2. 1. Resource Planning
To control costs, it is crucial to clearly understand
what resources are needed and how much they
will cost. By understanding the worth of the
project's resources and by planning how those
resources will be used.
3. Several steps can be taken to manage project costs in resource planning:
- Identify all of the project's resources and understand their costs.
- Determine how those resources will be used throughout the project.
- Create a resource plan that details how and when the resources will be
used.
- Monitor and adjust the resource plan as needed to ensure the project
stays within budget.
4. 2. Cost Estimation
It is essential to understand the cost estimation
process to manage project costs. Cost estimation
is the process of predicting the cost of a project
based on its scope and complexity.
5. 3. Cost Budgeting
This budget will include all of the expenses associated
with the project, from materials to labour. It is essential
to be as accurate as possible when creating the
budget, as this will ensure that the project stays on
track and within budget.
6. 4. Cost Control
Most project managers use a cost control system to
track project expenditures and to ensure that the
project stays within its budget.
7. Benefits of Project Cost Management
1. Prevents overruns:
Cost management avoids cost overruns and ensures
that the project stays within its budget. This, in turn,
prevents project delays and ensures that the project is
completed on time and within its budget.
8. Benefits of Project Cost Management
2. Avoids risk:
Cost management can help to prevent troubles and
keep the project on track and within its budget by
avoiding cost overruns. Risks can include cost
overruns, leading to project delays and increased
costs.
9. Benefits of Project Cost Management
2. Avoids risk:
Cost management can help to prevent troubles and
keep the project on track and within its budget by
avoiding cost overruns. Risks can include cost
overruns, leading to project delays and increased
costs.
10. 3. Aids future planning:
Cost management provides information that can help
managers predict future project costs. This information
can be used to create more accurate budgets and
make better decisions about allocating resources.
11. Challenges of Project Cost Management
1. Lack of resources:
When a company is trying to save money, it may need
more money to invest in new technologies or hire
additional staff.
12. Challenges of Project Cost Management
2. Inaccurate estimation:
This can be difficult for several reasons, but often the
root cause is a need for more understanding of what
goes into the product or service being delivered. Other
times, it is simply a lack of experience on the part of
the estimator.
13. Challenges of Project Cost Management
3. Outdated technology:
One of the challenges of cost management is that
obsolete technology can lead to inaccurate estimates.
This is because outdated technology may need to
accurately account for all the factors that go into the
product or service delivered.
