The manager should understand that all information on the need, availability and consumption and of project resources like labor, money, time, technology can be gathered, filtered, sorted and managed by project cost management and its special methods. Definition Project Cost Management is a series of activities for estimating, allocating, and controlling costs within the project. It allows determining and approving budget for the project and controlling spending.
Book Publishing The Project Cost Management Processes Project Cost Management includes the processes involved in planning, estimating, budgeting, and controlling costs so that the project can be completed within the approved budget.
Project managers must make sure their projects are well defined, have accurate time and cost estimates and have a realistic budget that they were involved in approving. These processes interact with each other and with processes in the other Knowledge Areas as well.
Each process can involve effort from one or more persons or groups of persons based upon the needs of the project. Each process occurs at least once in every project and occurs in one or more project phases, if the project is divided into phases.
Although the processes are presented here as discrete elements with well-defined interfaces, in practice they may overlap and interact in ways not detailed here. Project Cost Management is primarily concerned with the cost of the resources needed to complete schedule activities. However, Project Cost Management should also consider the effect of project decisions on the cost of using, maintaining, and supporting the product, service, or result of the project.
This broader view of Project Cost Management is often called life-cycle costing. Life-cycle costing, together with value engineering techniques, can improve decision-making and is used to reduce cost and execution time and to improve the quality and performance of the project deliverable.
In others, such as a capital facilities project, Project Cost Management can include this work. When such predictions and analyses are included, Project Cost Management will address additional processes and numerous general management techniques such as return on investment, discounted cash flow, and investment payback analysis.
Project Cost Management considers the information requirements of the project stakeholders.
Different stakeholders will measure project costs in different ways and at different times. For example, the cost of an acquired item can be measured when the acquisition decision is made or committed, the order is placed, the item is delivered, and the actual cost is incurred or recorded for project accounting purposes.
On some projects, especially ones of smaller scope, cost estimating and cost budgeting are so tightly linked that they are viewed as a single process that can be performed by a single person over a relatively short period of time.
These processes are presented here as distinct processes because the tools and techniques for each are different. The ability to influence cost is greatest at the early stages of the project, and this is why early scope definition is critical.
Although not shown here as a discrete process, the work involved in performing the three processes of Project Cost Management is preceded by a planning effort by the project management team. This planning effort is part of the Develop Project Management Plan process, which produces a cost management plan that sets out the format and establishes the criteria for planning, structuring, estimating, budgeting, and controlling project costs.
The cost management processes and their associated tools and techniques vary by application area, are usually selected during the project life cycle definition, and are documented in the cost management plan. For example, the cost management plan can establish: Schedule activity cost estimates will adhere to a rounding of the data to a prescribed precision, based on the scope of the activities and magnitude of the project, and may include an amount for contingencies.
Each unit used in measurements is defined, such as staff hours, staff days, week, lump sum, etc. The WBS component used for the project cost accounting is called a control account. If cost estimates for planning packages are included in the control account, then the method for budgeting planning packages is included.The cost management plan is contained in, or is a subsidiary plan of, the project management plan and may be formal or informal, highly detailed or broadly framed, based upon the needs of the project.
An overall project control plan that gives advance warning of undesirable trends, deviations, slippages and other project problems so as to facilitate timely corrective action to .
Poor project cost management is one of the easiest ways to make a project go awry. Hence, good project management requires a firm grasp on the concepts and techniques in project budgeting and cost control..
Thankfully, the Project Management Body of Knowledge (PMBOK) gives us a strong foundation in this area..
Project Cost Management is the fourth of 10 project management . Project Cost Control. Link to Section 3. Project Planning and Schedule Control Project Performance Measurement.
Controlling the Project change requests also one of cost controlling procedure through execution phase and this can be done by knowing the main scope very well, and any deviation to the scope. project cost control procedure Purpose Overview The purpose of this procedure is to specify the requirements for cost control of CAE projects. Project cost control is a key responsibility of the Project Coordinator during the Development phase of each project and at an overview level for all projects from the Planning phase to Closeout. Basics of Cost and Schedule Control Dr. Mahmoud Abdel Salam Taha-Spring Topics • Monitoring and Scheduling: Two Parts of a • Project Cost Control Systems • Earned Value Method – Parameters –Example –Scenarios. Dr. Mahmoud Abdel Salam Taha-Spring Monitoring and Control: Two Parts of a Feedback System • Goal is to.
Project Controls Procedure - Overview and Function of Project Controls. Communication. The importance of good communication. Or telepathy as the alternate! Funny, but true. Video on the functions of Project Controls.
Enjoy. Cost control procedures are put to insure that your project costs no more than intended. Chris Henderson, the author of "Project Management for Construction," cites an old definition of a.
6 - The Project Management & Integrated Planning Department establishes the initial project cost estimate. The costs from each control account are summarized to establish an initial project cost estimate.
7 - The Project Management team reviews and finalizes the project cost estimate.