info@bidkon.com.au Phone: +61 430194637

5 Challenges to Effective Cost Controls

Cost management is the most critical portion of managing any project and any change in cost estimation directly impacts on the project schedule and scope. The accurate practice of project cost control is very important in any project in order to successfully attain the project goal. Advancement in technology has made a mind-set of stakeholders to complete the entire project within tight schedules and low project cost. There are a number of challenges that occur while practicing project cost control in any project.

Following are the top five challenges that comes across for effective cost controls:

Controlling Scope Variation

For any project, a budget is prepared beforehand and it is very common to have an inevitable variation in the scope, which leads to variation in the budget. In this scenario, it is very important for the project manager to control the changes in scope. It can be identified that only controlling the variation in scope would help the project manager to make the budget manageable. Therefore, controlling this variation in cost is due to scope variation, which is very difficult and is one of the major challenges faced for effective cost controls.

Accurate Cost Analysis

Every project requires appropriate analysis of costs for the resources within the project. Project professionals are frustrated due to the difficulty they face in managing and maintaining cost accounting for the project. It is very important for the project professionals to implement effective cost analytical tools in order to monitor the cash flow within the project. Hiring an appropriate accountant for cost analysis is the common challenge that project professionals come across while attaining the required target.

Integrating Schedule and Cost

Aligning the schedule and budget of the project is another difficult task that project professionals come across in cost control management. In every project, managers of Controlling and monitoring activities and managers for managing cost codes, fiscal periods, and transactions are typically different. Managers responsible for managing WBS (Work Breakdown Structure) and task activities are least aware about the cost analysts who monitors the flow of cash for each activity and so, it becomes very difficult for the cost analysts or accountants to control costs for each task. Therefore, it accounts as a major challenge for project managers to control cost.

Accurate Reporting

In every project, customers are involved in the project where customers might include stakeholders, the IT business unit, funding authorities, and many more. These customers demand regularly for accurate reports for each activity in order to check its proceedings. Sometimes, it becomes very difficult for a project manager to provide error free reports of all departments associated with the project to its customers.

Adapting Advanced Technology

There are numerous advancement in project cost management but only an appropriate usage of this technology can lead in attaining the project’s goal. Despite all major advancements in technology, project managers are afraid of adapting it correctly. This is also a common challenge to cost control management faced by many project professionals.

Cost management is the most critical portion of managing any project and any change in cost estimation directly impacts on the project schedule and scope. The accurate practice of project cost control is very important in any project in order to successfully attain the project goal. Advancement in technology has made a mind-set of stakeholders to complete the entire project within tight schedules and low project cost. There are a number of challenges that occur while practicing project cost control in any project.

Cost-Control- Bidkon Quantity Surveyors

Cost management is the most critical portion of managing any project and any change in cost estimation directly impacts on the project schedule and scope. The accurate practice of project cost control is very important in any project in order to successfully attain the project goal. Advancement in technology has made a mind-set of stakeholders […]

Read More »

5 Benefits of Project Cost Management

Cost management is considered as the key factor behind the success of any project. Before beginning any project, the first question that arises is “the cost of project”. Engineers consider project cost management as the series of activities, which leads to estimate, allocate, and control the overall costs of the project. Project cost control management is very important to control the cash-flow of overall project in meeting the target. Cost is one of the three constraints, which impacts the quality of the project. Any deviation in projects costs impacts the other two constraints of project quality i.e., schedule and scope. Therefore, it is very important to keep project cost management on high priority in order to attain the required project goal.
Exceeding project costs is one of the common elements behind failure of every 4 out of 5 projects. So, project cost management plays a very important role in managing and controlling the flow of cost for various resources in different tasks of the project.

Following are the benefits of project cost management:
Decreased Expenses
Implementing cost management in a project enables the project manager to directly control the flow of cost for resources in an appropriate manner. Cost management helps the project manager to limit the overall paychecks of different employees at different levels. This will allow the project manager to hold back more amount and use it for future resources. By using project cost management technique, a company can easily reduce its overall capital expenses.

