Cost management concerns itself with the process of planning and controlling the budget of a project or business. It involves the full lifecycle of a project from the planning to measuring actual cost performance and project completion. In this video, learn the process of planning and controlling the budget of a project such as planning, estimating, budgeting, and controlling costs.
- Cost estimates are just that estimates. … You may want accuracy … but a cost estimate will never be that. … I mean of course you'll get close … but never a hundred percent. … This means you have to be on top of the cost … throughout the project's life cycle from planning … all the way to measuring actual cost performance … when you complete the project. … So this means you need to learn to always manage your costs … and cost estimates. … The first thing is to plan in advance … for resources you'll need. … Knowing exactly what you need early in the project … or product development avoids any surprise costs … popping up during or at the end of your effort. … I've said this before and I'll say it again … you should always try to break down your project … using a work breakdown structure. … I can't emphasize enough … the success you'll have breaking down your effort … into its smaller components. … When done properly, … it helps to define resources you need … and helps to compare data and costs from similar projects. …
- Describe the limitations in reaching 100 percent accuracy in cost estimates.
- Differentiate between nominal, ratio, and ordinal data.
- Relate the reason for credible cost estimates to a company’s business needs.
- Determine situations in which a business would use the top-down estimating approach.
- Examine the validity of data and data collection given a scenario.
- Explore the differences between cost, value, and performance.