Cost Control

The PMBOK^® Guide characterizes cost control in the following way: “Project cost control searches out the positive and negative variances and is part of Integrated Change Control.”^[4] The same holds true for an agile project; the agile project manager makes visible the team’s velocity. A higher-than-expected velocity could mean a lower number of iterations than initially planned; conversely, a lower-than-expected velocity could mean more iterations to implement the release backlog. With this information visible to the customer, the customer can then negotiate scope, authorize an increase in budget, or change the project’s release date in response to what’s happening.

The PMBOK^® Guide specifically states that controlling costs “includes influencing the factors that create changes to the cost baseline.”^[5] In other words, a project manager and/or the team may decide that it is worthwhile to contract phases of development in order to reduce project costs; these lower costs would then factor back into the cost baseline, and all actual costs would then be compared against the revised baseline. Another type of cost control is the decision to buy instead of build a solution (for example, a shopping cart). The team may investigate a third-party shopping cart and find that the cost of buying it is much less than building it from scratch. This lower-cost alternative, if approved by the customer, would be reflected in the new cost baseline. Often, the delivery team will identify and suggest reusable technologies in these types of situations; it is another reason why allowing the team to self-manage is so important. Having the ability to go back to the customer with a lower cost for building a feature allows him to spend the found savings on another feature.