"Minimum" for Project Cost Management

Success Problem

PM ask themselves about ‘the minimum’ for any given project management process – as if the rest of the process is somehow superfluous and anyone who does those extra bits is wasting effort. Ultimately, if stakeholders are happy and the work is progressing and under control, then I’m winning!

Impact

Recommendation

The project cost management is a big topic and would like to share some best practice I would consider ‘winning’ at managing the project’s financials. What would the minimum be? The key things are: • Agree a contingency budget with Project Sponsor. Match the amount to the risk level of your project. Let people know that you have a contingency budget but manage it carefully. • Estimate accurately as a team; use relevant estimating techniques with the project team. Tailor your estimating approach to the project and ensure that the team knows how to use the techniques. • Set up good cost governance with the project team and apply the same strict rules to the way you handle the budget. • Create a financial baseline. Set the baseline and then expect changes to the approved budget as the project evolves. Manage changes carefully and learn from how the budget devolves from the baseline. • Work with suppliers in the same creative , collaborative way that you do with your in-house project team. Trust, but verify.

Category

• Cost & Finance