Project Management

Cost Management – Cost management involves managing the overall cost of the project. It involves establishing the budget prior to commencing the project and subsequently managing the cost as the project progresses. The budget is fixed at the beginning of the project and remains the same throughout the project. The budget will classify and itemize the planned expenses for the project. The budget has to be detailed enough to cover all potential expenses to ensure no unforeseen expenses. The more detailed the budget, the better the cost management. Monitoring costs is next step to account for all expenses. Again, there are two main parts to cost management, one is the cost expended and the other is the cost to complete; the cost to complete is cost committed (purchases or sub-contracts committed) as well as cost of outstanding items to complete the project.

Scheduling – Schedule Management is about planning activities or tasks for the project. The sequencing and connections between one activity to another is important because many of the activities are connected and sequential, although some are in parallel. In planning, schedules are developed using the Critical Path Analysis (CPM) where activities are organized and connected to each other with one start point and one end point. The longest path of the CPM is the Critical Path. Delays in the Critical Path can result in delay of the entire project. The two common methods for applying CPM is the Arrow Diagram and the Pert Chart, both gives the same results in terms of schedule management. In most cases, the schedules are developed using computer software with programs such as Primavera or Microsoft Projects.

Progress Reporting – In order to successfully track project progress, the progress is reported on a regular basis. There are certain parameters of a project that can detect possible delays or cost overruns. Cost delays are measured by adding the ‘cost expended’ plus ‘cost to complete’ in comparison to the budget; if the ‘expended cost’ plus ‘cost to complete’ is greater than the budget, there will be a cost overrun for the project. It is important to review the ‘cost expended’ as well as the ‘cost to complete’ to see if adjustments need to be made to bring down the expenses. The budget of the project cannot be adjusted since it is the reference point and will used on all progress reporting. When the entire project is completed, a final report is prepared to show the status of expensed incurred versus the budget. A good Project Manager should be able to manage project cost below a 10% overrun and a minimal schedule delay.