If you have children you may notice that some of them are better at managing their money than others. One child, perhaps, is never short of money and has good financial discipline, whereas no matter how much another works, they are always short. The difference between the two is most probably a matter of cost control. In project management you must ensure that your project has good cost control. Even if it feels as though cost control does not matter, it does, and your career depends on maintaining good cost control in your project.
Project cost control depends on your knowing four things:
There is a surprising number of projects, especially in the public sector, where the project manager does not have a grasp of these things. The questions you need to answer are whether the project is and will be on track in terms of cost, and if not, how big the problem is and what can be done about it.
Figure 7.4 shows the inputs, tools and techniques, and outputs for the project cost control process. Note that project cost control is part of integrated change control. The cost management process is one of the most mechanistic in project management, and the routine part, answering the question 'Are we on track for costs?', should be a reliable but simple and mechanistic process. Your skill and effort should be reserved for identifying cost problems on the horizon of the project, and for identifying options to deal with problems.
Figure 7.4. The cost control process
The key questions that this process is answering are: (1) Are we on track in terms of cost, now? (2) Are we likely to be in the future? (3) If not, what can we do about it and how big is the risk? Although there are a large number of inputs and outputs in this process, they are easy to understand in the context of these three big questions, and producing the outputs should, once the process is set up, be simply a matter of 'cranking the handle'. Adapted from PMBOK Guide (p.171)
The most important thing with cost problems as a project manager is to let the sponsor know as soon as possible. If you hide problems, including cost problems, they don't go away, they get worse.
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