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(Cost Management Plan)
The cost management plan is a component of the project management plan and describes how the project costs will be planned, structured, and controlled. The cost management processes and their associated tools and techniques are documented in the cost management plan.

For example, the cost management plan can establish the following:
• Units of measure. Each unit used in measurements (such as staff hours, staff days, or weeks for time measures; meters, liters, tons, kilometers, or cubic yards for quantity measures; or lump sum in currency form) is defined for each of the resources.
• Level of precision. The degree to which activity cost estimates will be rounded up or down (e.g., US$100.49 to US$100, or US$995.59 to US$1,000), based on the scope of the activities and magnitude of the project.
• Level of accuracy. The acceptable range (e.g., ±10%) used in determining realistic activity cost estimates is specified, and may include an amount for contingencies.
• Organizational procedures links...
• Control thresholds. Variance thresholds for monitoring cost performance may be specified to indicate an agreed-upon amount of variation to be allowed before some action needs to be taken. Thresholds are typically expressed as percentage deviations from the baseline plan.
• Rules of performance measurement...
• Reporting formats...
• Process descriptions...
• Additional details...

(Data Representation)
A data representation technique that may be used in this process includes, but is not limited to, stakeholder mapping/representation. Stakeholder mapping and representation is a method of categorizing stakeholders using various methods. Categorizing stakeholders assists the team in building relationships with the identified project stakeholders. Common methods include the following:

• Power/interest grid, power/influence grid, or impact/influence grid. Each of these techniques supports a grouping of stakeholders according to their level of authority (power), level of concern about the project's outcomes (interest), ability to influence the outcomes of the project (influence), or ability to cause changes to the project's planning or execution. These classification models are useful for small projects or for projects with simple relationships between stakeholders and the project, or within the stakeholder community itself.

• Stakeholder cube. This is a refinement of the grid models previously mentioned. This model combines the grid elements into a three-dimensional model that can be useful to project managers and teams in identifying and engaging their stakeholder community. It provides a model with multiple dimensions that improves the depiction of the stakeholder community as a multidimensional entity and assists with the development of communication strategies.

• Salience model. This model describes classes of stakeholders based on assessments of their power (level of authority or ability to influence the outcomes of the project), urgency (need for immediate attention, either time-constrained or relating to the stakeholder's high stake in the outcome), and legitimacy (their involvement is appropriate). There is an adaptation of the salience model that substitutes proximity for legitimacy (applying to the team and measuring their level of involvement with the work of the project). The salience model is most useful for large, complex communities of stakeholders or where there are complex networks of relationships within the community. It is also useful in determining the relative importance of the identified stakeholders.

• Directions of influence. This classifies stakeholders according to their influence on the work of the project or the project team itself.

(Communication Technology)
The methods used to transfer information among project stakeholders may vary significantly... Factors that can affect the choice of communication technology include:
• Urgency of the need for information...
• Availability of technology...
• Ease of use...
• Project environment...
• Sensitivity and confidentiality of the information...

(Organizational Process Assets)
Fixed-price contracts. This category of contracts involves setting a fixed total price for a defined product, service, or result to be provided. These contracts should be used when the requirements are well defined and no significant changes to the scope are expected. Types of fixed-price contracts include:
• Firm fixed price (FFP). The most commonly used contract type is the FFP. It is favored by most buying organizations because the price for goods is set at the outset and not subject to change unless the scope of work changes.
• Fixed price incentive fee (FPIF). This fixed-price arrangement gives the buyer and seller some flexibility in that it allows for deviation from performance, with financial incentives tied to achieving agreed-upon metrics. Typically, such financial incentives are related to cost, schedule, or technical performance of the seller. Under FPIF contracts, a price ceiling is set, and all costs above the price ceiling are the responsibility of the seller.
• Fixed price with economic price adjustments (FPEPA). This type is used whenever the seller's performance period spans a considerable period of years, or if the payments are made in a different currency. It is a fixed-price contract, but with a special provision allowing for predefined final adjustments to the contract price due to changed conditions, such as inflation changes or cost increases (or decreases) for specific commodities.

(Sequential Iteration-Based Phases)
Adaptive projects are often decomposed into a sequence of phases called iterations. Each iteration utilizes the relevant project management processes. These iterations create a cadence of predictable, time-boxed, pre-agreed, consistent duration that aids with scheduling. Performing the Process Groups repeatedly incurs overhead. The overhead is considered necessary to effectively manage projects with high degrees of complexity, uncertainty, and change.

