Project cost management is the process of planning and controlling the budget of a particular team working on a specific task. Teams in an organization perform planning, estimating, budgeting, and controlling cost activities to help them complete a project within the approved budget. Without proper cost management, there’s a serious possibility that operational costs will go beyond than what is necessary.

Project cost management also ensures that a project goes through proper stages—from initial planning to actual cost assessment to project completion.

 

it-project-cost-management-guide-5-tips-to-success_infographic-01

Steps in Project Cost Management

There are five steps involved in the project cost management namely resource planning, cost estimating, cost budgeting, cost control, and change control.

1. Resource planning

This identifies what resources and how much of them are needed to complete the project, including physical resources, time, material or equipment, office space, and the like so that associated costs can be determined.

Additionally, there may be costing needed for comprehensive design reviews, extensive testing, external audit, and other contingency measures—all of which need to be included in this scope.

2. Cost estimating

This predicts how much it will cost the team to perform each project-related activity based on various techniques such as analogous method (using the actual cost of similar projects in the past as basis) or using parametric models (where project characteristics are represented in mathematical terms).

3. Cost budgeting

This allocates the budget to each work phase, taking into consideration the period when the cost will be incurred. Then, a cost baseline, a time-phased budget is approved and used as a starting point for measuring the plan’s actual performance progress.

4. Cost control

With the cost baseline established, cost control now involves collecting actual costs to date, preparing expenditure reports, examining cost trends, forecasting the total project cost, comparing estimated total costs with the approved budget, and comparing variances from previous reports to present.

5. Change control

Making changes to the cost baseline should be recorded in this phase, along with explanations on what’s causing the variance. Then, making the necessary adjustments is done to help minimize costs before the approval of the change control board.

 

Tips on Project Cost Management for IT

Project management professionals should observe the following good practices in developing project planning and costing:

1. Make reasonable estimates.

By reasonable standards, it means you neither underestimate nor overestimate costs, and that requires you gathering enough information about the project to help you determine costs correctly.

One of the perfect examples for this is adding acceptable extra project hours into your proposed plan, especially since you have to consider the area and level of expertise of each of your members. In the same vein, being too liberal might result in your estimates being shot down by your budget officer.

In addition, making room for additional hours can be a contingency measure in case something goes amiss along the way.

2. Track your progress using Earned Value Analysis.

For big projects, especially, tracking if the project is on target with your schedule and budget can be more difficult. The method of Earned Value Analysis (EVA) measures project progress through the cost performance index (CPI) and schedule performance index (SPI). Whereas, the former calculates how the project is going based on the allotted budget, while the latter calculates based on the allotted timeline.

3. Utilize a hybrid approach in estimating costs.

Your team can benefit from combining several cost estimating methods such as analogous estimating, factor estimating, bottom-up or detailed estimating, and parametric models to help you come up with the best cost estimates.

Your choice estimation method will usually depend on the level of information available to you. You can also request other project members or stakeholders to review your costing for additional input or insights.

5. Communicate project estimates to senior management.

By having knowledge in cost estimation and finance, you can present, discuss, defend, and explain all those number estimates to management. As much as possible, be ready to translate technical terms into a financial perspective that senior executives can understand better.

6. Explore the possibility of using project and portfolio management.

Project and portfolio management (PPM) is a technique that organizations use to evaluate the risks and rewards of a project, determine the source of funds, and choose which projects to execute. IT project managers can take advantage of this approach to understanding how their projects affect different groups within the organization.

 


To sum up, cost management helps project management professionals maximize resources, track the budget plan, stick to the approved budget, and avoid any unfortunate development that might stall the timely and efficient completion of the project.

To help you gain proper knowledge and skills in these areas, APEX has lined up a comprehensive course for you as a Project Management Professional. It’s your right program of choice if you’re looking to create your next project cost management plans like real experts do.