Operational Efficiency
Project cost management can directly help in determining the total sum required for each task within the project. This helps in managing the activities based on determined costs of the project and therefore, enables the project tasks to run smoothly. Other than this, project cost management also helps in comparing the estimated project costs with the actual cost of each task and identify the components, whose costs are required to be controlled.

Identify Procurement Effectiveness
Every project requires vendors to gather required resources for the project. Major portion of the overall project budget is utilized for procurement activity, so it is very important to effectively manage it. Project cost management helps in identifying various vendors and selecting the most profitable vendor for ordering required project resources.

Streamline Technology
In many cases, it has been identified that the overall project cost increases either due to implementation of unnecessary technologies within the project or due to lack of technical up gradation in the project. With the help of cost management, one can easily determine the necessity of technology and accordingly implement it for project completion. This helps the project manager to utilize the saved cost for other beneficial tasks.

Thrift
Thrift basically explains the quality of saving money and utilizing it for other business purposes. Project cost control management enables the project manager to reduce the cost on each task and apply it on other useful tasks. Utilization of saved money due to project cost control directly helps the company to meet its fiscal year’s goal.

Project-Cost-management- Bidkon

Cost management is considered as the key factor behind the success of any project. Before beginning any project, the first question that arises is “the cost of project”. Engineers consider project cost management as the series of activities, which leads to estimate, allocate, and control the overall costs of the project. Project cost control management […]

Read More »

5 Different types of Cost Estimation Models

Cost management is the most critical portion of managing any project and any change in cost estimation directly impacts on the project schedule and scope. The accurate practice of project cost control is very important in any project in order to successfully attain the project goal. Advancement in technology has made a mind-set of stakeholders to complete the entire project within tight schedules and low project cost. There are a number of challenges that occur while practicing project cost control in any project.

Following are the top five challenges that comes across for effective cost controls:

Controlling Scope Variation

For any project, a budget is prepared beforehand and it is very common to have an inevitable variation in the scope, which leads to variation in the budget. In this scenario, it is very important for the project manager to control the changes in scope. It can be identified that only controlling the variation in scope would help the project manager to make the budget manageable. Therefore, controlling this variation in cost is due to scope variation, which is very difficult and is one of the major challenges faced for effective cost controls.

Accurate Cost Analysis

Every project requires appropriate analysis of costs for the resources within the project. Project professionals are frustrated due to the difficulty they face in managing and maintaining cost accounting for the project. It is very important for the project professionals to implement effective cost analytical tools in order to monitor the cash flow within the project. Hiring an appropriate accountant for cost analysis is the common challenge that project professionals come across while attaining the required target.

Integrating Schedule and Cost

Aligning the schedule and budget of the project is another difficult task that project professionals come across in cost control management. In every project, managers of Controlling and monitoring activities and managers for managing cost codes, fiscal periods, and transactions are typically different. Managers responsible for managing WBS (Work Breakdown Structure) and task activities are least aware about the cost analysts who monitors the flow of cash for each activity and so, it becomes very difficult for the cost analysts or accountants to control costs for each task. Therefore, it accounts as a major challenge for project managers to control cost.

Accurate Reporting

In every project, customers are involved in the project where customers might include stakeholders, the IT business unit, funding authorities, and many more. These customers demand regularly for accurate reports for each activity in order to check its proceedings. Sometimes, it becomes very difficult for a project manager to provide error free reports of all departments associated with the project to its customers.

Adapting Advanced Technology

There are numerous advancement in project cost management but only an appropriate usage of this technology can lead in attaining the project’s goal. Despite all major advancements in technology, project managers are afraid of adapting it correctly. This is also a common challenge to cost control management faced by many project professionals.

Cost management is the most critical portion of managing any project and any change in cost estimation directly impacts on the project schedule and scope. The accurate practice of project cost control is very important in any project in order to successfully attain the project goal. Advancement in technology has made a mind-set of stakeholders to complete the entire project within tight schedules and low project cost. There are a number of challenges that occur while practicing project cost control in any project.

Cost Estimation Models

Cost management is the most critical portion of managing any project and any change in cost estimation directly impacts on the project schedule and scope. The accurate practice of project cost control is very important in any project in order to successfully attain the project goal. Advancement in technology has made a mind-set of stakeholders […]

Read More »