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Cost planning

Cost planning in Agile project management and costs calculation

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Cost planning in Agile project management and costs calculation

The following article is part of the self-preparation for the modern BVOP® Project Management Certification program.

This chapter explains the concept of Cost planning in the context of BVOP.

  1. What is Cost planning?
  2. Cost planning at Agile Project Management Practices
  3. Who plans and calculates costs?
  4. Predefined costs
  5. Costs for development

What is Cost planning?

Cost planning is the activity that the project manager performs at the beginning of the project to calculate all the necessary costs associated with the project and represents a formal evaluation of the total costs.

Cost planning may not be related to the whole project, but only to specific activities and parts of the project.

In Waterfall project management practices, cost planning typically refers to all the work that needs to be completed and includes all additional costs such as wages, rents for premises, purchase of consumables, parts, materials, tools, machines, and more.

Cost planning at Agile Project Management Practices

Regardless of whether a project or product is developed following Waterfall or an iterative approach, the necessary costs for development still often need to be calculated in order for stakeholders to have an idea of ​​the needed investment.

Modern literature does not indicate clear concepts, rules, and practices for cost planning in Agile methodologies, but we recommend that you have a good understanding of this topic as you may need to answer these questions in a real situation.

Who plans and calculates costs?

Usually, the project manager plans and calculates costs. Key roles from all other teams consult the project manager on cost types.

In Agile methodologies, cost planning is not a topic of concern and there are no popular examples.

Scrum also has no rules regarding cost planning.

However, BVOP recommends that every Agile-oriented professional or Scrum participant be aware of this matter. BVOP has created a mechanism for calculating estimated development time using relative units. You can find more information in the next chapters.

About this chapter

This chapter is part of the BVOP Project and Program Management Certification program guide.

Cost planning may include:

  • Predefined costs 
  • Costs for development

Predefined costs

The predefined costs may consist of all project costs that are not related to its development or maintenance.

These may include costs for:

  • Staff hiring
  • Marketing
  • Sales
  • Acquisitions
  • Operations
  • Legal
  • Taxes
  • Tools and environment

Predefined cost planning is implemented at the earliest possible stage of the project.

Costs for development

Costs for development are applied in early stages, after planning the major deliverables, where each deliverable (item, module, feature, service, or any other related activity) may be roughly estimated.

Detailed cost plans at this stage can be considered as a forecast, and all stakeholders should be aware of possible changes.

Detailed and more accurate planning can be done when project development begins, and real data is used to predict the time to complete efforts.

Updating development costs can take place over specific periods if the organization needs timely updates and calculations of the estimated costs.

The following issues related to chapter "Cost planning" are included in the certification exam. The sequence of questions is presented in the table.
The data is current as of July 8, 2024, 5:35 pm

ID Issue Time Category
0 Costs for development 60 sec PM, PDM
1 Cost planning at Agile Project Management Practices 60 sec PM, PDM
2 Who plans and calculates costs? 60 sec PM, PDM
3 What is Cost planning? 60 sec PM, PDM
4 Predefined costs 60 sec PM, PDM

Comments from the BVOP™ community on “Cost planning”

Anna Muller

Careful costing of projects is a common and mandatory practice in classic project management practices. I would like to draw the attention of Agile teams where this topic is neglected or not given enough attention due to the fact that popular work models such as Scrum and Kanban, for example, do not include in their teaching the topic of planning and costing.

It is often noticed that even senior management and stakeholders also ignore the topic of costs by focusing only on the end results and a working product at all costs. Lack of follow-up of a preliminary cost plan can be a major factor in depleting funding and available resources, after which projects are often unable to continue their development.


Cost planning is the process of calculating all the costs associated with a project. It can be done for specific activities or the entire project. In Waterfall project management, cost planning includes all necessary work and additional costs such as wages, rents, and materials. Even in Agile methodologies, costs still need to be calculated for stakeholders to understand the investment needed. While there are no clear concepts or rules for cost planning in Agile, it's important to have a good understanding of the topic.

Project managers typically plan and calculate costs, with input from other team members. Agile methodologies and Scrum have no specific rules for cost planning, but BVOP recommends that all professionals be aware of it. BVOP has a mechanism for estimating development time using relative units. More information can be found in later chapters.

Cost planning involves predefined costs and costs for development. Predefined costs cover all project expenses not related to development or maintenance, such as staff hiring, marketing, sales, acquisitions, operations, legal, taxes, tools, and environment. Predefined cost planning should be done at the earliest stage of the project. Costs for development are applied after planning the major deliverables and can be estimated roughly. Detailed cost plans at this stage are considered a forecast, and stakeholders must be aware of possible changes. More accurate planning can be done when project development begins and real data is used to predict development time.

Comments on “Cost planning in Agile project management and costs calculation”

  1. Marta Kirilova

    Hi all, "Predefined cost planning is implemented at the earliest possible stage of the project." What if not everything can be planned at the earliest possible stage, and later the project reveals additional costs that were not identified earlier?

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