calendar_popup

Calendar

No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
Dec 18 - Oct 19Agile SCRUM PractitionerManila, Philippines
Jan 22 - Jan 23Enterprise Risk ManagementManila, Philippines
Jan 25 - Jan 26Agile SCRUM PractitionerManila, Philippines
Jan 29 - Jan 31OMCA™ - Online Marketing Certified AssociateManila, Philippines
Jan 30 - Jan 31MS Excel Advanced Features (2010/2013)Manila, Philippines
Feb 5 - Feb 7Certified Business Analysis Professional (CBAP®) TrainingManila, Philippines
Feb 7 - Feb 8ITIL Foundation (2011)Manila, Philippines
Feb 12 - Feb 15Project Management Professional (PMP)® Training - REP #4536Manila, Philippines
Feb 13 - Feb 14ISMS (Information Security Management Systems) PractitionerManila, Philippines
Feb 19 - Feb 24Combined Lead Auditor (CLA) Training - ISMS, BCMManila, Philippines
Feb 20 - Feb 21DevOps FoundationManila, Philippines
Feb 22 - Feb 23CompTIA Cloud EssentialsManila, Philippines
Feb 26 - Feb 28Certified Data Center Professional (CDCP)® TrainingManila, Philippines
Feb 26 - Feb 27ITIL Foundation (2011)Manila, Philippines
Feb 28 - Mar 2Certified Data Center Specialist (CDCS)® TrainingManila, Philippines
Mar 1 - Mar 2BIA - Business Intelligence and Analytics FoundationManila, Philippines
Mar 5 - Mar 7Certified Business Analysis Professional (CBAP®) TrainingManila, Philippines
Mar 5 - Mar 7OMCA™ - Online Marketing Certified AssociateManila, Philippines
Mar 6 - Mar 8CQL - Certified Quality LeaderManila, Philippines
Mar 8 - Mar 9DevOps FoundationManila, Philippines
Mar 12 - Mar 13COBIT 5 FoundationManila, Philippines
Mar 12 - Mar 13Complaints Management - Turning Complaints to ComplimentsManila, Philippines
Mar 14 - Mar 16CPRE - Certified Professional for Requirements EngineeringManila, Philippines
Mar 19 - Mar 22Project Management Professional (PMP)® Training - REP #4536Manila, Philippines
Mar 19 - Mar 20Big Data FoundationManila, Philippines
Mar 22 - Mar 23CCP - Crisis Communication Planner (ICOR Certified) TrainingManila, Philippines
Mar 22 - Mar 26Accelerated Six Sigma Green BeltManila, Philippines
Mar 31 - Mar 31MS Excel Advanced Features (2010/2013)Manila, Philippines
Apr 10 - Apr 11Business Continuity Management PractitionerCebu City, Philippines
Apr 10 - Apr 11MS Projects 74-343Manila, Philippines
Apr 11 - Apr 12BIA - Business Intelligence and Analytics AdvancedManila, Philippines
Apr 19 - Apr 20DevOps FoundationManila, Philippines
Apr 23 - Apr 2Certified Business Analysis Professional (CBAP®) TrainingManila, Philippines
Apr 26 - Apr 27ITIL Foundation (2011)Manila, Philippines
Apr 26 - Apr 2Agile SCRUM PractitionerManila, Philippines
May 9 - May 11BCM Lead Implementer - ISO 22301 (ICOR Certified)Manila, Philippines
May 10 - May 11Intro to Project ManagementCebu City, Philippines
May 17 - May 18ITIL Foundation (2011)Manila, Philippines
May 17 - May 18MS Excel Advanced Features (2010/2013)Manila, Philippines
May 24 - May 25Certified Data Center Professional (CDCP)® TrainingManila, Philippines
May 24 - May 25Enterprise Risk ManagementManila, Philippines
May 24 - May 2DevOps FoundationManila, Philippines
May 27 - Jun 1Certified Data Center Expert (CDCE)® TrainingManila, Philippines
May 30 - May 31Big Data FoundationManila, Philippines
Jun 14 - Jun 15MS Excel Advanced Features (2010/2013)Manila, Philippines
Jun 14 - Jun 15DevOps FoundationManila, Philippines
Jun 19 - Jun 22Project Management Professional (PMP)® Training - REP #4536Manila, Philippines
Jun 20 - Jun 22CPRE - Certified Professional for Requirements EngineeringManila, Philippines
