Cost management plan example for software project

Under what special circumstances will estimates be revised? How?.

Is there a point at which the estimates will be planned to be revisited and re-approved? If so, when?.What techniques will be used to produce the estimates?.Who will approve the final project cost?.Where will the estimates come from, for example, published commercial information?.Who is responsible for reviewing and/or approving estimates?.In this technique, you determine an optimistic and a pessimistic estimate, and average them:ДЄlternatively, if you wish to produce an estimate that is tighter to the Most Likely (m) value, you can use the beta distribution:ДЇor the estimating phase, the project cost management plan should contain the following items: In addition, to avoid estimating errors the estimator can use Three Point Estimating techniques Three Point Estimating Often, these variables are published in commercial sources or well known to the organization. Parametric estimating involves reverting to unit costs, such as cost per square foot of house construction. The actual cost of the previous project is revised and adjusted to account for the different variables present at the new project. Analogous EstimatingДЄnalogous estimating involves comparing to previous, similar projects. The hours, tools, equipment costs, and subcontractors are estimated to produce a final task estimate for each task.Д®ach estimate is produced using either analogous or parametric estimating techniques. The WBS is simply a subdivision of the project into tasks.Д®ach item in the Work Breakdown Structure is estimated. Prior to the estimate stage, the project has been divided into work packages in a Work Breakdown Structure (WBS). In order to be approved by the applicable authorities, the amount that the project will cost is usually a major variable. Project EstimatingДЄlmost all projects need estimates. Keep in mind stakeholders tend to measure project costs in different ways, for example when an item is delivered vs. Project stakeholders should be consulted to ensure a complete buy-in prior to project execution. Funding requirements often require this type of analysis to determine when the funds will be released. The Cost Management Plan should take into account the time value of money, Return on Investment, Net Present Value, and payback period, if applicable.

The Cost Management Plan is important because the project managerвЂ™s ability to influence project costs starts high and decreases as the project goes on. It provides the details of how the project costs will be estimated, tracked, and controlled. The Project Cost Management Plan is a component of the overall Project Management Plan. The key benefit of this process is that it provides guidance and direction on how the project costs will be managed throughout the project Cost Management Plan

Plan Cost Management is the process of defining how the project costs will be estimated, budgeted, managed, monitored, and controlled.

Cost management plan example for software project