This is the fourth article in the series “How to remember ITTOs”. You can find all the articles in this series here: How to remember ITTOs series
ITTO is an acronym that stands for Inputs, Tools and Techniques, and Outputs.
In this article, we will focus on Project cost management.
What is Project Cost Management?
Project cost management is the knowledge area in which the team performs the following major activities:
- Estimates the cost of individual activities taking into account the resource requirements, cost of quality, cost of risk activities, etc.
- Aggregates the individual cost estimates to develop the cost baseline and project funding requirements
- Monitors the cost performance of the project, provides cost forecasts and controls any changes to the cost baseline
Process Flow of Project Cost Management
I have suggested process flow diagrams as a way to remember and map the concepts in the previous articles. Following the same approach, I have given the process flow diagram for Project Cost Management below.
I have included ONLY the major inputs and outputs, so that it is easier to understand rather than complicating it too much. It does NOT include ALL inputs and outputs. I have included only those inputs and outputs, which I felt are significant. Please refer to PMBOK Guide for a complete list of ITTOs.
The best way to remember the ITTOs is to draw the process flow diagram yourself. It would help your mind to map the inputs and outputs to the processes; and would help to remember the process flow for a very long time.
Tips to remember ITTOs in Project Cost Management
- Organizational Process Assets is an input to all the processes in Project cost management. (Note: Please note that OPA is an input to 47 processes; only two processes do not take OPA as an input. They are 5.5 Validate Scope and 11.7 Monitor Risks).
- Expert judgment Is a tool and technique of all the processes in Project cost management.
- Data analysis Is a tool and technique of all the processes in Project cost management.
- Enterprise Environmental Factors is an input to all the 3 planning processes of Project cost management.
- Once cost management plan is developed in 7.1 Plan Cost Management, it becomes an input to all the following 3 processes in Project cost management.
- Work performance data is an input to Control Costs process; and work performance information is the relevant output from this process.
- Change requests is an output of 7.4 Control Costs (Note: For all Monitoring & Controlling processes, change requests is an output; the only exception is Perform Integrated Change Control. In this process, change requests is an input and Approved change requests is an output).
- The output of 7.2 Estimate Costs include cost estimates and basis of estimates. You will see similar outputs in few other processes. For example, the output of 6.4 Estimate Activity Durations include duration estimates and basis of estimates; the output of 9.2 Estimate Activity Resources include resource requirements and basis of estimates.
- Control Costs process generates cost forecasts. Similarly, Control Schedule generates schedule forecasts.
- Estimate Costs process employs the following tools and techniques: Analogous estimating, Parametric estimating, Bottom-up estimating and Three-point estimating. Similarly, 6.4 Estimate Activity Durations process also employs all these four tools and techniques: Analogous estimating, Parametric estimating, Bottom-up estimating and Three-point estimating. The process 9.2 Estimate Activity Resources uses three of these tools and techniques: Analogous estimating, Parametric estimating, and Bottom-up estimating.
- There are several inputs to Estimate Costs process. You can remember them this way:
- Quality management plan: This is needed as Cost of Quality is an important cost that needs to be estimated
- Project schedule: This is needed to know how long each activity takes. Time is money; the longer the activity duration, the more it is going to cost
- Resources requirements: You need to know how much resources are required to estimate the costs
- Lessons learned register: Useful in estimating techniques like analogous estimating and parametric estimating
- Risk register: Contingency reserve is an important component of cost estimates.
Conclusion
What is your approach to remember ITTOs in Project Cost Management? Do you think the above approach is good? Do you have any other tips you want me to include in the above list?
Share your opinions and comments in the comments box below. I will continue to work on the process flow diagram for the other knowledge areas.
Certified Risk Management Professional (PMI-RMP)®
An enthusiastic project management practitioner and trainer.
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Rathish says
Simple and very useful..Thanks..Hope you will cover all knowledge areas
Manickavel Arumugam says
Thanks Rathish. I will try to update the other knowledge areas at the earliest.
Swetha says
Very Useful. Thanks a lot.
Manickavel Arumugam says
Thanks Swetha.