Project Cost Management

What is Project Cost Management

This is one of the key factors that need to be focused thoroughly while managing a project. Being an important node of the iron triangle, cost management has become a critical knowledge area that every project management team needs to be cautious with. Project Cost Management is about managing the the cost of the project so that it can be managed and completed within the given budget. Within this cost management context, activities such as planning, estimating, funding, controlling, etc… are included. (PMBOK 5th edition)

When it comes to project cost management, it’s primal concern is about managing the cost of the resources required to complete the project. The ability to influence the cost of a project is highest at the early stage of the project since the initial scope of the projects are always critical.

Project Cost Management has been defined under 4 major processes. They are;

Plan Cost Management

Through this process, it produces the cost management plan which establishes the policies and procedures to handle, expend, manage and control the cost of a given project. Throughout the project life cycle, the cost management plan directs the project management team on how to control and manage the dedicated budget of the project. In addition, this acts as a subsidiary plan of the project management plan.

Estimate Cost

Estimate Cost process includes the activities to develop an approximation of monetary resources required to complete the project. It gives an idea about how much it will cost to complete the defined project activities. Most of the time, this process is a prediction based on the known information at a certain time. When estimating the cost, risks that will have an impact towards the total budget will need to be considered as well. The accuracy of the project cost becomes higher with the progression of the project via the project life cycle. At the early stages, the cost estimation will range with a rough order of magnitude (ROM) between -25% – +75%, but with the project progresses, this range will come to a range of -5% – +10% accuracy. This range will include all the cost including labor, materials, equipment, services, facilities and other costs such as allowances, contingencies and overhead costs.

Determine Budget

By determining the budget, the cost baseline is prepared. This is achieved by consolidating the estimated cost at each individual activities or work packages. The determined budget can be used to measure the performance of the project and can be monitored and controlled against the determined cost baseline. This is considered the approved version of the time-phased project budget excluding the management reserves.

Control Cost

Control cost is about monitoring and tracking the status of the project to update the cost of the project and managing the changes to the cost baseline. By a careful cost control tracking mechanism, the project management team can review any variances or deviations to the original plan and take corrective actions to bring the project back to the original planned line.

Below table shows under which Project Management Process Group the above processes are performed.

Initiating Planning Executing Monitoring and
No Process  Performed 1. Plan Cost Management
2. Estimate Cost
3. Determine Budget
No Process  Performed Control Cost No Process  Performed

**Please note that each and every individual process mentioned above will be explained further separately.

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Project Communication Management

What is Project Communication Management

This is considered one of the top most important knowledge area in project management. Project Communication Management is very important since the success or failure of the end result of the project mostly depends on how effectively project information are communicated. (PMBOK, 5th Edition)

Project Communication Management includes the processes necessary to make sure to drive the project towards success and the ultimate disposition of project information. Among these processes, planning, creation, distribution, storage, control, monitoring, etc… need to be taken care of. When it comes to communication, most of the project managers spend most of the time communicating with stakeholders including the team, client and top management. An effective communication is important to bridge the gap between diverse stakeholders relying on different cultural and organizational backgrounds.

Communication can happen through different dimensions and this depends on the parties involved in a particular communication.

  1. Internal (among the project team) and External (customer, supplier / vendor, etc…)
  2. Formal (reports, documents, meeting minutes, etc..) and informal (emails, reminders, memos, etc…)
  3. Vertical (throughout the organizational structure from top to bottom) and horizontal (among peers)
  4. Official (via newsletters, annual reports, etc…) and unofficial (off the record communications)
  5. Written, oral and verbal (through voice) and nonverbal (via body language)

There are 3 main processes identified under Project Communication Management. They are;

Plan Communication Management

This is the process of developing the proper method of project communications based on stakeholders’ information needs and requirements. This is also a subsidiary plan of Project Management plan and it supports the project team to identify and document approach to effectively and efficiently communicate with each other.

Manage Communication

Under this process, activities such as info: creating, collecting, distributing, storing, retrieving, etc… take place. All these processes occur according to the communication management plan. This process involves in directing an effective communication flow between project stakeholders.

Control Communication

This process includes the activities of monitoring and controlling communications throughout the entire project life cycle. In addition, it also has to make sure that the relevant information needs of the stakeholders are met accordingly. By doing so, it confirms an optimal information flow among all the project stakeholders at any given time.

