Abstract — Many projects in the world have suffered from cost overruns due to poor performance during the design and execution stages. A key role in the successful completion of the work is the efficient utilization of materials, labors, plants & machinery and overheads. So most of the project managers and contractors find difficulty in controlling project costs due to problems which include delays by clients to release money, lack of materials and equipment etc. This project deals with a certain technique to control costs by analyzing the actual value and planed value of the project and find the suitable means to improve it. This study identifies the solution for the cost management problems in construction.
2.3.3 Project Cost Management Project cost management ensures that the project is completed within approved budget. It includes processes involved in planning, estimating, budgeting, financing, funding, managing and controlling costs. The scope defined at the early stages of the project greatly influence the project cost. Thus, scope definition is critical for proper cost estimation. On some smaller projects, cost estimating and cost budgeting are closely linked and can be viewed as a single process that could be performed over short span of time.
Actually, as a cost engineer, I had to collate all the project team’s forecasting information for their cost codes. This forecasting includes the costs that they estimate were needed for each cost code to be done, by the end of the project. Normally, monthly meetings were held before closing the month end’s financial position. However, the problem was that all that meeting was held in rush without having enough time to concentrate on the project’s issues and found the solutions. Impact: In the monthly meeting, we only had time to go through the backup data that the project’s team had prepared to support their forecasts.
Through planning the project, the project manager may discover that the project background is not consistent with the reality. In this case, the project manager must redefine the project background. So, there is a feedback between initiating the project and planning the project. Each phase includes a set of activities to achieve it. Fig 2: Project life cycle  The performance of project managers can be easily measured for a specific SPM knowledge area because each area includes a set of activities and skills related to a specific SPM competency.
Project Cost estimation 4. Project Quality and 5. Project Risk Management These requirements are then converted to the Work Breakdown Structure, tasks list, Gannts charts, resource assignment and risk register, etc. After a project charter document which once gets approved, acts as a green signal for the project to be initiated. Based on the project charter document and the project requirement document, a project plan is formulated.
This is where the company accepts the final project. An evaluation will be needed in order to highlight if the project was a success or failure (Project Insight, n.d.). If the project was unsuccessful, there will need to be information given about why it failed so that errors will not occur during the next project. As noted above, there are many different parts of project management. The scale, significance, and complexity of a project need to be considered when doing project management in order to determine how the project will be handled and what the development of the end product will be.
The model in this paper suggests the handling of the correlation issue by modeling the uncertainty and indicators which affect cost items. Introduction Project managers use cost analysis in order to make estimates about the cost of the projects. The difficulty in this type of analysis is that, when a project becomes complex, there are a lot of items that affects the cost. Cost analysis also includes cost uncertainty analysis which helps decision makers to understand not only the potential investment risk but also the nature of risks for a particular project and help to understand possible measure to mitigate such risks. The trouble in project cost uncertainty is that the interdependency between the cost items or the effect of cost changes of one cost item to another is rarely considered.
Staff should be ready to meet challenges, to explore new things, to study competitors, to achieve very important goals for the company. Corporate planning always provides all employees with time, which should be taken into account during tasks’ performing. Now about the model itself. What is budgeting and why it is needed running business? The budget is kind of plan that predicts future financial condition of the company.
First, the project managers have to develop project charter. It is a one-web page record is street map in order to manual the complete assignment and is the settlement with all of the task’s stakeholders. Second, they needs to develop preliminary project scope statement. On this technique, the project manager identifies what is going to and what is not going to be part of the project. Third, they need to develop the project management plan.
While a project manager might look at the project costs for anyone, it is often inappropriate to allow a project manager to view the actual pay rates for every employee. Therefore, the system must work across the database and structural requirements of the institution as a whole and different people should be given different access of what is relevant to