Jun 21 - Jun 22CCP - Crisis Communication Planner (ICOR Certified) TrainingManila, Philippines
Jun 21 - Jun 22CompTIA Cloud EssentialsManila, Philippines
Jun 25 - Jun 26ITIL Foundation (2011)Manila, Philippines
Jul 11 - Jul 12PRINCE2 FoundationManila, Philippines
Jul 12 - Jul 13Business Continuity Management PractitionerCebu City, Philippines
Jul 12 - Jul 13BIA - Business Intelligence and Analytics AdvancedManila, Philippines
Jul 19 - Jul 20ITIL Foundation (2011)Manila, Philippines
Jul 19 - Jul 20ISMS (Information Security Management Systems) PractitionerManila, Philippines
Jul 24 - Jul 25Intro to Project ManagementCebu City, Philippines
Jul 30 - Jul 31DevOps FoundationManila, Philippines
Aug 9 - Aug 10Business Continuity Management PractitionerCebu City, Philippines
Aug 16 - Aug 17Certified Data Center Professional (CDCP)® TrainingManila, Philippines
Aug 16 - Aug 17MS Excel Advanced Features (2010/2013)Manila, Philippines
Aug 20 - Aug 21Agile SCRUM PractitionerManila, Philippines
Aug 23 - Aug 24ITIL Foundation (2011)Manila, Philippines
Aug 28 - Aug 31Project Management Professional (PMP)® Training - REP #4536Manila, Philippines
Aug 29 - Aug 31Certified Business Analysis Professional (CBAP®) TrainingManila, Philippines
Aug 29 - Aug 3Big Data FoundationManila, Philippines
Aug 30 - Aug 31DevOps FoundationManila, Philippines
Sep 1 - Sep 14MS Excel Advanced Features (2010/2013)Manila, Philippines
Sep 5 - Sep 7Certified Business Analysis Professional (CBAP®) TrainingManila, Philippines
Sep 10 - Sep 15Combined Lead Auditor (CLA) Training - ISMS, BCMManila, Philippines
Sep 17 - Sep 18MS Excel Advanced Features (2010/2013)Manila, Philippines
Sep 20 - Sep 21ITIL Foundation (2011)Manila, Philippines
Sep 20 - Sep 21Enterprise Risk ManagementManila, Philippines
Sep 24 - Sep 27Project Management Professional (PMP)® Training - REP #4536Manila, Philippines
Sep 24 - Sep 25DevOps FoundationManila, Philippines
Sep 27 - Sep 28CompTIA Cloud EssentialsManila, Philippines
Oct 15 - Oct 17Certified Business Analysis Professional (CBAP®) TrainingManila, Philippines
Oct 18 - Oct 19BIA - Business Intelligence and Analytics FoundationManila, Philippines
Oct 18 - Oct 19DevOps FoundationManila, Philippines
Oct 18 - Oct 19Intro to Project ManagementCebu City, Philippines
Oct 25 - Oct 2MS Projects 74-343Manila, Philippines
Oct 29 - Oct 30ITIL Foundation (2011)Manila, Philippines
Nov 8 - Nov 9MS Excel Advanced Features (2010/2013)Manila, Philippines
Nov 12 - Nov 13DevOps FoundationManila, Philippines
Nov 13 - Nov 15BCM Lead Implementer - ISO 22301 (ICOR Certified)Manila, Philippines
Nov 15 - Nov 16MS Excel Advanced Features (2010/2013)Manila, Philippines
Nov 20 - Nov 23Project Management Professional (PMP)® Training - REP #4536Manila, Philippines
Nov 21 - Nov 23Certified Business Analysis Professional (CBAP®) TrainingManila, Philippines
Nov 21 - Nov 23CPRE - Certified Professional for Requirements EngineeringManila, Philippines
Nov 22 - Nov 23ITIL Foundation (2011)Manila, Philippines
Nov 27 - Nov 28Certified Data Center Professional (CDCP)® TrainingManila, Philippines
Nov 27 - Nov 28Enterprise Risk ManagementManila, Philippines
Nov 28 - Nov 29Big Data FoundationManila, Philippines
Dec 6 - Dec 7ITIL Foundation (2011)Manila, Philippines
Dec 6 - Dec 7CompTIA Cloud EssentialsManila, Philippines
Dec 10 - Dec 11Business Continuity Management PractitionerCebu City, Philippines
Dec 10 - Dec 11Intro to Project ManagementCebu City, Philippines
Dec 11 - Dec 12MS Excel Advanced Features (2010/2013)Manila, Philippines
Dec 13 - Dec 14DevOps FoundationManila, Philippines
x

