Introduction to Project Cost Management
Cost Management is one of the primary functions of Project Managers. When integrated with the scope/quality of the project and time management, these three functions form the core of Project Management.
The cost management function maintains its important focus at every stage throughout the life cycle of a project. In listing the reasons for the success of a project, the management of cost is the most important as all project aspects affect this function. What counts for the owner is the “bottom line.” (Georgas, P. C. & Vallance, G. V., 1987)
Project cost management is a process that involves planning, estimating, budgeting, monitoring, and controlling the implementation of a project in relation to the budget or money to be prepared.
Cost Management is the process of accumulating, organizing, and analyzing the data that is required to make cost-related decisions for the purpose of obtaining maximum financial effectiveness.
(Parry, M. H.,1983)
Most project managers’ primary responsibility is to manage a project’s expenses. Many feel that cost control is the essence of project management when combined with time management. Concerns about cost and time management have undoubtedly led to the development of the primary strategies that we consider to be exclusive to project management Parry, M. H. (1983).
Cost Management VS Cost Control
The process of planning and controlling a project or business’s budget is referred to as cost management. Planning, estimating, budgeting, financing, funding, managing, and controlling costs are all part of this process to ensure that the project is finished within the agreed budget. It includes the entire project life cycle, from the original planning phase to the actual cost performance measurement and project conclusion.
Cost Control is concerned with measuring variances from the cost baseline and taking effective corrective action to achieve minimum cost overruns. Procedures are used to track spending and performance against a project’s progress. All changes to the cost baseline need to be recorded and the expected final total costs are continuously forecast
Reference เอกสารประกอบการบรรยาย Cost Management for Real Estate Development Project/Asst. Prof. Nattasit Chaisaard, Ph.D. (Construction Engineering and Management) SFHEA