Project Management Practices Cost Control

Cost control is the means for a project to stay within the bounds of the prescribed project budget. It involves continual monitoring of the project plan, tracking actual work and cost information, and taking corrective action where needed. If a task early in the project costs more than expected, costs might have to be trimmed in later tasks. In addition, outside forces might affect the project budget. For example, certain material costs might have gone up from the time you developed your plan to the time you're actually procuring the material. Or your company might undertake a cost-cutting initiative that requires you to cut all project costs by 15 percent.

When changes to project costs take place, you might have to adjust assignments or scope to bring costs in line with the budget. If you have a positive cost variance, the scheduled or current cost is more than your planned baseline cost. If you have a negative cost variance, the scheduled cost is less than your baseline cost. Although you certainly need to know why costs are higher than planned, you also should look into costs that are lower than planned. Lower costs can point to potential problems with increased risk, and perhaps with quality issues.

Earned value analysis is particularly useful for cost control. With variances and earned value analysis, you can assess the differences between planned and scheduled costs, determine their causes, and decide whether corrective actions are needed.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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