Based on:
Cost baseline: The cost baseline refers to the budget plan determined at the beginning of the project and is the main basis for project cost control. All cost control activities are based on the cost baseline.
Cost performance indicators: Cost performance indicators are indicators used to measure project cost control, such as cost performance index (CPI) and cost deviation index (CV). They provide information about the difference between the actual cost and the budget.
Trend analysis: By analyzing the trend between actual cost and budget, the future cost trend of the project can be predicted so as to take timely control measures.
Method:
Monitoring and comparison: During the project implementation, regularly monitor the difference between actual cost and budget. This can be achieved by comparing the actual cost with the budget and calculating the cost performance index.
Analyze cost deviation: determine the difference between actual cost and budget, and analyze the reasons for the difference. This may involve scope change, resource adjustment, efficiency issues, etc.
Adjust the budget: If the actual situation of the project changes, it may be necessary to adjust the budget. In this way, a new budget can be made according to the actual situation to adapt to the changes.
Change management: For any scope change or resource adjustment that may lead to cost change, strict change management process is needed to ensure the rationality and impact of the change.
Control measures: If it is found that the cost deviation exceeds a certain limit, the project team needs to take control measures to restore the cost to the budget. This may include reallocating resources, optimizing schedules and finding opportunities for cost savings.
Risk management: incorporate cost risk into the risk management plan of the project, identify potential cost risks and formulate corresponding countermeasures.
Continuous monitoring: Cost control is a continuous process, and it is necessary to continuously monitor the actual cost and budget at different stages of the project in order to deal with problems in time.
In short, the goal of project cost control is to ensure that the project cost is kept within the budget. This requires the close cooperation of the project team, monitoring and analyzing the actual situation, and taking appropriate control and adjustment measures as needed.
Having professional project cost management software helps to analyze and organize project cost information in one source, which can create work breakdown structure, link estimation, integration with other tools, visibility to different team members and other functions.
8Manage PM project management software does not regard cost management as an isolated function, but regards it as an integral part of project and portfolio performance, and associates data between projects. It allows you to set clear expectations, control the scope, track the progress and maintain the expected profit.