How to do Cost Management in Project Management

Cost Management is one of the key knowledge areas of project management professional (PMP) training and certification.

As the name indicates it deals with all things money associated with the project. In very generic terms every single activity in a project leads to cost be if effort, labour, license, material, travel, equipment and others.

In a more contextual sense, Cost Management is all about:

·      estimating the project budget

·      planning the allocation of the budget to various phases and aspects of the project from initiation to closure

·      constant monitoring and controlling the budget to deliver the project within the agreed budget

Project Budget is the deciding factor on how you will run, manage and complete your project.

Once you have arrived at a budget, it obviously needs to be signed off/approved by your PMO and the stakeholders to ensure you have the right buy-in.  Hence, a robust business case before initiating a project proves helpful in generating the right awareness and interest in the project.

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