Please enable JavaScript.

Coggle requires JavaScript to display documents.

Cost Management (Control Costs process (tools and techniques (To-complete …

- - - - Here’s where you measure
        how your project is
        doing compared to the plan.
        
        BAC
        X
        Actual % complete
    - - The to-complete performance index (TCPI) is
        a calculation that you can use to help you figure
        out how well your project needs to perform in the
        future in order to stay on budget
      - TCPI = (BAC-EV)/(BAC-AC)
        
        CPI is greater than or equal to 1 and CV
        is positive. When this happens, your actual
        costs are less than earned value, which
        means the project is delivering more value
        than it costs.
        
        CPI is less than 1 and CV is negative.
        When your actual costs are more than earned
        value, that means that your sponsor is not
        getting his money’s worth of value from
        the project.
      - Keep your project
        on track with TCPI
        
        You can use earned value to gauge where you need to be to get your project in
        under budget. TCPI can help you find out not just whether or not you’re on
        target, but exactly where you need to be to make sure you get things done with
        the money you have.
        
        TCPI = (BAC-EV)/(EAC-AC)
        
        How much budgeted
        work is left divided by
        how much estimated
        money is left
        
        If you’re running over your
        budget, you’ll have to estimate
        a new EAC and base your
        TCPI on that.
      - A high TCPI means
        a tight budget
        
        When you’re looking at the TCPI for a project, a higher
        number means it’s time to take a stricter cost management
        approach. The higher the number, the more you’re going to
        have to rein in spending on your project and cut costs. When
        the number is lower than one, you know you’re well within
        your budget and you can relax a bit
    - - Throughout your project, you are looking at how
        you are spending versus the amount of reserve
        you’ve budgeted. You might find that you are using
        reserved money at a faster rate than you expected
        or that you need to reserve more as new risks are
        uncovered
    - - Reviews are meetings where the project team
        reviews performance data to examine the variance
        between actual performance and the baseline.
    - - Use the information you have about the project
        right now to predict how close it will come to
        its goals if it keeps going the way it has been.
  - - - CPI = EV/AC
  - - - You can tell that your project is on track because the two
        index numbers—CPI and SPI—are both very close to
        1, and the variance numbers—CV and SV—are very
        close to zero dollars. It’s very rare that you’ll get exactly
        to a CPI of 1 or a SV of $0, but a SPI of 1.02 means
        you’re very close to on time, and a CV of –$26 means
        you’re very close to on budget.
    - - If the CPI is much bigger than 1, it means you’re under
        budget. And you can tell how much under by looking at the
        CV—that’s what variance is for! It helps you see just how much
        the actual cost varies from the value you were supposed to earn
        by now.
    - - When you see a SPI that’s between 0 and 1, that tells you that the project
        is behind schedule…and that means you’re not delivering enough value
        to the sponsor! That’s when you check the SV to see how much less value
        you’re delivering. And the same goes for cost—a low CPI means that your
        project is over budget, and CV will tell you how much more value you
        promised to deliver to the sponsor
- - - - Determine Budget
  - - - Just like your scope and schedule baselines, a cost baseline
        is a snapshot of the planned budget. You compare your actual
        performance against the baseline so you always know how you are
        doing versus what you planned.
    - - It’s not enough to have an overall
        number that everyone can agree to. You
        need to plan out how and when you will
        spend it, and document those plans in
        the project funding requirements.
  - - - This tool is called cost aggregation. You
        take your activity estimates and roll them
        up into control accounts on your work
        breakdown structure. That makes it easy
        for you to know what each work package
        in your project is going to cost.
    - - When you evaluate the risks to your
        project, you will set aside some cash
        reserves to deal with any issues that
        might come your way. This tool is called
        reserve analysis.
    - - This tool is funding limit
        reconciliation. Since most people work
        in companies that aren’t willing to throw
        unlimited money at a project, you need
        to be sure that you can do the project
        within the amount that your company is
        willing to spend.
- - - - This is the cost estimate for all of the activities in your activity list
    - - Just like the WBS has a WBS dictionary, and the activity list has
        activity attributes, the cost estimate has a supporting detail called the
        basis of estimates. Here is where you list out all of the rates and
        reasoning you have used to come to the numbers you are presenting
        in your estimates.
    - - Along the way, you might find that you need to change the way you
        measure and manage cost. These updates allow you to make changes
        to the Project Management plan to deal with those improvements.
- - - - EAC predicts how much money
        you’ll spend, if you subtract the
        AC, you’ll find out how much money
        the rest of the project will end up
        costing.
    - - If you end up spending more than
        your budget, the VAC will be
        negative…just like CV and SV!
- - - - Organizational
        process assets
      - Project Management plan
      - Enterprise
        environmental factors
      - Project charter
    - - Expert judgment
      - Meetings
      - Analytical
        techniques
    - - Cost Management plan
        
        You’ll use this document to specify the accuracy of your
        cost estimates, the rules you’ll use to determine whether or not your cost processes
        are working, and the way you’ll track your budget as the project progresses. When
        you’ve planned out your Cost Management processes, you should be able to
        estimate how much your project will cost using a format consistent with all the rest
        of your company’s projects. You should also be able to tell your management how
        you’ll know if your project starts costing more than you estimated.