Cost Management Plan

''A Project Cost Management Plan must be written to clearly define how the costs associated with a Project will be managed, that is measured, monitored and controlled and reported on. The following provides an example:''

The Project Manager, Mr. Sooknanan will be responsible for managing and reporting on the project’s cost throughout the duration of the project. During the monthly project status meeting, the Mr. Sooknanan will meet with management to present and review the project’s cost performance for the preceding month. Performance will be measured using earned value. Mr. Sooknanan will also be responsible for accounting for cost deviations and presenting the Project Sponsor, < > with options for getting the project back on budget. The Project Sponsor, < > has the authority to make changes to the project to bring it back within budget.

The costs for this APS implementation project will be managed all the way down to the work package level of the Work Breakdown Structure (WBS). Mr. Sooknanan will actively do this through the use of Microsoft Project, the Project Management Information System being employed for the purposes of our project. Control Accounts (CA) will be created at this level to track costs. Earned Value calculations for the CA’s will measure and manage the financial performance of the project. Credit for work will be assigned at the work package level. Work started on work packages will grant that work package with 50% credit; whereas, the remaining 50% is credited upon completion of all work defined in that work package. Costs will be rounded to the nearest dollar and work hours to the nearest whole hour.

Cost variances of +/- 0.1 in the cost and schedule performance indexes will change the status of the cost to cautionary; as such, those values will be changed to amber in the project status reports. Cost variances of +/- 0.2 in the cost and schedule performance indexes will change the status of the cost to an alert stage; as such, those values will be changed to red in the project status reports. This will require corrective action from Mr. Sooknanan in order to bring the cost and in some cases the schedule performance indexes back to below the alert level. Corrective actions will require a project change request and be must approved by the Project Sponsor before it can become within the scope of the project, as outlined in the above Project Change Control Section of this Management Plan.