Information System Project Manager: Key Points of project cost management Thesis Writing

Cost Management

 

The basic process of cost management:

Cost Estimation, cost budget, and cost control

 

Significance of each stage of cost management:

Cost Estimation: Prepare an approximate estimate of the resource costs required to complete various project activities.

Cost budget: allocate the total cost estimate to the Work Package of each activity to establish a cost baseline.

Cost Control: control changes to the project budget.

 

Tools and methods for each stage of cost management:

Cost Estimation: Analogy estimation (top-down estimation), Item List (bottom-up method), project management software,

Quality Cost

Cost budget: total costs, management reserves, parameter models, and rationalization principles of expenditures

Cost Control: Cost Change Control System, Earned Value Management, deviation analysis, trend analysis, and project management software.

 

Reasons for cost loss:

· Cost estimation and cost budgeting are not accurate and meticulous-the work is not meticulous

· No unified standards and specifications available-No standards and specifications

· Misunderstandings in ideological understanding: projects are innovative and overbudgeting is inevitable-misunderstandings in ideological understanding

 

Three steps for cost estimation:

1. Identify and analyze the components of project costs-identify subjects

2. estimate the cost of each tutorial-estimate the size

3. Analyze the cost estimation results, identify various alternative costs, and coordinate the proportional relationship between various costs-coordination

Link

Three major functions of project cost budget:

1. The project cost budget is an activity for allocating project resources as planned to ensure that all projects can obtain the required resources.

Types of resources

2. project cost budget is also a control mechanism

3. The project cost budget provides a yardstick for monitoring the project implementation progress

 

Cost Budgeting steps:

1. apportioned the total cost of the project to each work package-apportioned

2. subdivided the cost budget obtained from each work package into various activities-subdivided

3. determine the time plans of various cost and budget expenditures, and the cumulative budget costs corresponding to each time point, and formulate the project cost and budget plan.-Plan

Main work content of cost control:

1. Identify factors that change the plan-Identification

2. supervise the implementation of cost based on the Work Package

3. Manage work packages with deviations in costs and take corrective actions-Measures

4. Notify related project personnel of the adjusted cost baseline plan for the approved cost change-Notification

5. prevent improper, inappropriate, or unauthorized project changes from being included in the project cost budget-prevent

6. It should be closely integrated with scope changes, progress changes, and quality control to prevent unacceptable risks due to pure control of the above three aspects-control

From: www.cnitpm.com