PROJECT

COST
MANAGEMNET
OPMG405 Dr. Zakareya Yehia
By: Assem Abourashed 211000874
Motasem
Mustafa Khaled 211001992
Seif Nomair 202000022
Bassel Elnashar 202002197
 Introduction
How do we manage Project’s cost:

• Cost Management • Estimate Costs

Plan

• Determine Budget • Control Costs

 1.Cost management plan
Definition: An approach or plan detailing the estimation, budgeting, and control of project
expenses over the course of the project's life cycle. It is a fundamental component of the
project management framework, guaranteeing both financial accountability and alignment
with the goals of the organization.

Purpose: management and control is the main goal of the cost management plan. Through the
plan's defined framework for cost estimation, budgeting, and monitoring, project managers
can minimize financial risks and maximize resource utilization while making well-informed
decisions.
 1.Cost management plan

•Inputs:
•1-Project Scope Statement
•2-Resource Calendars (Schedule)
•3-Project Charter
•4-Risk Register
•5-Historical Information
•6-Environment Factors
•7-Human Resource Plans
•8-Organizational Process Assets
 1.Cost management plan
Techniques

•Expert judgement
•Analytical techniques
•Meetings
•Reserve analysis
•Cost of quality
 1.Cost management plan
Outcomes:
Accurate Budgeting
Cost Control
Risk Mitigation
Stake Holder Confidence
Project success
 2.Estimate costs
• Definition:
It’s the process of developing an approximation of the
cost of resources.
• Purpose:
Determines the monetary resources required for the project.
 2.Estimate costs

• Inputs:
• Project management plan
• Project documents
• Enterprise environmental factors
• Organizational process assets
 2.Estimate costs
• Techniques:
• Expert judgment
• Analogous estimating
• Parametric estimating
• Bottom-up estimating
• Three-point estimating
• Data Analysis
• Project management information system
 2.Estimate costs

• Outcomes:
• Cost estimates
• Basis of estimates
• Project documents updates
 3). Determine Budget:
- Definition :
- Determine Budget: is the process of aggregating the estimated costs of individual activities or work packages
to establish an authorized cost baseline. The key benefit of this process is that it determines the cost baseline
against which project performance can be monitored and controlled. This process is performed once or at
predefined points in the project.

- Purpose :
- Determining the Budget in Project Management: establishes an authorized cost
baseline by aggregating estimated costs, enabling effective monitoring and control of
project performance. It encompasses all authorized project funds, presenting an approved
time-phased budget with contingency reserves but excluding management reserves.
 3). Determine Budget:
• Inputs :
1) Project Management Plan: 3) Business Documents:
• Cost Management Plan.
• Business Case.
• Resource Management Plan.
• Scope Baseline. • Benefits Management Plan.
2) Project Documents:
4) Agreements.
• Basis of estimates.
• Cost estimates. 5) Enterprise Environmental Factors.

• Project schedule. 6) Organizational Process Assets.

• Risk register.
 3). Determine Budget:
• Techniques : 1) Expert Augment.

2) Cost Aggregation.

3) Data Analysis.

• Reserve Analysis.

4) Historical Information Review.

5) Funding Limit Reconciliation.

6) Financing.
 3. Determine Budget:
• Outcomes:

1) Cost Baseline.

2) Project Funding Requirements.

3) Project Documents Updates.

• Cost Estimates.

• Project Schedule.

• Risk Register.
 4.Control costs

• Definition: The process of monitoring the status of the project

to update the project’s costs and managing changes to the cost
baseline

• Purpose: Maintain the cost baseline throughout the project

 4.Control costs

• Inputs:
• Project management plan: Cost management plan, cost baseline
• Project documents: Lessons learned register
• Project funding requirements
• Work performance data
• Organizational process assets
 4.Control costs

• Techniques:
• Data analysis
• To-complete performance index
• Project management information
system
 4.Control costs

• Outcomes:
• Work performance information
• Cost forecasts
• Change requests
• Project management plan updates: Cost management plan, cost
baseline
• Project documents updates: Assumption log, basis of estimates,
cost estimates, lessons learned register, risk register.
 Conclusion

• . Project cost management is a crucial aspect of project

management, ensuring that projects are completed within the
approved budget and that resources are utilized efficiently. By
effectively planning, estimating, budgeting, financing, funding,
managing, and controlling costs, organizations can achieve project
success and maximize their return on investment.
 THANKS!
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