| There are four key concepts in project cost management. The 'PMI says' box defines these. Note the subtle difference between cost estimating and cost budgeting. Estimating operates at the level of activities, and cost budgeting takes the estimated costs of activities and aggregates them to the project level in the form of a cost baseline. |  | 'Cost Estimating (Process). The process of developing an approximation of the cost of the resources needed to complete project activities.' PMBOK Guide (p.356) 'Cost Budgeting (Process). The process of aggregating the estimated costs of individual activities or work packages to establish a cost baseline.' PMBOK Guide (p.356) 'Baseline. The approved time phased plan (for a project, a work breakdown structure component, a work package, or a schedule activity), plus or minus approved project scope, cost, schedule, and technical changes. Generally refers to the current baseline, but may refer to the original or some other baseline. Usually used with a modifier (e.g. cost baseline, schedule baseline, performance measurement baseline, technical baseline).' PMBOK Guide (p.352) 'Cost Control (Process). The process of influencing the factors that create variances, and controlling changes to the project budget.' PMBOK Guide (p.356) | |
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