Controlling costs in a project is a dynamic process that requires constant monitoring, evaluation, and adjustment. The inputs to this process provide the necessary data and context to make informed decisions about cost management. Here’s a breakdown of the key inputs:
- Cost Performance Baseline:
- This is the benchmark against which actual costs are measured. It represents the approved budget over time and is typically depicted as an S-curve.
- It clearly shows how funds should be spent throughout the project lifecycle.
- Project Management Plan:
- Contains the cost management plan which outlines how costs will be planned, structured, and controlled.
- It provides guidelines on how variances will be managed, how performance will be measured, and how changes will be handled.
- Actual Expenditure:
- Represents the real costs incurred at different stages of the project.
- Variances can be identified and addressed by comparing actual expenditure with the cost performance baseline.
- Funding Requirements:
- Indicates when and how much funding is needed throughout the project.
- Ensures that there’s adequate cash flow to meet project needs and that there’s alignment with the organization’s financial plans.
- Work Performance Information:
- Provides data on the actual progress of the project.
- Includes information on which deliverables have been started, their progress, and which ones have been completed.
- Helps in assessing if the project is on track in terms of schedule and budget.
- Organizational Process Assets:
- These are the organization’s tools, processes, and guidelines for managing costs.
- They provide a framework for cost control and can include everything from cost control policies and procedures to monitoring and reporting tools.
By analyzing these inputs, project managers can comprehensively view the project’s financial health. They can identify where costs deviate from the plan, understand the reasons for these deviations, and take corrective actions to ensure the project remains on budget. Moreover, these inputs also provide the foundation for other cost management activities like earned value analysis, which provides a more in-depth view of project performance against the budget.
