To take a simple, real-life example, if you decide to build a house, the first thing to do is set the budget. The importance of cost management is easy to understand. Why is Project Cost Management Important? It helps to create a financial baseline against which project managers can benchmark the current status of their project costs and realign the direction if needed. Hence, project cost management is one of the key pillars of project management and is relevant regardless of the domain, be it manufacturing, retail, technology, construction and so on. its execution quality is of a high standard.it delivers on the requirements and scope.
Project cost management is the process of estimating, budgeting and controlling costs throughout the project life cycle, with the objective of keeping expenditures within the approved budget.įor a project to be called successful, it’s necessary that In this article, we look at what project cost management is, its benefits and the steps involved in its implementation.
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Understanding what project cost management is and how to be effective at it can be beneficial for organizations to stay on course. This is certainly not good news for enterprises as cost overruns not only impact their margins, but also hinder the ability to execute future projects. Only 57% of the projects finished within their initial budgets, with the others exceeding the target they had set for themselves. But what is the reality on the ground? In a PMI report, 14% of the surveyed IT projects were deemed as failures. Organizations aim for their projects to be successful and to meet client expectations as well as their internal objectives.
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