September 28 & 29, 2020 | Virtual
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In my case, while it depends on each organization process, along the years, PM is accountable for cost control not budged control. I meant, is not about to control the whole project finance. Just the cost component. Things like EVM are focused on cost. I have experienced different ways to control cost as project manager from access directly to finance control systems to take the cost to work with a person assigned from finance buisiness unit we called "budgeteer" that help me sendng the cost assigned to the project each month in a defined date. No matter the way there are interesting things to take under consideration (for example the limit date to receive invoices from multiple sources assigned to the project to be considered in the project costs). While I can give you multiple topics to take into consideration perhaps something that is critical to me: try to get a "budgeteer" that help you with costs. If not, try to push your providers to send the invoices to you in a defined date and with a clear reference of costs associated to each project, for example by using a project ID or something like that.
I completely agree with Sergio. From my own personal opinion, the larger the project, the less the PM is directly responsible for the overall project cost, and our role tends to be limited to the labor cost (time * wage).
In very large organizations, contracts can span multiple projects so the PM often doesn't have visibility or control of many costs. The data is often very limited for numerous reasons, such as we don't want it to become public knowledge what our costs are or others will want to renegotiate their own contracts. In that situation, the PM largely manages the number of people working and the duration of their involvement. The total cost may be better known at the director level.
In smaller projects, there are less moving parts, less risk to data exposure, and the PM may have a lot bigger role in managing the total project costs. In other cases, I've worked PD projects where we only have a market if the total costs fall below $X so the whole development effort involves managing a project that meets the performance requirements without exceeding the target cost.
If you need more knowledge on cost management, the question in my mind becomes whether you need more knowledge in cost modeling, or whether you need more knowledge in the many contributing cost sources in whatever domain you're working.
Interesting your question
Thanks for sharing
Basically I agree with Sergio and some suggestions from Keith
The Project Manager manages the costs and they have to be budgeted.
Some steps you can take:
1. Total cost control from the moment you take on the project (work with a person assigned from finance buisiness unit)
2. Revisit the schedule, the work actually done, the cost spent and the budget
3. Use EVM as a tool to take state of play and estimate future costs and simulate scenarios
4. Think of a set of measures that can be implemented
5. Meet with the project sponsor and key stakeholders to review the project situation and propose that these corrective measures be approved for implementation.
Sorry its taken me so long to reply. I have read your responses and I appreciate your feedback - particularly the advice on working closely with the finance department. To hone in a little further: I am wondering if anyone has experience in contributing to the preparation of an annual budget and developing forecasting requirements in order to meet financial objectives.
So, Sergio: in your case - a budget is established each year and you participate in decision-making around what projects are feasible from both a strategic and financial standpoint? Lets say that Leadership and you determine that you want to move forward with Project A and B for 2020. So, if Project A is allotted, hypothetically, 100k of the annual budget, and project B gets 70k, its your responsibility to determine the costs, labor and materials, etc and then monitor throughout the life of the project? Do you use historical perspective to estimate the costs? i.e. Project A is similar to the type of IT project we performed last year, and we know time and material cost us xx dollars? What techniques do you use to accomplish tracking the costs - simple excel spreadsheet, or a commercial PM tool? These are sort of the processes and procedures I've followed several years ago when I was responsible for cost control; just want to make sure I am on the right track. Sorry for so many questions!
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