This is the last process for the cost management knowledge area, and as a monitoring and control process, it has the outputs that are typical for such a process: work performance information, change requests, and updates to the project management plan. There is one output that is specific to this knowledge area and that is cost forecasts.
Let’s go over the outputs for this process.
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7.4.3 Control Costs: Outputs
7.4.3.1 Work Performance Information
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One of the inputs to this process was work performance data, which represented in the case of this process the actual costs associated with the activities done in the last reporting period. Among other things, this process takes those actual costs and compares them to the costs that were projected as part of the project budget, and determines whether there are any variances. If there are any, the data regarding the variances and any preliminary determination as to those cause are considered work performance information which the project team can use to determine what change requests (see paragraph 7.4.3.3 below) to implement in order to correct them.
7.4.3.2 Cost Forecasts
As one of the results of trend analysis and forecasting, two data analysis techniques used in this process, an estimate of how much the project will now cost in order to complete may be done, and this quantity called the Estimate At Completion or EAC may be documented for inclusion in reports to stakeholders.
7.4.3.3 Change Requests
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As mentioned above in paragraph 7.4.3.1, if variances between the actual costs and the proposed costs (i.e., what is in the project budget) are uncovered by this process, there may be change requests proposed in order to correct these variances and to bring the costs in line with what is in the plan or budget. These change requests are then input, as are all other change requests from different knowledge areas, to the main change control process 4.6 Perform Integrated Change Control.f
7.4.3.4 Project Management Plan Updates
As a result of this process, some of the components of the project management plan may be updated. These include the following:
- Cost management plan-feedback from relevant stakeholders may require a change request to moderate the guidelines for this process, including control thresholds or specified levels of accuracy when reporting the project’s cost.
- Cost baseline-if there are any changes in cost estimates uncovered as a result of this process, the change request may require changes to the cost baseline. Remember, a change request can either
- change the work to fit the plan (with a defect repair, corrective action, or preventive action)
- change the plan to fit the work (if the original cost estimates prove to be unrealistic based on new knowledge gained in the last reporting cycle)
- Performance measurement baseline-any approved changes in the cost baseline will affect the performance measurement baseline. For example, if there are changes in cost estimates for a given activity, the planned value or PV of that activity may change, and when that activity is completed, its earned value of that value may change as well. Since all of the earned value analysis measurements such as SPI, SV, CPI, and CV depend on the value of EV, this will have an effect on those derived values as well. If the affect on the performance measurement baseline is large, it may require recalculating the project budget as a whole (the budget at completion or BAC) and/or the remaining budget to be spent (the estimate to completion or ETC).
The next post will start on the next knowledge area, that of quality management!
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