Project Management ToolBox: Tools and Techniques for the Practicing Project Manager

7

Cost Planning

The fashion of the world is to avoid cost, and you encounter it.

William Shakespeare

Major topics in this chapter are cost planning tools:

• Cost Planning Map
• Analogous Estimate
• Parametric Estimate
• Bottom-up Estimate
• Cost Baseline

Figure 7.1 The role of cost planning tools in standardized project management process.

These tools will focus on developing an estimate of costs and the Cost Baseline (see Figure 7.1). Performing this task requires information about the scope of project activities, required resources, and a schedule of project activities. The Cost Baseline is integrated with the scope and schedule baselines to form a project performance baseline, the core of the project plan and a foundation for all other project planning from organizational to quality to risk to communications planning. In the course of the project implementation, the project performance baseline will become a corner stone of cost control and your ability to deliver the project on budget. This chapter's intent is to help practicing and prospective project managers accomplish the following:

• Learn how to use various cost planning tools.
• Choose cost planning tools that correspond to their project situation.
• Customize the tools of their choice.

These skills are of vital importance in project planning and building a standardized PM process.

Cost Planning Map

What Is a Cost Planning Map? ...