Summary

Cost management includes estimating cost, determining budget, and controlling cost. You use the scope baseline to estimate the monetary resources needed to complete the project activities. The activity cost estimates and project schedule are used to determine the project budget, which is the cost with a timeline attached to it. The approved budget that includes the aggregated cost with a timeline is called the cost baseline. The cost performance of the project is monitored, measured, and controlled against this baseline. This is why it’s also called a cost performance baseline.

The three fundamental parameters of scope, schedule, and cost are intrinsically related to each other. For example, if you change one of them, one or both of the other parameters will change as well. This constraint is known as the triple constraint. Therefore, project performance is measured by comparing the project execution to the performance measurement baseline, which is an approved integrated plan for scope, schedule, and cost for the project. In other words, the performance baseline includes scope baseline, cost baseline, and schedule baseline.