Cost Management

Mastering Budget Control in Project Cost Management

Control Costs is a critical process in project cost management. It involves monitoring the project status to update project costs and manage changes to the cost baseline. The main advantage of this process is the ability to maintain the cost baseline throughout the project, ensuring that expenditures do not exceed the authorized funding.

The Control Costs process includes inputs, tools and techniques, and outputs. Inputs include the project management plan, project funding requirements, and work performance data. Tools and techniques include earned value management, to-complete performance index, and variance analysis. Outputs include work performance information, cost forecasts, and change requests.

Monitoring the expenditure of funds is a crucial aspect of the Control Costs process. This monitoring should be related to the value of work being accomplished, not just tracking the outflow of funds. Cost control involves analyzing the relationship between the consumption of project funds and the work being accomplished.

Any increase to the authorized budget can only be approved through the Perform Integrated Change Control process. This process ensures that all change requests are addressed promptly and that unapproved changes are not included in the reported cost or resource usage.

Project cost control involves influencing factors that cause changes to the authorized cost baseline and managing actual changes as they occur. It also involves monitoring cost performance to understand variances from the approved cost baseline and monitoring work performance against funds expended.

Informing appropriate stakeholders of all approved changes and associated costs is a part of project cost control. This process also involves bringing expected cost overruns within acceptable limits.

The Control Costs process is carried out throughout the duration of the project, ensuring that cost expenditures do not exceed the authorized funding by period, by Work Breakdown Structure (WBS) component, by activity, and in total for the project.