the appropriate stakeholders.
- Ensure that budgeted funds are allocated.
- Ensure that either the:
- Endeavor is completed within its approved budget.
- Center operates withing its approved budget.
- Minimize risks due to cost overruns.
Cost management typically may begin when the following preconditions hold:
- Either the:
- Endeavor has started or the
- Center exists.
- The
management team is adequately:
- Staffed.
- Trained in cost management.
Cost management is typically complete when the following
postconditions hold:
- Either the:
- Endeavor has been completed or the
- Center has been retired.
Cost management involves the following teams performing the
following steps in an iterative, incremental, parallel,
timeboxed, and ongoing manner:
- The management team:
- Estimate future costs.
- Budget future costs.
- Obtain budget approval.
- Obtain required financial resources.
- Track current costs against budgeted costs.
- Perform associated trend analysis.
- Maintain the budget.
- Contain (control) costs against the budget.
- Document and report both budgeted (estimated) and
actual costs.
Cost management typically involves the following techniques:
- Budgeting
- Cost accounting
- Spreadsheets
Cost management typically results in the production of the following work products:
- Scope creep is a major cause of cost overruns.
