What is the best way to use CPM scheduling for project cost management?

1 Understand your project scope and objectives

Before you start creating your CPM schedule, you need to have a clear vision of what you want to achieve with your project. Define your scope, deliverables, quality standards, and stakeholder expectations. This will help you establish your project baseline, which is the reference point for measuring your performance and costs. You also need to identify your project objectives, such as time, cost, and quality. These will guide your decision-making and trade-offs throughout the project.

2 Break down your project into manageable tasks

The next step is to decompose your project into smaller and more manageable tasks. This will help you estimate the duration, resources, and costs of each task more accurately. You can use a work breakdown structure (WBS) to organize your tasks into a hierarchical structure that shows the relationship between them. A WBS also helps you assign roles and responsibilities, and avoid scope creep.

3 Determine the dependencies and sequence of your tasks

Once you have your tasks defined, you need to determine how they are related to each other. Some tasks may depend on the completion or start of others, while some may be independent or parallel. You can use a network diagram to show the logical sequence and dependencies of your tasks. A network diagram also helps you identify the critical path, which is the longest path of dependent tasks that determines the project duration. Any delay on the critical path will affect the project completion date.

4 Estimate the duration, resources, and costs of your tasks

After you have your network diagram, you need to estimate how long each task will take, what resources you will need, and how much it will cost. You can use various methods to estimate your task duration, such as expert judgment, historical data, or statistical analysis. You also need to consider the availability and allocation of your resources, such as labor, materials, equipment, and subcontractors. Finally, you need to estimate the costs of your tasks, including direct and indirect costs, overheads, and contingencies.

5 Monitor and update your CPM schedule regularly

The last step is to monitor and update your CPM schedule regularly throughout the project. You need to compare your actual performance and costs with your baseline, and identify any variances or deviations. You also need to track any changes or risks that may affect your schedule, and implement corrective or preventive actions. By updating your CPM schedule, you can keep your project on track, communicate your status, and manage your stakeholders' expectations.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?