5 Tailoring Considerations For Project Cost Management

5 Tailoring Considerations For Project Cost Management


In my last article, I have talked about some of the facts that you need to know about project cost management for projects. In this article, I want to talk about some of the significant tailoring considerations for project cost management. Follow me as we look at that together in this article.

tailoring considerations for project cost management


The considerations…


#1 Knowledge management

First and foremost, there are some questions that needed to be asked. Some of these include: Does the organisation have formal knowledge management and financial database repository that a project manager is required to use and that is readily accessible? That means you have to consider whether the company have a database that the organisation can use to determine the price of goods and services in the organisation. 


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#2 Estimating and budgeting

You also need to ask whether the organisation have existing formal and informal cost estimating and budgeting-related policies, procedures and guidelines. Some organisation might not even have templates that project managers can follow when it comes to pricing for project materials. The project manager needs to come up with templates that are acceptable to stakeholders for material pricing. 


#3 Earned Value Management

As a project manager, you should be more concerned about earned value management. You have to consider measures and tools that the organisation have put in place in order to discover what is happening as far as your cost and your schedule is concerned. You will not want to get to the end of the project before you discover that the money will not be enough to finish the project. You should be able to recommend measures that will allow you and your stakeholders to decide on the health of the project. 


#4 Use of Agile approach

You need to also ask whether the organisation make use of agile methodologies in managing projects? You have to know that impact your costing? You have to know how that will affect how the overall cost is being estimated from the beginning to the end of the project. 


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#5 Governance

Does the organisation have a formal or informal audit and governance policies, procedures and guidelines? It is your duty to advise the management on the best way to come up with policies that will guide the organisation in their project handling. 


Consideration for the agile and adaptive environment…


Projects with high degree of uncertainty or those where the scope is not yet fully defined may not benefit from detailed cost calculations due to frequent changes. Instead, lightweight estimation methods can be used to generate a fast high-level forecast of project labour costs, which can then be easily adjusted as changes arise. 


Detailed estimates are reserved for short-term planning horizons in a just-in-time fashion.

In cases where high-variability projects are also subject to strict budgets, the scope and schedule are more often adjusted to stay within cost constraints.


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Adeniyi Salau

Adeniyi Salau Scrum Master Certified , CCNA R&S , BeingCert and Scrum Certified Digital Marketing Professional, CEP, MOS, MCP, CSCU (Project 2016), Microsoft Certified Security and Networking Associate is a Google and Beingcert Certified Digital Marketer, Project Manager and SEO Expert of repute with about a decade of Blogging and online marketing experience. He is always ready to share his experience with others.

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