Some projects (especially IT and engineering projects) by nature are complex and contain more risk elements than other projects. As a project manager, you must pay careful attention to planning and budgeting by preparing cost estimates and forecasting future expenditures. Project cost management will help you capture the costs required to complete your project scope on schedule.
Three Processes of Project Cost Management
With reference to PMBOK, 4th edition, there are three basic processes for managing project cost. The processes are Estimating Cost, Determining Budget and Controlling Cost. These processes interact with each other and can be initiated and carried out at least once during a typical project. By reading the Cost Management Guidelines you will learn more on these processes. The Guidelines will be helpful for those people who want to get an understanding of project cost estimation and learn how to measure costs, define and allocate budgets, and control expenses and financial flows. The Guidelines include the following paragraphs:
- Estimating Project Cost
- Determining Project Budget
- Controlling Project Cost