Below table shows under which Project Management Process Group the above processes are performed.

Initiating Planning Executing Monitoring and
No Process  Performed Plan Communication Management Manage Communication Control Communication No Process  Performed

**Please note that each and every individual process mentioned above will be explained further separately.

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Project Quality Management

What is Project Quality Management

Project Quality Management is considered as the main knowledge area that the project management team needs to look into while building the project. It includes the processes that define quality policies, objectives and responsibilities, hence the project will satisfy the needs and requirements for which it was undertaken. (PMBOK 5th edition) Project Quality Management always works aligned with the organization’s quality management system. The ultimate objective of this knowledge area is to make sure that the project and product requirements are completed and validated accordingly.

There are 3 main processes mentioned under this knowledge area. They are;

Plan Quality Management

It is the process of identifying quality requirements and standards of the project deliverables and documenting them on how the project will be built according to the relevant quality requirements. This is a subsidiary plan of the project management plan. Its main benefit is that it guides the project team on how the project quality needs to be maintained throughout the project life cycle.

Perform Quality Assurance

This process is focused on project and it audits the quality requirements and the final results from the respective control measuring activities to make sure that suitable quality standards and definitions are used. In addition, it also supports the continuous improvement of quality process.

Control Quality

This process is focused on product and it involves in monitoring, reviewing and recording results of executing the quality maintaining related activities to track the performance and provide recommendations on necessary changes. There are few benefits identified under this process.

  • It identifies the reasons for weak processes, products with poor quality and provides necessary recommendations to overcome them.
  • It validates and verifies the product / project deliverables and leads the project management team to drive the project towards its final acceptance criteria defined by stakeholders.

Below table shows under which Project Management Process Group the above processes are performed.

Initiating Planning Executing Monitoring and
No Process  Performed Plan Quality Management Perform Quality Assurance Control Quality No Process  Performed

**Please note that each and every individual process mentioned above will be explained further separately.

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Project Scope Management

What is Project Scope Management

Project Scope Management includes the activities necessary to make sure that any particular project contains all and only required work to complete the project by achieving its objectives. This is a major knowledge area which is thoroughly followed, tracked and reviewed by the project team continuously since scope is considered one of the critical factors that the success of failure of a project relies on.

There are 6 major processes identified by PMBOK 5th Edition under project scope management knowledge area. They are as follows;

Plan Scope Management

This is the process of developing a plan on how the project activities / work / scope will be defined, validated, controlled and managed. Throughout the entire project, this plan guides the project management team on how to manage the scope of the project. This is a subsidiary plan of the Project Integration Management plan.

Collect Requirements

This process includes the activities to define, determine, manage and document the stakeholders’ needs and requirements to achieve the project objectives. This process segment consists of both the project scope as well as the product scope.

Define Scope

This includes the activities to develop a detailed description of the project and product. It’s important to execute this process carefully since it involves in declining the project boundaries of the project by defining which of the collected requirements will be included and excluded from the agreed project scope.

Create Work Breakdown Structure

This is another important activity defined under project scope management knowledge area. It subdivides the project work and deliverables into smaller, manageable components. The main objective of this process it to provide a more clear, structured vision of what needs to be done and delivered. This is also recognized as a ‘Team Building’ activity and it requires every team member to participate and define the work.

Validate Scope

Validate Scope functions on formalizing the process of accepting the completed project deliverables. It supports the project team to increase the probability of accepting the final product, service or the result by validating each deliverable.

Control Scope

This is the final process stated under project scope management. It monitors the status of the project and product scope handle the changes to the scope baseline. Controlling the project scope ensures that every change request and recommended corrective or preventive action to be undergone via the ‘Perform Integrated Change Control’ process. This is a mandatory process since changes to the project are inevitable and unavoidable, hence there should be some kind of a controlling mechanism to maintain the project scope without unnecessary deviations.

Below table shows under which Project Management Process Group the above processes are performed.