Calendar

No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
No class / event scheduled for this month
Dec 18 - Oct 19Agile SCRUM PractitionerManila, Philippines
Jan 22 - Jan 23Enterprise Risk ManagementManila, Philippines
Jan 25 - Jan 26Agile SCRUM PractitionerManila, Philippines
Jan 29 - Jan 31OMCA™ - Online Marketing Certified AssociateManila, Philippines
Jan 30 - Jan 31MS Excel Advanced Features (2010/2013)Manila, Philippines
Feb 5 - Feb 7Certified Business Analysis Professional (CBAP®) TrainingManila, Philippines
Feb 7 - Feb 8ITIL Foundation (2011)Manila, Philippines
Feb 12 - Feb 15Project Management Professional (PMP)® Training - REP #4536Manila, Philippines
Feb 13 - Feb 14ISMS (Information Security Management Systems) PractitionerManila, Philippines
Feb 19 - Feb 24Combined Lead Auditor (CLA) Training - ISMS, BCMManila, Philippines
Feb 20 - Feb 21DevOps FoundationManila, Philippines
Feb 22 - Feb 23CompTIA Cloud EssentialsManila, Philippines
Feb 26 - Feb 28Certified Data Center Professional (CDCP)® TrainingManila, Philippines
Feb 26 - Feb 27ITIL Foundation (2011)Manila, Philippines
Feb 28 - Mar 2Certified Data Center Specialist (CDCS)® TrainingManila, Philippines
Mar 1 - Mar 2BIA - Business Intelligence and Analytics FoundationManila, Philippines
Mar 5 - Mar 7Certified Business Analysis Professional (CBAP®) TrainingManila, Philippines
Mar 5 - Mar 7OMCA™ - Online Marketing Certified AssociateManila, Philippines
Mar 6 - Mar 8CQL - Certified Quality LeaderManila, Philippines
Mar 8 - Mar 9DevOps FoundationManila, Philippines
Mar 12 - Mar 13COBIT 5 FoundationManila, Philippines
Mar 12 - Mar 13Complaints Management - Turning Complaints to ComplimentsManila, Philippines
Mar 14 - Mar 16CPRE - Certified Professional for Requirements EngineeringManila, Philippines
Mar 19 - Mar 22Project Management Professional (PMP)® Training - REP #4536Manila, Philippines
Mar 19 - Mar 20Big Data FoundationManila, Philippines
Mar 22 - Mar 23CCP - Crisis Communication Planner (ICOR Certified) TrainingManila, Philippines
Mar 22 - Mar 26Accelerated Six Sigma Green BeltManila, Philippines
Mar 31 - Mar 31MS Excel Advanced Features (2010/2013)Manila, Philippines
Apr 10 - Apr 11Business Continuity Management PractitionerCebu City, Philippines
Apr 10 - Apr 11MS Projects 74-343Manila, Philippines
Apr 11 - Apr 12BIA - Business Intelligence and Analytics AdvancedManila, Philippines
Apr 19 - Apr 20DevOps FoundationManila, Philippines
Apr 23 - Apr 2Certified Business Analysis Professional (CBAP®) TrainingManila, Philippines
Apr 26 - Apr 27ITIL Foundation (2011)Manila, Philippines
Apr 26 - Apr 2Agile SCRUM PractitionerManila, Philippines
May 9 - May 11BCM Lead Implementer - ISO 22301 (ICOR Certified)Manila, Philippines
May 10 - May 11Intro to Project ManagementCebu City, Philippines
May 17 - May 18ITIL Foundation (2011)Manila, Philippines
May 17 - May 18MS Excel Advanced Features (2010/2013)Manila, Philippines
May 24 - May 25Certified Data Center Professional (CDCP)® TrainingManila, Philippines
May 24 - May 25Enterprise Risk ManagementManila, Philippines
May 24 - May 2DevOps FoundationManila, Philippines
May 27 - Jun 1Certified Data Center Expert (CDCE)® TrainingManila, Philippines
May 30 - May 31Big Data FoundationManila, Philippines
Jun 14 - Jun 15MS Excel Advanced Features (2010/2013)Manila, Philippines
Jun 14 - Jun 15DevOps FoundationManila, Philippines
Jun 19 - Jun 22Project Management Professional (PMP)® Training - REP #4536Manila, Philippines
Jun 20 - Jun 22CPRE - Certified Professional for Requirements EngineeringManila, Philippines
Jun 21 - Jun 22CCP - Crisis Communication Planner (ICOR Certified) TrainingManila, Philippines
