The importance of cost control in project management success is something every project manager is familiar with. The ability to maintain an organized approach to tasks while staying aware of cost control is not an easy skill. Although time and resource management are vital to achieving goals, cost performance is ultimately what determines a positive project outcome.
To establish a suitable amount of control over the budget, a project manager must exercise strict cost supervision. In other words, they have to be conscious of where funds are allocated at all times and if anything needs to change to meet the set budget. Project managers should never be caught with going over budget unexpectedly.
Ultimately, the subset of all project management is cost management. If you cannot manage simple costs, you will have an even harder time handling complex projects. The ability to control the budget means a project manager must be able to identify the source of costs, to begin with. The following are a few areas a project manager should keep their eye on when practicing efficient cost management:
- Original budget
- Current approved cost
- Forecasted vs. Actual cost
- Committed cost
Once a project manager is familiar with the areas to watch there are also a few tools they can utilize to stay on track.
Tips for Successful Cost Control
Regardless of experience or skills, budget discrepancies can still occur. While they typically cannot be eliminated entirely, identifying them early on can reduce their impact later and their occurrence in future projects. The following are a few ways to successfully manage a project budget and maintain cost control:
- Capture the entire scope in your WBS Statement
- Insist on input and collaboration from outside stakeholders
- Determine the cost categories used in the organization
- Develop a project management team trust
- Take action immediately
A project schedule can be used in conjunction with a thorough WBS to closely monitor cost and determine early on when a budget is in danger of overrunning. Another means of cost management, is through cost control software, which is also the most modern and exact measure.
Cost Control Technology
The importance of cost control can most closely be defined when using project management software. Enterprises can efficiently assess all aspects of costs associated with a project within minutes. They can evaluate, optimize and control all aspects of cost management from a single dashboard.
Planview AdaptiveWork project management technology enables project managers to perform cost management tasks like:
- Monitor all costs in real-time to ensure they stay aligned with the budget
- Chart out task and team-based costs
- Track productivity to estimate billable hours
- Set task-based and hourly rates as required
Cost control is critical and an enterprise cannot afford to underestimate the budget on an important project. The most efficient means of modern budget control is through technology. A software program like Planview AdaptiveWork can help project managers stay on track and automate simple calculations. With tools like this, project managers can focus on what they do best: leading the project to success.