Initiating Planning Executing Monitoring and Controlling Closing
No Process  Performed 1. Plan Scope Management
2. Collect Requirements
3. Define Scope
4. Create WBS
No Process  Performed 1. Validate Scope
2. Control Scope
No Process  Performed

**Please note that each and every individual process mentioned above will be explained further separately.



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Project Integration Management

What is Project Integration Management

According to PMBOK (5th Edition), there are 10 knowledge areas that support the Project Management team to lead a project towards the success. Project Integration Management is the first knowledge area that should be possessed by the Project Management team to handle a project.

This knowledge area includes the processes, activities, tools and techniques required to successfully manage the Project Integration function. According to the project management context, integration includes characteristics and features of unification, consolidation, communication and integrative actions that are essential to control project execution through completion and meeting project requirements while satisfying stakeholders. (Source: PMBOK – 5th Edition)

There are 5 major functions identified by PMBOK to be looked into within the Project Integration Management knowledge area. They are;

Develop Project Charter

This is the process of developing a document that formally allows / authorizes the existence of a project and provides the project manager to apply organizational resources to project activities.

Develop Project Management Plan

This is the consolidation of all the subsidiary plans such as schedule, cost, scope, quality, etc… and integrating them into a complete and comprehensive project management plan. Apart from the main subsidiary plans, the main baseline plans also will be included.

Direct and Manage Project work

This is the main process of performing the activities stated under the project management plan and build the approved changes to achieve project objectives.

Monitor and Control Project work

It is the process of measuring the project progress and performance objectives as per the project management plan. It continuously tracks and reviews the project status and supports the project management team to bring the project to its expected status if there are any deviations. (Corrective actions, preventive actions and defect repair)

Perform Integrated Change Control

This is a critical process that involves in reviewing all change requests and sending them through an approval / rejection process. It also is related to managing changes to the deliverables,  organizational process assets, project documents and project management as well.

Close Project or Phase

This is the final process of the Project Integration Management knowledge area. It involves in finalizing all the project activities and formally completing the project or phase.

Below table shows under which Project Management Process Group the above processes are performed.

Initiating Planning Executing Monitoring and Controlling Closing
Develop Project
Develop Project
Management Plan
Direct and Manage
Project Work
1. Monitor and Control Project Work
2. Perform Integrated Change Control
Close Project / Phase


**Please note that each and every individual process mentioned above will be explained further separately.

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Project Management Processes

Project Management Processes

The Project Management Processes make sure of an efficient and steady flow of the project throughout its entire life cycle. The defined processes include tools and techniques needed to apply the skills and abilities under the 10 knowledge areas (The process groups will be discussed further under the knowledge areas). There are 5 basic project management processes (Process Groups) defined by PMBOK (5th Edition)

  1. Initiating Process Group
  2. Planning Process Group
  3. Executing Process Group
  4. Monitoring and Controlling Process Group
  5. Closing Process Group


Process Group Map
Process Group Map

Initiating Process Group

This process group contains the processes stated to define a new project or a new phase of an existing project by receiving the authority to initiate the project. Under this process group, the initial scope of the project is defined. Initial internal and external stakeholders are identified. The project manager will be selected to handle the project. In order to handover the authority of the project to the selected project manager, the project charter will be prepared.

Planning Process Group

This process group consists of the processes required to find out the total scope of the effort to complete the project (Scope, Schedule, Cost) and develop the relevant actions necessary to achieve the project objectives. The planning process group will develop the project management plan that includes all the required documents to carry out the project. While the project is being carried out, this plan will be changed accordingly. This process is known as ‘Progressing Elaboration’ stating that the planning and documentations are iterative and ongoing tasks. Under the project management plan, all the 10 knowledge areas will be covered.

Executing Process Group

The executing process group includes the activities that need to be carried out to complete the work defined in the project management plan to achieve the project objectives. The most of the project budget and schedule will need to be spent under this process group. Apart from the main tasks, the change requests to baseline the project towards its objectives (corrective actions, preventive actions and defect repairs) will also require to be looked into.

Monitoring and Controlling Process Group

This process group is considered one of the most important process groups in Project Management. It includes the processes to track the progress and performance of the project. In addition, it also supports the project management team to identify any variances between the planned and actual and re-baseline the project plan to bring the project towards the expected level. The continuous monitoring of the project always helps to keep the project under a healthy status while producing a error-free final product.

