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7 - PROJECT COST MANAGEMENT

The financial benefit of conducting a software project can be continuously evaluated during evolution of the
product. Each adjustment to product scope and implementation details can be based on predicting the prospective
value of the product. Delivery into the operational environment of a planned product increment can provide financial
return and other benefits during software development. Scope management for software projects is addressed in
Section 5 of this Software Extension.

Figure 7-1 provides an overview of Project Cost Management for software projects; it is an adaptation of
Figure 7-1 in the PMBOK Guide.
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7.1 Plan Cost Management
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As stated in the PMBOK Guide, Plan Cost Management is a process that establishes the policies, procedures,
and documentation for planning, managing, executing, and controlling project costs. This includes identifying
incremental funding models and establishing change control to manage variations from the cost control plan. The
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inputs, tools and techniques, and outputs for planning cost management in Section 7.1 of the PMBOK Guide are
applicable to planning cost management for software projects, with the indicated additions and extensions.

7.1.1 Plan Cost Management: Inputs

The inputs in Section 7.1.1 of the PMBOK Guide are applicable for planning cost management for software
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projects, with the modification of 7.1.1.4.

7.1.1.1 Project Management Plan

See Section 7.1.1.1 of the PMBOK Guide.
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7.1.1.2 Project Charter

See Section 7.1.1.2 of the PMBOK Guide.
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7.1.1.3 Enterprise Environmental Factors

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See Section 7.1.1.3 of the PMBOK Guide.

7.1.1.4 Organizational Process Assets

In addition to those assets described in 7.1.1.4 of the PMBOK Guide, organizational process assets for software
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project cost management include direct-cost drivers, governance policies, and the product portfolio, when they exist.
• Cost Drivers. Size and complexity of software are highly correlated with the effort for software projects
and drive software cost; large and/or complex products require more effort. Other cost drivers include skills
and abilities of software developers; maintaining relationships with customers and other stakeholders;
infrastructure technology; development tools and environments; and costs of other organizational entities

©2013 Project Management Institute. Software Extension to the PMBOK Guide Fifth Edition 121
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