Total Cost Management
The identification and evaluation of capital investment options, development of capital project
scope, and project execution should all be part of an integrated process for an owner company.
This process is called Total Cost Management (TCM) by AACE International. This course will cover
the following TCM elements: development and evaluation of capital project investment options;
investment risk analysis and decision making; the development of project scope and project
execution plans that focus on cost estimate and schedule development; cost/schedule control of
projects during execution; and closing the process loop through asset and project knowledge
management.
Day 1
Day 1 provides an overview of the AACE International Total Cost Management Framework. The course
begins with describing two process lifecycles: 1) Strategic Asset Management; and 2) Project Control.
This leads to discussion of the identification and development of potential project investment options,
and the subsequent process of investment decision making that adequately addresses risk. The Phase-
Gate processes and systems typically used in capital project development is addressed; along with a
discussion of the importance of effective value improving practices. Issues with TCM knowledge
management are addressed, as well as appropriate organization and leadership issues to maximize
effective application of TCM principles.
TCM Process Overview
Strategic Asset Management and Project Control
Asset and Project Life Cycles, Portfolios, and Programs
Identification and Development of Project Investment Options
Risk Analysis and Decision Making for Project Investment Options
Capital Project Development Process (Phase-Gate Systems)
Overview of Value Improving Practices
TCM Knowledge Management
Organization and Leadership for TCM
Total Cost Management – Course Outline Page 1
Day 2
Day 2 begins with discussion of the importance of effectively establishing and communication the goals
and objectives of the potential investment decision. The balance of the day’s discussions will focus on
project planning – both from a cost and schedule perspective. The importance of effective cost/schedule
integration will be addressed; along with ensuring quality throughout the project planning process.
Establishing and Communicating Goals and Objectives
Project Planning Overview
Project Planning – Cost Estimating
o Estimate Classification
o Structuring the Estimate
o Estimating Methodologies
o Estimating Uncertainty
o Documenting the Estimate
Project Planning – Scheduling
o Schedule Classification
o Structuring the Schedule
o Schedule Development
o Scheduling Uncertainty
o Documenting the Schedule
Cost/Schedule Integration and Risk Evaluation
Project Planning - Quality Management
o Review and Validation
o Process Improvement
Total Cost Management – Course Outline Page 2
Day 3
Day 3 begins with a discussion on establishing control baselines against which project investment
performance will be measured and assessed. The initiation of project control processes and systems to
be used during project execution is addressed. The measurement of physical progress to aid in the
determination and assessment of performance indicators is discussed. The management of change is
addressed leading to discussion of effective cost and schedule forecasting. Issues with project recovery
are also addressed. The topic of project close-out is discussed, with a focus on closing the project loop in
regards to the collection and analysis of project historical information. Finally, ways in which to evaluate
organizational TCM competency in order to close potential gaps and drive investment performance are
presented.
Establishing Control Baselines
Initiating Control Processes and Systems
Measuring Progress and Performance
Assessing Performance
Change Management
Cost and Schedule Forecasting
Project Recovery
Project Close-Out and Closing the Project Loop
Evaluating Organizational TCM Competency
Total Cost Management – Course Outline Page 3