Closing Process Group

This is the final process of a project which contains the activities to conclude and formally close the project, phase or the contractual obligations. This also includes establishing the premature closure of the project. (Cancelled / aborted projects, projects with critical conditions) At the time of closing the project, a formal acceptance from the customer is required. And the lessons learned throughout the project life-cycle need to be documented for future use. All the agreements need to be signed off and formally closed. Assess the team members’ performances and release the project resources accordingly.

Below figure explains how the process groups interact in a project / phase.

Process Group Interaction (Source: PMBOK 5th Edition)
Process Group Interaction (Source: PMBOK 5th Edition)
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Agile Manifesto Principles

Agile Manifesto Principles

Apart from the values stated under Agile manifesto, there are 12 principles identified to be explained under the same agile manifesto concept. Those 12 Agile Manifesto Principles are as follows;

Our highest priority is to satisfy the customer through early and continuous delivery of valuable software

This principle explains that the project team’s primary focus should be to satisfy the customer as early as possible by producing a valuable product using continuous delivery. (Not documents or project plans)

Welcome changing requirements even late in development. Agile processes harness change for the customer’s competitive advantage

It’s understood that the customer’s market is dynamic, hence requirements change is always dynamic based on the competition. There cannot be any integrated change control system to be followed under agile methodologies.

Deliver working software frequently from a couple of weeks to a couple of months, with a preference to other shorter timescale

It’s recommended to receive an early feedback without continuously working on the project and ultimately producing a wrong product. The project team has to make changes where necessary.

Business people and developers must work together daily throughout the project

Both the customer and the team must share the same vision and goal. Both parties need to have face to face conversations more frequently. The product owner must work closely with the project team and advise them accordingly. Both parties can negotiate on requirements and produce frequent demos of the product.

Build projects around motivated individuals. Give them the environment and support they need and trust them to get the job done

It’s always advised not to tell the team how to build the product, but what to build. The team should be empowered, recognized and delegated. The team has to facilitate team work and collaboration. “Knowledge worker” cannot be micro managed.

The most efficient and effective method of conveying information to and within a development team is face-to-face conversation

The ‘face-to-face’ method has been identified as the best communication method so far. Written documents are slow and maybe producing wrong info: / details on the project.

Working software is the primary focus of progress

The team should add value to the customer. Therefore, it can be achieved only by producing a working product / software. The team has to switch from plan driven to value driven. Other activities such as planning and documentation can be considered supporting activities.

Agile processes promote sustainable development. The sponsors, developers and users should be able to maintain a constant pace indefinitely

The team is advised to follow a good work life balance, no long hours working. Short iterations can be repeated to produce the final product. Effort needs to be distributed more consistently.

Continuous attention to technical excellence and good design enhances agility

The team should focus and pay more attention towards balancing the high value and flexible design. Processes such as refactoring, automated testing, continuous integration can lead the project towards technical excellence.

Simplicity – The art of maximizing the amount of work not done is essential

It’s recommended to build what’s only necessary for today. Team should not build anything based on their own assumptions. Only the simplest thing that could possibly function according to the client’s requirement needs to be built.

The best architectures, requirement and designs emerge from self-organizing teams

Team must be cross functional, self organized and self managed. Team has to decide how to do and who should do what. Everyone has to have a sense of ownership of the product and should increase the commitment towards work.

At regular intervals, the team reflects on how to become more effective, then tunes and adjust its behavior accordingly

Team should continuously improve their processes in order to be more efficient and effective. They need to have retrospective sessions to see what needs to be stopped, what needs to be started and what should be continued.

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Agile Manifesto Values

Agile Manifesto Values

The Agile Manifesto Values define how the values behind Agile framework function to lead projects towards their success. According to the defined manifesto, a group of 17 thought leaders including Alistair Cockburn, Kent Beck, Jon Kern have identified 4 values . The ‘Values of Agile Manifesto’ is stated as follows:

“We are uncovering better ways of developing products by doing it and helping others do it. Through this work we have come to value;”

Agile Manifesto - Values
Agile Manifesto – Values

Individual and Interactions over Processes and Tools

People are considered the most important factor. Team is driven to focus on individual and interactions. This value promotes the self management and shared ownership of the project.

Working Products over Comprehensive Documentation

This value focus on delivering a working product / software. Documentation is necessary, but without a working product, documentation won’t do any good. Team should not let the documentation process to distract themselves from producing a working product.

