Project Cost Planning and Management
By Todd Fleming
Cost management on projects ranges from the sophisticated to the non-existent. The value to managing costs on projects is pretty obvious. By knowing the true cost of project work, you can make decisions on the value of taking on certain work, and you can ensure that the work you have decided to take on is not costing more than it’s worth.
While most people would agree with the value of project cost management, some organizations do not effectively manage project costs. The approach can even differ within a single company. One business unit may be very disciplined, while another may not. This article is intended for companies or business units who do not comprehensively or routinely manage project costs.
Four Components to Cost Management
When you boil down all of the cost related activities on a project, there are really four key components:
- Estimating costs – accurately determining what costs will be before the project work is started
Tracking costs – keeping track of all costs on a project, and being able to review cost information in a timely fashion
Controlling costs – being able to influence the spend on a project while it is in progress
Maintaining cost data – archiving cost information in such a way that it can be used for future projects
There are a lot of ways to estimate costs. Read the Complete Article