Project Cost Management

  • one of the constraints in Project Management

  • usually measured in monetary value

  • goal is to complete the project within the approved budget

Significance

  • scheduling a project longer than it should be presents a higher risk of cost overrun

  • "weak area" of IT projects

Overview Process

  1. Plan Cost Management

  2. Estimate Costs

  3. Determine Budget

  4. Control Costs

Types

  1. Rough Order of Magnitude

  2. Budgetary Estimate

  3. Definitive Estimate

Estimate Type When Range

ROM

3 to 5 years before project completion

-50% to +100%

Budgetary

1 to 2 years out

-10% to +25%

Definitive

less than a year out

-5% to +10%

Please see: * Net Present Value * Return on Investment * Payback Analysis