What’s New in Project Cost Management (pt 3)

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Categories: budget, cost management


What’s new in Project Cost Management: Plan Cost Management Process – read the first part of this series here.

What’s new in Project Cost Management: Estimate Costs Process – read the second part of this series here.

In the last article I looked at what was different about the Estimate Costs process in the new PMBOK Guide®-- Sixth Edition. Overall, I’m finding that the process is more streamlined and easier to tailor because there is more scope to adapt – mainly because the inputs and tools and techniques feel more inclusive. Today, I want to look at what’s different in the next process: Determine Budget.

Determine Budget Process

The third process in this knowledge area is Determine Budget, and while it looks quite different, it’s really just a tidy up and alignment to what’s been happening elsewhere in the standard.

We are still in the planning process group.

Inputs

There were 9 inputs: 7 of them have been thrown out.

This sounds a lot more radical than it actually is. All that’s really happened is that the project management plan and project documents cover a chunk of the paperwork that included files specifically called out by name in the previous version, like the cost estimates created in the previous process.

That’s meant the inputs have dropped down to 6. There is one surprising one: Enterprise Environmental Factors. How was that not in there before? It’s one of those inputs that you get tired of hearing about because it crops up everywhere! Now it’s in this process as well, and exchange rates get a specific mention because of how they can influence your budget.

‘Business documents’ is the other new one worth a mention, and this refers to the business case and benefits management plan. I like how these are considered ‘business’ documents as in they are owned by the business and not the project team. However, the project team are going to have some input into them, I am sure.

Tools and Techniques

Tools and Techniques isn’t that different. Data analysis has been added in, as a catch-all term that includes reserve analysis, if your project is going to get a management reserve.

There’s another new one too: Financing. This is about getting the funding for your project. I’m not sure why this is a technique, when it feels quite process-y to me. It’s all about securing external funds if that’s appropriate for your project, so would include everything covered in the book about writing proposals that I read over the summer.

Read next: How to secure continued funding for your project

Outputs

Nothing has changed in the outputs. You still end up with the same at the end of this process:

  • A cost baseline
  • The project funding requirements
  • And you update documents (there’s a lot of that in project management!)

Next time I’ll look at what’s new in the Control Costs process. There are tweaks to this process (including to the outputs) but I hope you’ll agree that they are all sensible changes that do make the process easier to understand and follow.

Posted on: January 29, 2018 08:00 AM | Permalink

Comments (10)

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Thanks Elizabeth!

I can't think of a single PMBOK process where EEFs and OPAs couldn't be a potential input - I think these need to be referenced as a default input and only explicitly referenced when they are NOT applicable.

Kiron

Good article and thanks for sharing.

Thanks Elizabeth.

Thanks Elizabeth

Great article, Elizabeth!

I agree with Elizabeth that financing is a weird "technique". I suppose though, where else would you put it? An input?

Elaborate article to understand cost , budget articulation

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