9 Amazing Ways Of Controlling Project Costs
In my previous article, I have talked about some of the ways of determining costs for projects. In this article, I want to talk about some of the ways of controlling project costs. Follow me as we look at that together in this article.
Control costs is the process of monitoring the status of the project costs and managing changes to the cost baseline. The key benefit of this process is that the cost baseline is maintained throughout the project. This process is performed throughout the project.
Also, updating the budget requires knowledge of the actual costs spent to date. Any increase to the authorized budget can only be approved through the Perform Integrated Change Control process. Monitoring the expenditure of fund without regard to the value of work being accomplished for such expenditures has little value to the project, other than to track the outflow of funds.
Most of the effort of cost control involves analysing the relationship between the consumption of project funds and the work being accomplished for such expenditures. The key to effective cost control is the management of approved cost baseline.
Project cost control includes:
#1 Influencing Change Factors
One of the means of controlling costs for projects is to influence all those factors that are leading to change for the project. You have to examine certain criteria that are making your project to drift and plan on how those factors can be controlled. Take, for example, you have a team member that always fail to meet up with the deadline. You can have him changed in order to have your project under control.
#2 Timely Changes Implementation
Another means of ensuring that changes are well managed is to make sure that approved changes are implemented on time. It is one thing to implement changes and it is another thing to make sure that such changes are managed and implemented so that it will have a positive effect on projects. You have to make sure that changes approved by the Change Control Board are implemented in a timely manner.
#3 As they occur
There is a need for you to also make sure that actual changes are implemented and managed as they occur. There is a need for organisations to do a root cause analysis of changes so as to be sure that it is the exact changes that were needed that were actually carried out. This will guarantee that project costs are controlled in a coordinated manner.
#4 Approved Limits
The Project Manager has to make sure that he is spending within the approved limits. He has to make that cost expenditures do not exceed the authorized funding by period, by WBS components, by activity and in the total for the project.
#5 Monitoring cost performance
There is a need for the Project to monitor cost performance so that he and his team members do not spend beyond the approved budget for the project. He has to make sure that before approved budgets are spent on project activities, he must have cross-checked that he is only spending within the limit of what is approved for the project.
#6 Monitoring work performance
One other task that you need to perform when trying to control cost for project is to monitor work performance against the cost that has been expended on the project. You need to compare the deliverables against what you have spent so far on the project. This will allow you to determine whether the organisation is actually getting value for the money spent on the project.
#7 Preventing Unapproved changes
There is a need for the project manager to also ensure that it is only approved changes that are executed. This will ensure that the project does not have a cost overrun and that stakeholders are carried along with all changes that are made on the project. It will also guarantee that the final deliverables of the project are accepted by project stakeholders.
#8 Informing stakeholders
Another step that a project manager needs to take when trying to control project costs is to always inform stakeholders about approved changes and their associated costs. This will allow stakeholders to closely monitor projects and advise the project manager and his team about project expenditure. It will also ensure that the project manager has all the needed that can help him to achieve project goals.
#9 Expected cost overruns
There is a need for the project manager to also ensure that expected cost overruns are brought within acceptable limits. The project manager needs to understand that he will account for how contingency funds and management reserves are used on the project. This will ensure that no funds were spent without stakeholders approval. it will also guarantee that the project manager continues to enjoy stakeholders support.
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