Planning, Estimating, Controlling and Managing Project Cost:
Cost management involves knowing the financial and human resources required to complete a project within an approved budget. The PMBOK describes three areas or processes for effective cost management along with Planning Cost Management:
- Estimate Costs
- Determine Budget
- Control Costs
- Estimating the Costs
The first step in cost management is to estimate the costs of each activity in the project. Costs include both human resource and physical resource costs. Because this step often occurs in the planning phase, it is important to understand that the estimated costs are your “best guesses” at the actual costs of each activity.
- Determining the Budget –
Using your best-guess estimates, the next step is to create a realistic project budget. In this step, you will determine the cost baseline and the funding requirements for the project. A good project budget will help you make key decisions with respect to the project schedule and resource allocation constraints.
- Controlling the Costs –
Good project managers will carefully monitor the cost of their projects. This includes watching to see where actual cost has varied from estimated cost. Cost control also involves informing the stakeholders of cost discrepancies that vary too much from the budgeted cost.
By learning how to estimate costs, determine budgets, and control costs, you can be a better project manager and leader. Effective cost management will you help you get projects done on time and under budget, the golden ticket for any successful project manager.
Planning, Estimating, Controlling and Managing Project Cost Pre-Requisites:
- Basic Computer Knowledge
- Passion to Learn
Planning, Estimating, Controlling and Managing Project Cost Target Audience:
- Management Students who wish to learn about Project Management
- Working Professionals
- Anyone interested in learning about Project Management