What's New in Project Cost Management (pt 4)

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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.

What’s new in Project Cost Management: Determine Budget Process – read the third part of this series here.

In the last article I looked at what was different about the Determine Budget process in the new PMBOK Guide®-- Sixth Edition. In general, what I’m feeling about the whole knowledge area is that Project Cost Management has been simplified and streamlined, rather than given a total overhaul.  Today, I want to look at what’s different in the next process: Control Costs.

Control Costs Process

The fourth process in this knowledge area is Control Costs, and it has been given a spruce up to bring it in line with other processes. However, while it might look different in places, I’m yet to uncover anything radical about how you should approach managing costs on your project.

We have moved into the monitoring and controlling process group.

Inputs

There were 4 inputs and now there are 5.

The new one is project documents. The lessons learned register specifically gets a mention. I think this reflects an overall understanding in the PMBOK Guide® -- Sixth Edition, that actually we do need to continue to look at what’s working and what’s not throughout the life of the project, not just at the end. I wrote a whole book about this topic, so I’m delighted that it’s finally making it into the mainstream. And, of course, it’s a lot more agile in thinking, than the old way of managing project lesson learned meetings.

Tools and Techniques

The number one T&T from the previous edition was Earned Value Management: now it is Expert Judgment.

I doubt many people will be losing sleep over that!

However, Earned Value is still in there, under the heading of data analysis. Other data analysis techniques that get a mention include:

  • Variance analysis (this is schedule variance, cost variance and performance indices)
  • Trend analysis (this is your EVM charts and the forecasting you do to show estimate at completion)
  • Reserve analysis.

There does seem to be an overlap with expert judgment here, because the expert judgment examples also include earned value analysis, forecasting and variance analysis. You do need to apply expert judgment to use these techniques, so perhaps that’s why. It reads as a duplication though which I think is confusing.

The project management information system gets a mention as a new T&T, only because project management software has dropped off. PMIS is a more inclusive term, I think, and it makes more sense to use this throughout as it can refer to lots of different types of systems that you can use in your day to day work. PM Software just makes me think of scheduling tools.

Outputs

Organisational process asset updates have dropped off the outputs. There aren’t any new ones so it means that at the end of this process you end up with:

  • Work performance information
  • Cost forecasts (because you are amending these as you go as you control the costs)
  • Change requests (again, as a result of tweaking, monitoring and controlling the costs)
  • Project management plan updates
  • And you update documents (can you see a trend here?)

That’s the last of Project Cost Management process. Overall, I think that the updates have been kind to this knowledge area. The changes have made it a lot easier to adapt the process to your environment because instead of mandating particular inputs or tools, you have the flexibility to use what you need now.

In real life, you’ve always had the ability to use what you need, but the updated standard has given less confident project managers the ‘permission’ to flex their approach as required.

The downside of a more flexible, tailorable approach is that the project manager needs to apply more professional judgment to know what’s acceptable and what is going to work. That’s hard to do if you don’t have much experience. It will be interesting to see how the changes affect people day to day, if they do at all.

What do you think?

Posted on: February 08, 2018 08:00 AM | Permalink

Comments (6)

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Great insight on what's new in Cost management between fifth and sixth edition.Thank you so much Elizabeth for the very well done article.

Thanks for the comparison and sharing what's new in 6th Edition, Elizabeth.

Another good update to your series Elizabeth. Thanks.

Thanks for the sharing the differences between 5th and 6th versions of the PMBOK. I need to get me a copy real soon.

These series are amazing! Thank you Elizabeth for this amazing contribution to this community.

Thanks for comparison

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