Customer Collaboration over Contract Negotiations

It’s normal that the business requirements change from time to time, hence putting everything under a contract at the beginning itself will not be practical. Both parties (Team and the Customer) must be flexible when it comes to embracing change to the product. Team should work closely with the customer to achieve a shared vision and goal. Therefore, both parties need to build trust among themselves and proceed with flexible contracts.

Responding to Change over Following a Plan

Requirements change frequently based on the client’s needs. Therefore, coming up with a concrete plan from the start of the project will not be effective. It’s recommended to initiate the project with a high level plan. Next, with more info: and knowledge related to the product being gained from time to time, improve the feature list to-do and execute the project based on the priority. In order to succeed with this, every team member is advised to participate in planning the product list.

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Agile Project Management

What is Agile Project Management

The term ‘agile’ comes from the phrase ‘Agility’ which defines the ‘ability to quickly adjust and respond to changing business needs’. Managing projects using the agile methodologies is knows as the Agile Project Management. Agile is a mix of both iterative as well as incremental development.

Agile = Iterative + Incremental


The project life cycle is composed of several iterations in order. Each iteration is considered a mini project and after several iterations, a release happens which builds a stable, tested, partially completed system


System grows partially in each iteration adding new features to the project, hence the system is built incrementally.

In order to follow basic approach of agile, there are 4 general steps to follow.

  1. Make a list of features (Product Backlog) that need to be included
  2. Prioritize the list according to the value and the size of the feature
  3. Build the features from top to bottom until the fixed time is run out
  4. Repeat the process until the entire list is completed

Sometimes certain organizations feel that adapting to 100% agile project management is risky, hence they come up with a hybrid model that combines a part of waterfall methodology as well. This is a smart move since it doesn’t over-compromise both methodologies.

Agile Hybrid Model
Agile Hybrid Model

Agile projects are executed in several stages which include sprints  and releases. (Refer below image for further details)

Agile Project Stages
Agile Project Stages

Agile Paradigm Shift

Agile methods are ready to welcome / embrace changes to the project (unlike waterfall methodology). Hence, instead of making the ‘Requirements’ a constraint, it works with fixed cost and time and allows the team to build as much as possible during the period of fixed time. And with few iterations and releases, the entire project is built.

Waterfall Methodology Agile Methodology
Requirement is a constraint Schedule and Cost are constraints
Cost and Schedule vary Requirements can vary
Plan Driven Value Driven
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Organizational Structure on Project Management

Organizational Structure influencing on Project Management

Organizational Structure is a key element that can have a straight / direct impact towards the success of projects. The structure differs from organization to organization and based on the structure, the project management methodology also differs. PMI has identified the organizational structure as an enterprise environment factor that can affect on how the projects need to be conducted. Therefore, according to different organizations, few structures have been identified and categorized under three structural level. They are;

  • Functional
  • Matrix (Weak, Balanced and Strong)
  • Projectized

Functional Organization

These organizations function under different functional level leads such as marketing, finance, human resource, operations, etc… Each department will work on their project tasks independently from other units / departments.

Functional Organization

Matrix Organization

These organizational structures reflect a combination of both functional and projectized environments. It has been classified under three different level which are weak, balanced and strong matrix structures based on the authority, power and influence level between the functional and project managers.

Weak Matrix Organization

This structure follows most of the characteristics of a functional structure. Also the level of a project manager is at a coordinator / expediter level which is very low and cannot make decisions.

weak matrix
Weak Matrix Organization

Balanced Matrix Organization

This structure recognizes the need of a project manager, yet it doesn’t provide the full authority to the respective project manager.

balanced matrix
Balanced Matrix Organization

Strong Matrix Organization

This structure has most of the projectized environmental features and have full-time project managers with more authority level.

strong matrix
Strong Matrix Organization

Projectized Organization

This acts as the complete opposite of the functional structure where the organization functions under project managers who have a great deal of authority and most of the resources are involved in projects’ activities.

Projectized Organization

Refer below comparison among the identified structures which are compared under three factors namely;

  1. The role of the Project Manager
  2. The authority level of the Project Manager
  3. Resources Availability


Comparison – Organizational Structure
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