The Project Management Plan – Cost Management


Depending on the organization you work for and the project you are working on, the Project Manager may or may not be managing the project budget and costs. If you are tasked to do this, include Cost Management as part of your Project Management Plan.

The Cost Management Plan addresses the following:

• Defines what resources (human, hardware, software, services, facilities) will be considered part of the project costs and when it will be base-lined

• Defines how costs will be reported and who will approve invoices and internal costs

• Defines the magnitude of cost changes that will be subject to formal change management

• Includes a plan for change management: How change is requested, authorized, and documented

• Reference the Project Charter for the priority of Cost in the triple constraints

If cost is the highest priority in your project triple constraints, Cost Management becomes a critical activity. You want to not only record and track costs that have already been incurred, but you also must do new cost projections on a regular basis. As more is known about a project, cost projections will become more accurate.

A former manager of mine once told me that if your costs incurred + future projected costs exactly equals your budget, then you are not doing accurate cost projections. This is based purely on the laws of probability. The probability of your actual and projected costs EXACTLY matching a budget created before the project began is very low.

The Project Management Plan – Schedule Management


Before I dive into Schedule Management I want to note the difference between the schedule and what many refer to as “the project plan”. You will often hear the Microsoft Project artifact referred to as “the project plan”. In reality, it is only the project schedule. The Project Plan is the combination of the Project Management Plan (being discussed in this series of posts),  the Project Activity Plan (or Work Breakdown), which will be discussed in future posts, and the Project Schedule. I encourage you to use this terminology correctly.

The Schedule Management Plan addresses the following:

• Indicates how the project schedule will be created (who will be the sources of start/end dates and effort), when it will be base lined and lists any scheduling constraints

• Describes the implementation approach (phased, iterative, pilot, etc)

• Defines what level of the schedule will be subject to change management (typically these are the high level milestones and major phase start/end; all other changes can be informally negotiated)

• Defines how schedule performance is monitored and reported (e.g., variance analysis)

• Defines the project schedule software to be used

• Includes a plan for change management: How a schedule change is requested, authorized, and documented

• Reference the Project Charter for the priority of Schedule in the triple constraints

Schedule Management is a critical part of project management and communication. In future posts I will show how to construct the schedule and monitor performance.

The Project Management Plan – Scope Management


The Project Management Plan defines how the project is executed, monitored, controlled and closed. The first component of the Project Management Plan is the Scope Management Plan.

The Scope Management Plan addresses the following:

• Defines how the Scope of Work will be created. This includes a roles/responsibilities matrix (who will create the scope, who will contribute to the scope, who will approve the scope)

• Defines what the Scope of Work will contain (Scope exclusions, process and physical scope, organizational scope, application scope, deliverables, Work Breakdown Structure aka WBS)

• Defines what constitutes the baseline Scope for change management purposes. This is not the actual Scope, it is the sources of Scope (e.g. “The deliverables as listed in section x of document z and the approved WBS”)

• Includes a plan for change management: How change is requested, authorized, and documented

• Describes the process for getting approval for completed deliverables

• Reference the Project Charter for the priority of Scope in the triple constraints

The Project Management Plan – Overview


There are two main types of high level planning for a project: (1) The Project Management Plan; (2) The Project Activity Plan (aka The Project Plan). The Project Management Plan describes the approach and processes for managing the project. The Project Activity Plan describes the work to be done to achieve the project objectives. This series of posts address the Project Management Plan.

The Project Management Plan defines how the project is executed, monitored, controlled and closed. It addresses the management of scope, schedule, cost, quality, staffing, communications, risk, and procurement. Whenever matters of project procedure are in question, this document shall be the first source consulted.

This is a dynamic document and reflects the current thinking regarding the project approach based on what is known at this time. It is expected to be updated with new information as the project unfolds. Original and revised versions should be distributed to the entire project team.

The components of the Project Management Plan are:

  • Scope Management
  • Schedule Management
  • Budget Management
  • Staff Management
  • Communications Management
  • Risk Management
  • Procurement Management
  • Project Close Definition
  • Post-Project Audit Plan

In subsequent posts I will elaborate on each of these sections.

For large projects I highly recommend creating a Project Management Plan and sharing it with your sponsor and key stakeholders. This plan describes the “rules of engagement” for the project and will minimize assumptions and misunderstandings regarding project process. I have also found this to be very helpful if you are new to an organization. It is a way to document your understanding of the project management practices of that organization.

There is a good reason the Project Management Institute (PMI) includes these plans in their best practices. Once I obtained my Project Management Professional (PMP) certification, I included a formal Project Management Plan on all of my large projects.

The Project Charter – Sign Off



The Project Charter can be looked at as a contract between you and your project sponsor or you and your manager. It documents your understanding of the expectations of the sponsor and what you are expected to deliver and when. Like any contract, it should be concluded with a signature indicating agreement.

Why get a real signature? It is amazing how people will pay close attention to what is in a document when they have to sign their name to it! I have seen cases on my own projects as well as those I consulted on where misunderstandings are cleared up prior to charter sign off. This has and will save many hours of effort avoiding taking a project down the wrong path. For these reasons I highly recommend getting a real signature and posting a PDF image of the Project Charter in the project repository.

Once you have a signed-off charter, you now have one of the deliverables subject to formal Change Management. Any request that would change any component of the charter should have a formal change benefit/impact statement signed off and the Project Charter should be changed to a new version and signed off again.

In my next post we will move to the Planning Phase and begin a multi-part discussion on the Project Management Plan.

The Project Charter – Constraints


Constraints are any limitations to solution options that have been imposed on a project. It is important to know these early on so time is not wasted pursuing these options. Here are some examples:

  • The solution must work with Microsoft Edge as that is the company standard
  • The solution must be an Oracle product for seamless integration with our other Enterprise systems
  • The new department we are adding as a result of this project must fit into this 30′ x 50′ area

When project constraints are uncovered, be sure to understand the reason why. It is possible some constraints could be removed. I was involved with a project where the service provider was already selected but without looking at the competition. I convinced my business partners to conduct formal “Request for Proposal’s” with the leading competition and the result was a different provider was selected.

Constraints are included in the Project Charter so that the Sponsor and Core Project Team understand and agree.

The Project Charter – Issues


Issues are any event or known problem that will negatively impact your project’s schedule, scope, budget or quality. Issues differ from Risks in that Issues are 100% will or has happened whereas Risks may or may not happen with a probability less than 100% and greater than 0%. Risks that are not actively managed are more likely to become Issues.

At Project Charter time, you want to highlight the most severe impacting issues. Look specifically for the impacts in the following areas:

  • Schedule – issues that will delay your project start, or impact key milestones and the target completion date.
  • Scope – Issues that can prevent you from delivering the defined project scope
  • Budget – Issues that can cause the project to go over the allowed budget
  • Quality – Issues that will affect the quality of the delivered solution

In a future post I will address Issue Management in detail.