Solana Barton

ITD 4113
Module 6-9 Article Review
Professor Claborn
How to Manage Cost in Project Management
Cost management in Project management is a key part in whether the project will
have the means and needs to be successful or not. Without the proper funds and
allocation a project could be ruined before it has even begun, it could also cause issues
regarding trust and happiness with stakeholders. Setting proper expectations,
evaluating realities, and making a thorough and detailed budget are things that will all
help assist project managers and their teams in cost management. As said in the
Clarizen article “How to Manage Cost in Project Management” cost management is one
of the pillars of good project management. If cost management is not successful, the
project is most likely going to fail.
In the article written by the Clarizen Team, they proceed with giving tips and
pointers on how to approach budgeting, cost control along with documenting metrics
and costs for the project. The first step they reference for managing cost is planning.
The writers suggest meeting with your team to lay out an estimate of costs needed for
the budget. This is an important step to be able to estimate how much is needed for
different stages of the project and what parts of the project will cost the most money to
complete overall. When calculating the budget that will go towards the project, people,
material, hardware and software should all be included. These are some things that can
be missed because they sometimes either already are in place and no one is thinking of
them in regards to the project or just are not thought of as project costs in general. After
the budget is created this will help keep monetary goals in line, keep the project
manager and team on track and aware of spending, and give a clear outline of the
baseline budget and spending.
The next topic in having a successful project that the article covers in
establishing cost control. Cost control is important in all aspects of life, not only project
management. Yet, cost control can determine a project’s success and length of life, or
death if the project teams run out of funds. The article mentions making sure to have
someone responsible and overseeing the cost control of the project as well as
implementing signatures for signing off on responsibilities. This includes invoices,
timesheets and reciepts. This will help keep ownership and responsibility intact
regarding the planning and cost expenditure.
Part of cost control is comparing your estimated budget with what the actual cost
and spending is/was. It’s extremely important to make sure to tweak and track the
budget allocated for the project and record what the influx price or deficit was. This will
assist with staying on the project’s budget and consistently reinforcing expectations and
realistic costs. When keeping track of the budget and amount spent on the project, the
project team will be able to adjust their planning and take action as needed opposed to
adding up the cost at the end and being overwhelmed, stressed and in a bind. The
article proposes adding up and calculating the metrics and comparing to the baseline at
the end of each reporting period to keep track of the cost, and plan to take action if
needed but it would be even more efficient to do this halfway through the period as well
to assure that the team is not extremely far off and caught off guard at the end of the
reporting period.
The article's last suggestion on managing cost in project management is
updating the forecast. This means updating the predictions on the baseline budget
estimates, now the project manager and team members have outlines in the baseline
cost and budget. They make the accurate statement that a project manager and their
team never want to be surprised by the budget losses and have to end up asking
stakeholder’s for more money. By comparing the estimated budget and actual cost
spent multiple times during the project, this will bring any alarming issues to the project
manager’s attention. The Clarizen team believes “Revisiting these numbers on a
monthly basis will allow you to initiate any changes that need to take place and adjust
the budget accordingly”. Being able to manage cost and budget is an important skill for
a project manager to have.
Project manager’s have a lot on their minds, so knowing who is responsible for
what is important for keeping a project running smoothly. Clarizen states “project
management is all about careful planning and continuous updates”. By team members
allocating tasks and using the sign-off method project’s will be more successful and
project managers will be less stressed out, thus creating a successful project and a
successful team.
Monthly budgeting and cost management are going to be one of the most
important skills a project management team will need to possess. Clarizen confidently
states “And when the budget is on point, then the project is generally successful.”. This
statement is true, powerful and motivating. Projects will have a very hard time
succeeding if the budget is a monstrosity and way off in numbers. Being blunt makes
true statements have a powerful effect, this is what also makes this statement
motivating. This statement makes a project management team want to give the proper
attention and importance to cost management and budgeting that it deserves. Project
managers should hang this statement on a banner in the team’s meeting room or break
room. This would help set the standard and get people motivated about the project and
budget.
Overall all of these tips will help go towards a successful project and project
management team. A skillful project manager would recognize all of these important
aspects and put them in play during a project. To quote the article again “when the
budget is on point, then the project is generally successful.” This is an important fact to
remember cost management, and motivate a successful budget.
References
https://www.clarizen.com/manage-cost-project-management/