Section X3.2.2 Continuous Overlapping Phases Projects that are highly adaptive will often perform all of the Project Management Process Groups continuously throughout the project life cycle. Inspired by techniques from lean thinking, the adaptive approach is often referred to as “continuous and adaptive planning,” which acknowledges that once work starts, the plan will change, and the plan needs to reflect this new knowledge. The intent is to aggressively refine and improve all elements of the project management plan, beyond the prescheduled checkpoints associated with Iterations.

These highly adaptive approaches continuously pull tasks from a prioritized list of work. This aims to minimize the overhead of managing Process Groups repeatedly, by removing the start and end of iteration activities. Continuous pull systems can be viewed as micro-iterations with an emphasis on maximizing the time available on execution rather than management. They do, however, need their own planning, tracking, and adjustment mechanisms to keep them on track and adapt to changes.

(Precedence Diagramming Method)
The precedence diagramming method (PDM) is a technique used for constructing a schedule model in which activities are represented by nodes and are graphically linked by one or more logical relationships to show the sequence in which the activities are to be performed.

(Procurement Documentation)
Procurement documentation provides a written record used in reaching the legal agreement, and may include older documents predating the current project. Procurement documentation can include the following:
• Bid documents: procurement documents include the RFI, RFP, RFQ, or other documents sent to sellers so they can develop a bid response.
• Procurement statement of work: the procurement statement of work (SOW) provides sellers with a clearly stated set of goals, requirements, and outcomes from which they can provide a quantifiable response.
• Independent cost estimates: independent cost estimates are developed either internally or by using external resources and provide a reasonableness check against the proposals submitted by bidders.
• Source selection criteria: these criteria describe how bidder proposals will be evaluated, including evaluation criteria and weights. For risk mitigation, the buyer may decide to sign agreements with more than one seller to mitigate damage caused by a single seller having problems that impact the overall project.

Project scope statement may contain explicit scope exclusions that can assist in managing stakeholder expectations. Scope exclusions are often a result of project constraints.

Constraints may give rise to opportunities through removing or relaxing a limiting factor that affects the execution of a project or process.

Glossary: A limiting factor that affects the execution of a project, program, portfolio, or process.

The benefits management plan describes key elements of the benefits and may include, but is not limited to, documenting:
• Target benefits (e.g., the expected tangible and intangible value to be gained by the implementation of the project; financial value is expressed as net present value);
• Strategic alignment (e.g., how well the project benefits align to the business strategies of the organization);
• Time frame for realizing benefits (e.g., benefits by phase, short-term, long-term, and ongoing);
• Benefits owner (e.g., the accountable person to monitor, record, and report realized benefits throughout the time frame established in the plan);
• Metrics (e.g., the measures to be used to show benefits realized, direct measures, and indirect measures);
• Assumptions (e.g., factors expected to be in place or to be in evidence); and
• Risks (e.g., risks for realization of benefits).

(Project Quality Management)
Quality and grade are not the same concepts. Quality as a delivered performance or result is “the degree to which a set of inherent characteristics fulfill requirements” (ISO 9000 [18]). Grade as a design intent is a category assigned to deliverables having the same functional use but different technical characteristics. The project manager and the project management team are responsible for managing the trade-offs associated with delivering the required levels of both quality and grade. While a quality level that fails to meet quality requirements is always a problem, a low-grade product may not be a problem. For example:

• It may not be a problem if a suitable low-grade product (one with a limited number of features) is of high quality (no obvious defects). In this example, the product would be appropriate for its general purpose of use; or
• It may be a problem if a high-grade product (one with numerous features) is of low quality (many defects). In essence, a high-grade feature set would prove ineffective and/or inefficient due to low quality.

(Communication Models)
The communication models used to facilitate communications and the exchange of information may vary from project to project and also within different stages of the same project. A basic communication model, shown in Figure 10-4, consists of two parties, defined as the sender and receiver. Medium is the technology medium and includes the mode of communication, while noise includes any interference or barriers that might compromise the delivery of the message.

The components of the basic communications model need to be considered when project communications are discussed. As part of the communications process, the sender is responsible for the transmission of the message, ensuring that the information being communicated is clear and complete, and confirming the communication is correctly understood. The receiver is responsible for ensuring that the information is received in its entirety, understood correctly, and acknowledged or responded to appropriately.

(Communication Models)
The components of the basic communication model need to be considered when project communications are discussed. As part of the communications process, the sender is responsible for the transmission of the message, ensuring that the information being communicated is clear and complete, and confirming the communication is correctly understood. The receiver is responsible for ensuring that the information is received in its entirety, understood correctly, and acknowledged or responded to appropriately.

Listening is an important part of communication. Listening techniques, both active and passive, give the user insight to problem areas, negotiation and conflict management strategies, decision making, and problem resolution.

