The Plan Cost Management is a process in project management that establishes the different procedures, policies, and documentation needed to plan, manage, expand, and control the cost of the project. The main advantage of this process is that it gives guidance as well as direction on how the project costs should be managed all throughout the implementation of the project.
To create the Plan Cost Management, necessary inputs are required such as the project management plan, project charter, enterprise environmental factors and the organizational process assets. All of these are necessary so that this particular process can create the cost management plan.
Implementing this particular process can help organizations keep their overall budget under control. When applying the process to a particular project, the expected cost are already calculated even if the project is still in its planning phase. It is important that all of the expenses will be recorded and monitored to ensure that they will meet the cost management plan.
Without the Plan Cost Management, it will be difficult for project managers to even begin the project because there are no means to direct and control the cost.
This term is defined in the 5th edition of the PMBOK.