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The tools and techniques for the Process 7.4 Control Costs contain some which I call “generic”, meaning that they are used in every monitoring and controlling process called “Control X” where “X” stands for any knowledge area, including cost management.    Then there are some which are used specifically for schedule and/or cost management, like Data Analysis techniques such as

• Earned Value Analysis,
• Variance Analysis
• Trend Analysis
• Reserve Analysis

and the To-Complete Performance Index (TCPI) which uses earned value analysis as a forecast tool.

Let me quickly cover in this post the “generic” tools and techniques, and then in the next post, I’ll start covering earned value analysis.

The generic tools and techniques used in this process are (note that the numbering is not consecutive, because I am selecting out only those tools and techniques which are generic).

7.4.2 Control Costs:  Tools and Techniques

7.4.2.1 Expert Judgment

You want to make use of the expert judgment of either people on your project team or others who have expertise in the following areas:

• Earned value analysis (one of the main Data Analysis Techniques to uncover whether there is a variance between the actual costs of activities and the planned costs for those activities according to the project budget)
• Variance analysis (one of the Data Analysis Techniques done to determine the source of the variance if one is uncovered during earned value analysis)
• Trend analysis and forecasting (including the To-Complete Performance Index or TCPI, these Data Analysis Techniques will show what will happen to the project as a whole, either with regards to the overall project schedule or budget, if current trends continue that are uncovered by earned value analysis)
• Financial analysis (especially to see if funding for project is remaining within project funding requirements)

7.4.2.4 Project Management Information System (PMIS)

This is a tool, rather than a technique, and it is the software system used to monitor the three basic quantities used in earned value analysis, namely PV (planned value), EV (earned value), and AC (actual cost). and to assist with trend analysis and forecasting.

In the next post, then, we will start discussing Data Analysis Techniques starting with earned value analysis.   This is important not just for project managers doing a project, but for those studying for the PMP exam, because PMI loves asking questions about earned value analysis on the certification exam!

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