(Manage Quality)
Manage Quality is the process of translating the quality management plan into executable quality activities that incorporate the organization's quality policies into the project. The key benefits of this process are that it increases the probability of meeting the quality objectives as well as identifying ineffective processes and causes of poor quality. Manage Quality uses the data and results from the Control Quality process to reflect the overall quality status of the project to the stakeholders. This process is performed throughout the project.

Key concepts for Project Cost Management include the following:
• Project Cost Management is primarily concerned with the cost of the resources needed to complete project activities, but it should also consider the effect of project decisions on the subsequent recurring cost of using, maintaining, and supporting project deliverables.
• Different stakeholders will measure project costs in different ways and at different times. Stakeholder requirements for managing costs should be considered explicitly.
• Predicting and analyzing the prospective financial performance of the project's product may be performed outside the project, or it may be part of Project Cost Management.

(Three-Point Estimating)
The accuracy of single-point duration estimates may be improved by considering estimation uncertainty and risk. Using three-point estimates helps define an approximate range for an activity's duration:
• Most likely (tM). This estimate is based on the duration of the activity, given the resources likely to be assigned, their productivity, realistic expectations of availability for the activity, dependencies on other participants, and interruptions.
• Optimistic (tO). The activity duration based on analysis of the best-case scenario for the activity.
• Pessimistic (tP). The duration based on analysis of the worst-case scenario for the activity.

Depending on the assumed distribution of values within the range of the three estimates, the expected duration, tE, can be calculated. One commonly used formula is triangular distribution: tE = (tO + tM + tP) / 3. Triangular distribution is used when there are insufficient historical data or when using judgmental data. Duration estimates based on three points with an assumed distribution provide an expected duration and clarify the range of uncertainty around the expected duration.

(Data Representation)
Stakeholder engagement assessment matrix.
A stakeholder engagement assessment matrix supports comparison between the current engagement levels of stakeholders and the desired engagement levels required for successful project delivery.

The engagement level of stakeholders can be classified as follows:
• Unaware. Unaware of the project and potential impacts.
• Resistant. Aware of the project and potential impacts, but resistant to any changes that may occur as a result of the work or outcomes of the project. These stakeholders will be unsupportive of the work or outcomes of the project.
• Neutral. Aware of the project, but neither supportive nor unsupportive.
• Supportive. Aware of the project and potential impacts, and supportive of the work and its outcomes.
• Leading. Aware of the project and potential impacts, and actively engaged in ensuring that the project is a success.

(Rolling Wave Planning)
Rolling wave planning is an iterative planning technique in which the work to be accomplished in the near term is planned in detail, while work further in the future is planned at a higher level. It is a form of progressive elaboration applicable to work packages, planning packages, and release planning when using an agile or waterfall approach. Therefore, work can exist at various levels of detail depending on where it is in the project life cycle. During early strategic planning when information is less defined, work packages may be decomposed to the known level of detail. As more is known about the upcoming events in the near term, work packages can be decomposed into activities.

(Plan Stakeholder Engagement)
Plan Stakeholder Engagement is the process of developing approaches to involve project stakeholders based on their needs, expectations, interests, and potential impacts on the project. The key benefit is that it provides an actionable plan to interact effectively with stakeholders. This process is performed periodically throughout the project as needed. (The PMBOK® Guide – Fifth Edition called this process Plan Stakeholder Management.)

(Control Scope)
Control Scope is the process of monitoring the status of the project and product scope and managing changes to the scope baseline. The key benefit of this process is that the scope baseline is maintained throughout the project. This process is performed throughout the project.

Controlling the project scope ensures all requested changes and recommended corrective or preventive actions are processed through the Perform Integrated Change Control process. Control Scope is also used to manage the actual changes when they occur and is integrated with the other control processes. The uncontrolled expansion to product or project scope without adjustments to time, cost, and resources is referred to as scope creep. Change is inevitable; therefore, some type of change control process is mandatory for every project.

(Leads and Lags)
A lead is the amount of time a successor activity can be advanced with respect to a predecessor activity. For example, on a project to construct a new office building, the landscaping could be scheduled to start two weeks prior to the scheduled punch list completion. This would be shown as a finish-to-start with a two-week lead. Lead is often represented as a negative value for lag in scheduling software.

A lag is the amount of time a successor activity will be delayed with respect to a predecessor activity. For example, a technical writing team may begin editing the draft of a large document 15 days after they begin writing it. This can be shown as a start-to-start relationship with a 15- day lag. Lag can also be represented in project schedule network diagrams as shown in Figure 6-11 in the relationship between activities H and I (as indicated by the nomenclature SS + 10 [start-to-start plus 10 days lag] even though the offset is not shown relative to a time scale).