Doubt on Project cost management plan

One of the inputs for Plan Risk management is cost management plan.In PMBOK page 277 this is shown
as an output of Project cost management. Contrary to that in page 165 the PMBOK says that the project cost
management plan is developed in the Develop PMP process. 


Why this confusion and which is correct?


Also the cost, scope and schedule managment plan are developed during the Develop Proj Mngmt Plan process.

 Hi  kiranu23,

 

You have asked a very interesting question. I would to address your confusion in parts, let me rephrase your concerns in few questions:

 

A. Why we don’t have dedicated processes for “Plan Scope”, “Plan Time”, “Plan Cost” that produce “Scope Management  Plan”, “Schedule Management Plan” and “Cost Management Plan” respectively?

 

B. Why the input “Cost Management Plan” to the Plan Risk Management process being shown as the output of “Plan Cost Management” rather than “Develop Project Management Plan”?

 

C. Why are project planning processes cyclic in nature, i.e., output of a process going to another process as an input and the output of this second process coming back as the input to the first process?

 

Answer to Question A:

================

We have 9 knowledge areas, and apart from “Integration Management” knowledge area, we have 8 knowledge areas that address 8 different project horizons. Which of these 8 knowledge areas are the most important ones? Clearly the answer is that all of these are important and none of them can be underestimated. But one will agree that the most important of these 8 are “Scope Management”, “Time Management” and “Cost Management”, i.e. the knowledge areas addressing the triple-constraints are of the prime importance since they lay the foundation for the other knowledge areas. Since the scope management plan, schedule management plan and cost management plan affects all the knowledge areas and not a single knowledge area alone, we don’t have dedicated processes to develop these plans in their respective knowledge areas. Please note that this is due to the importance of the plans and not due to any other reason. Please note that all of the 8 knowledge areas address the project constraints, and all have dedicated processes that develop their respective plans EXCEPT the knowledge areas that address the triple-constraint.

 

Answer to Question B:

================

The “Scope Management Plan”, “Schedule Management Plan” and the “Cost Management Plan” are all developed during the Develop Project Management Plan process. You can think up of the Develop Project Management Plan as a mighty process that either develops some of the contents of the “Project Management Plan” or accepts the inputs from other planning processes. The Develop Project Management Plan process cannot be completed until the “Risk Management Plan” is provided to it by the Plan Risk Management process, see PMBOK page:79. Similarly, the Plan Risk Management process cannot be completed until the “Cost Management Plan” is provided to it by the Develop Project Management Plan process. Now this creates a cycle (which is alright, as I will address to this in my next answer) as well as confusions to the readers. So the assumption here is, we have started the Develop Project Management Plan and have developed the plans for the triple-constraints, however we haven’t finished this process. We pause this process for a moment, and start the Plan Risk Management process, produce the “Risk Management Plan” to complete it, and provide this input back to the Develop Project Management Plan to complete it.

 

To summarize, since the Develop Project Management Plan is not complete when we are starting our Plan Risk Management, we cannot show (graphically) that we are receiving the “Cost Management Plan” from the Develop Project Management Plan to avoid the confusion. PMBOK is referring to “Project Cost Management” to point to a sub-process of the Develop Project Management Plan process because this sub-process should have been completed before we can start the Plan Risk Management process.

 

Answer to Question C:

================

Even if we replace the sub-process name “Project Cost Management” by the actual big process name, i.e, the Develop Project Management Plan in the figure pointed out by you at page 277, that will NOT make the diagram incorrect. The diagram is correct both ways. The approach taken by PMBOK is the one that creates less confusion.

 

Please also note that the process mentioned in the PMBOK guide are not discrete one-time effort. Even if the project is a single-phased project, you should not confuse these processes as a one time effort. Processes are revisited as more information regarding the project becomes apparent. PMBOK defines this as “progressive elaboration”. All the planning processes will be visited again and again until we are sure that we have sufficient planning information to actually start executing the project. That is the point where we will finally visit the Develop Project Management Plan and complete the “Project Management Plan” before we start the project execution.

 

Please also note a couple of points over here. First the Develop Project Management Plan process will be the last visited process during the project planning phase. Secondly, if during the project execution, we feel the need to modify the project plan, we will again revert back to all the relevant planning processes and conclude them again by visiting to the Develop Project Management Plan process.

 

I hope this would have cleared your confusions.

 

Regards,

 

Exam Support Team

The PM PrepCast - http://www.premiumcast.com/vp/50398/16780/10399/

Thanks a lot , you have cleared a doubt that was with me for long.
A big thanks to you once again...