2 Ways on How to Manage Cost in Your Project

Cost management is one of the important areas of project management, during your planning stage, cost management involved two (2) processes the activity cost estimates and determine project budget.

1. Activity Cost Estimates :

Is the application of measurable method to establish costs of the resources needed to complete the activity. Cost estimates are often expressed in currency units, such as dollar and peso, and will be progressively elaborated and refined when data and information are available.

Generally, cost of an activity refers to costs pertaining to materials, manpower or labor, equipment, services, and contingencies. Activity cost estimates can be performed by using analogous estimating, parametric estimating, three-point estimating, or bottom-up estimating and this document is to be created during project planning.

Here is the Analogous estimating sample format for costs.

Here is the Parametric estimating;

Now you have the cost estimates, the next thing you should do is determining your project budget. Determining your project budget by simply establishing your cost baseline.

2. Determine project budget :

Cost performance baseline is a time phased budget at completion of the project. This is commonly presented in the form of S-Curve for monitoring and controlling the cost for the project. This document is often created during planning stage of your project.

For your project success,

Marvin