MANAGEMENT

Project Cost Management

Project Cost Management

Literature Review

The concepts of design and project management associated with the need to change management. Project management is an integral part of the daily activities of managers at various levels. Many leaders of the need to use formal methods of project management associated with large projects. However, even in organizations focused on the production, implementation of projects is a significant part of the activities.

The use of formal project management methods allows for a more reasonable goal to determine the optimal schedule of investments and investment activities, to more fully consider the project risks, optimize use of available resources and to avoid conflict situations, to control the execution of the plan, to analyze the actual performance and to make timely correction in the course of work to accumulate, analyze and use in the future experience of completed projects. Thus, the project management system is an essential component of the entire system of management of the organization (Richman, 2002, pp. 156).

Relevance of the topic

The need to solve many problems posed by today's international community, led to the creation of large integrated systems. It is difficult to say whether the project management was developed as a result of the need of managers in management techniques such problems. However, it is undeniable that today's complex problems require the combined efforts of many sectors. Project management provides such an approach to solving complex problems.

In determining the need for project management, you can see some of the basic prerequisites. Every organization produces products or provides services or makes both. All organizations want to work in such a way that would have their goods or services were provided at the right time with minimal cost and would lead to the greatest possible satisfaction of the consumer (customer). Failure to achieve these goals lead to negative consequences for the organization. In the past few decades, fundamental changes in technology and global competition have become more apparent and tangible. Business has become more efficient and dynamic. The ability to successfully and the lowest possible cost to implement the projects (especially in new product development) enables the company to significantly increase their competitiveness (Schwalbe, 2000, pp. 113).

Project Cost Management

The management plan identifies the costs to follow recommendations to manage the differences in costs. The detail of the plan cost management depends on the needs of project stakeholders. The plan must specify procedures to follow if the actual project costs are above or below the approved budget for the project. Having a plan cost management, you no longer need, as a project manager, to invent a new course every time you see a cost difference in the implementation of project (Pinto, 2010, pp. 306).

Project cost management is associated with one of the three major limitations in the projects - at cost, timing and requirements for the subject area. Compliance with these limitations allows us to complete the project within the planned timeframe and budget, with full satisfaction of certain prior expectations of the customer ...