Cost Management

Cost management is one of the fundamental and yet most challenging tasks for a project manager.

7 Things You Need to Know About Development Project Estimations

Whether you are a project manager planning for a smooth implementation of a plan or a project sponsor on whose decisions a project depends, you cannot escape from the fact that project estimation is essential to its success. In the first place, there are three basic requirements that a project must satisfy: schedule, budget, and quality. The need to work within these essential project boundaries poses a huge challenge to everyone in the central management team.

Estimating: Part 3

In this last article of the series, I'll cover a potpourri of other estimating topics including the key outcome of estimating, converting effort estimates into budgets, dealing with poorly defined work, and what to do when management thinks it should cost less or take less time.

Estimating: Part 2

This is the second of three articles on estimating. It may seem obvious, but the first requirement for developing an estimate is to know what you are estimating. For now, let's assume that you have been asked to estimate how much effort (how much of your time) is likely to be required to paint your bedroom. Although this is a fairly small activity, it is still one with a significant amount of uncertainty.

Effort Estimating: A Primer

Estimating is a forbidding topic for some. I've even heard intelligent, experienced project managers assert that it is "impossible" to estimate the work on their project. I think that these people just don't understand estimating. I think that these people may be confusing estimating (making informed assessments of uncertain events) with extra sensory perception (making exact predictions of uncertain events). Or in some cases, they may be trying to prepare budgets or prices in the absence of estimates.

5 Ways to Finesse Budget Discussions for New Client Projects

Do you have difficulty engaging in budget discussions for new projects, particularly during initial client meetings when it can be tempting to make promises that will be challenging to carry out? If so, you're not alone! This article explores five ways to help you gracefully avoid backing yourself into a corner.

Make or Break: Why Accurate Cost Estimation Is Key

The accuracy of your cost estimation process can make or break project success. Learn the strategies that will help you gain control of this key area and ensure future project profitability! One of the greatest challenges for a project leader is to successfully deliver on all aspects of a project both according to the client's specifications and within the allotted budget.

3 Main Benefits of Project Baselining

When you have finished planning your project, and you have all the scheduled dates, hours, and costs (and charges if applicable) agreed, why is it a good idea to store those values? We explore the reasons.

Project Cost Management

How do we know what a project will cost? We really don't, until the project is complete. I sound more like a car mechanic than a project manager, but the truth is, and this may sting just a little, we can't know the final project cost until the project is complete because we can't accurately predict the future. What we can do is create an estimate.

12 Tips for Accurate Project Estimating

Projects typically involve many dynamic aspects, yet they're often constrained by finite conditions. These contradictory forces make it very difficult to determine with pinpoint accuracy the time and effort required. By using a set of proactive estimating techniques to scope, plan, and constrain your project conditions, you can dramatically improve your estimating practices, reduce and mitigate risks, and increase your project success rate.

Estimating Project Costs

Estimating is the process of forecasting a future result in terms of cost, based upon information available at the time. Many techniques, books and software packages exist to help with estimating project costs. A few basic rules will also help ensure that an accurate and realistic estimate is produced.

 Monte Carlo Simulation in MS Excel

The Monte Carlo method is based on the generation of multiple trials to determine the expected value of a random variable. There are a number of commercial packages that run Monte Carlo simulation; however a basic spreadsheet program (such as Microsoft Excel) can be used to run a simulation.

Forecasting Support Costs

Did you know that maintenance accounts for 50% to 80% of the overall product cost? Well, it does! And while most project managers are fairly good at sizing new product features, many are terrible at estimating the effort required to support a product once it becomes generally available. As a result, maintenance projects are inadequately staffed, companies can't respond to customer requests in a timely manner, and products never reach payback.

 Cost Benefit Analysis

The cost benefit analysis is based on the comparison of a base case and one or more alternatives. For each case all the cash flows over a period of time are identified and organised into a spreadsheet. The bottom line is the net cash flow after tax. This series of cash flows can be converted to a present value (NPV) by using an appropriate discount rate.