An organization is starting a project using new technology that requires strong technical skills. The sponsor asks for options to reduce labor cost without introducing delivery risk. What should the project manager do first?

The project manager's first step should be to perform an analysis of key cost drivers and present alternatives. This is a proactive approach to understanding where the significant costs lie and identifying potential areas for reduction without immediately impacting delivery risk. Simply reviewing the risk register or assigning functional managers doesn't address the core request of reducing labor cost. Analyzing the resource pool and assigning internal personnel might be a solution, but it's premature without first understanding the cost drivers. Reviewing the WBS confirms resource adequacy for tasks, but not necessarily cost reduction strategies.