We all know that cost overrun is common in most IT projects due to various reasons. I wanted to be able to find out what are the common techniques for cost control . If there is some article on gannthead or other sites could someone send me an URL for the same please.
The first thing that came to my mind when I read your post was to use Earned Value Management.
Earned Value is an objective measure of how much work has been acomplished based on the Planned Value.....Earned Value improves on the "normally used" spend plan concept (budget versus actual incurred cost) by requiring the work in process to be quantified.
Using the earned value process, members of management can readily compare how much work has actually been completed against the amount of work planned to be accomplished. Earned Value requires the project manager to plan, budget and schedule the authorized work scope in a time-phased plan. The time phased plan is the incremental "planned value" culminating into a performance measurement baseline. As work is accomplished, it is "earned" using the same selected budget term. Earned Value compared with planned value provides a work accomplished against plan. A variance to the plan is noted as a schedule or cost deviation.
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Earned value is certainly useful, in particular in the development or build phase. What existing lifecycle gateways do you use? At what stage of the project do you do a commercial analysis/ feasibility and business case? What are the existing policies for delegations, assets and project accounting?
These items set the scene for the cost management approach needed. Of most important for any project controls approach (and especially earned value) is ensuring your work breakdown structure is related to tangible deliverables.
If you answer these items the the method of managing funding vs costs can be considered. Saving Changes...
Mark Price PerryBusiness Driven PMO Evangelist| BOT InternationalOrlando, Fl, United States
Dear Keith, nice post and replies by Bethany Schoenick and Christopher Prokop. In terms of common techniques for cost control, I would only add that more and more project organizations are realizing that low levels of project management maturity result in higher levels of project difficulties as measured by such things as cost, time, and quality. This might sound a bit airy-fairy or even preachy, but there is a big difference between having a methodology document (which all organizations have) and having useful and usable organizational project management processes and best practices scalable to project type and size (which few organizations have). Take cost overrun as an example. Usually, it is not procurement costs for things like hardware and software that are overrun, rather schedule related costs. Whether this is on account of PM skill in developing the schedule, inadequate scope management, poor requirements management, poor or non-existent risk management, project manager ability to manage the project effort, etc., at the end of the day these are all process defects. Those that perform "ad hoc" project management will likely experience more of these "process defects" and cost overruns than those that seek to truly setup, manage, and improve upon their PM processes and best practices. To quote Deming, "Fix the process, and you fix the problem." Methodology documents, tools, techniques, training, etc., are all part of the picture, but at the end of the day you either have an effective process or you don't. If organizations consistently have cost overruns, it is likely that management is a big part of the problem (and solution). You might say, "experience a cost overrun once, shame on the process; experience a cost overrun again, and again, and again, shame on management". Cheers. -- Mark Perry, VP of Customer Care, BOT International Saving Changes...
Anonymous
sir myself doing PG in CONSTRUCTION ENINEERING AND MANAGEMENT
my project is about analyzing the cost control technique for building construction
please give some idea to proceed the project Saving Changes...
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