Jun 21 - Jun 22CompTIA Cloud EssentialsManila, Philippines
Jun 25 - Jun 26ITIL Foundation (2011)Manila, Philippines
Jul 11 - Jul 12PRINCE2 FoundationManila, Philippines
Jul 12 - Jul 13Business Continuity Management PractitionerCebu City, Philippines
Jul 12 - Jul 13BIA - Business Intelligence and Analytics AdvancedManila, Philippines
Jul 19 - Jul 20ITIL Foundation (2011)Manila, Philippines
Jul 19 - Jul 20ISMS (Information Security Management Systems) PractitionerManila, Philippines
Jul 24 - Jul 25Intro to Project ManagementCebu City, Philippines
Jul 30 - Jul 31DevOps FoundationManila, Philippines
Aug 9 - Aug 10Business Continuity Management PractitionerCebu City, Philippines
Aug 16 - Aug 17Certified Data Center Professional (CDCP)® TrainingManila, Philippines
Aug 16 - Aug 17MS Excel Advanced Features (2010/2013)Manila, Philippines
Aug 20 - Aug 21Agile SCRUM PractitionerManila, Philippines
Aug 23 - Aug 24ITIL Foundation (2011)Manila, Philippines
Aug 28 - Aug 31Project Management Professional (PMP)® Training - REP #4536Manila, Philippines
Aug 29 - Aug 31Certified Business Analysis Professional (CBAP®) TrainingManila, Philippines
Aug 29 - Aug 3Big Data FoundationManila, Philippines
Aug 30 - Aug 31DevOps FoundationManila, Philippines
Sep 1 - Sep 14MS Excel Advanced Features (2010/2013)Manila, Philippines
Sep 5 - Sep 7Certified Business Analysis Professional (CBAP®) TrainingManila, Philippines
Sep 10 - Sep 15Combined Lead Auditor (CLA) Training - ISMS, BCMManila, Philippines
Sep 17 - Sep 18MS Excel Advanced Features (2010/2013)Manila, Philippines
Sep 20 - Sep 21ITIL Foundation (2011)Manila, Philippines
Sep 20 - Sep 21Enterprise Risk ManagementManila, Philippines
Sep 24 - Sep 27Project Management Professional (PMP)® Training - REP #4536Manila, Philippines
Sep 24 - Sep 25DevOps FoundationManila, Philippines
Sep 27 - Sep 28CompTIA Cloud EssentialsManila, Philippines
Oct 15 - Oct 17Certified Business Analysis Professional (CBAP®) TrainingManila, Philippines
Oct 18 - Oct 19BIA - Business Intelligence and Analytics FoundationManila, Philippines
Oct 18 - Oct 19DevOps FoundationManila, Philippines
Oct 18 - Oct 19Intro to Project ManagementCebu City, Philippines
Oct 25 - Oct 2MS Projects 74-343Manila, Philippines
Oct 29 - Oct 30ITIL Foundation (2011)Manila, Philippines
Nov 8 - Nov 9MS Excel Advanced Features (2010/2013)Manila, Philippines
Nov 12 - Nov 13DevOps FoundationManila, Philippines
Nov 13 - Nov 15BCM Lead Implementer - ISO 22301 (ICOR Certified)Manila, Philippines
Nov 15 - Nov 16MS Excel Advanced Features (2010/2013)Manila, Philippines
Nov 20 - Nov 23Project Management Professional (PMP)® Training - REP #4536Manila, Philippines
Nov 21 - Nov 23Certified Business Analysis Professional (CBAP®) TrainingManila, Philippines
Nov 21 - Nov 23CPRE - Certified Professional for Requirements EngineeringManila, Philippines
Nov 22 - Nov 23ITIL Foundation (2011)Manila, Philippines
Nov 27 - Nov 28Certified Data Center Professional (CDCP)® TrainingManila, Philippines
Nov 27 - Nov 28Enterprise Risk ManagementManila, Philippines
Nov 28 - Nov 29Big Data FoundationManila, Philippines
Dec 6 - Dec 7ITIL Foundation (2011)Manila, Philippines
Dec 6 - Dec 7CompTIA Cloud EssentialsManila, Philippines
Dec 10 - Dec 11Business Continuity Management PractitionerCebu City, Philippines
Dec 10 - Dec 11Intro to Project ManagementCebu City, Philippines
Dec 11 - Dec 12MS Excel Advanced Features (2010/2013)Manila, Philippines
Dec 13 - Dec 14DevOps FoundationManila, Philippines
ENROLL NOW








REQUEST A CUSTOM QUOTE








Request a callback
REQUEST FOR CALLBACK