Communications Management during Project Planning
Communications planning involves identifying the information and communication needs of the stakeholders. This includes determining what needs to be communicated, to whom, when, with what method and how frequently. This is a very proactive approach. The PMBOK guide often suggests work to be done in a more structured way than many project managers previously thought…
Bidding as an Essential Skill for Project Managers
Bidding is an essential and vital aspect of project management. Not only do the organizations and the project managers have to engage with the prospective clients by specifying at what rates they would undertake the project but also would need to be aware of how much their competitors are bidding though they might not have…
Behavioural Models for Project Managers
There are several models of behaviour that the project manager can draw upon in his or her work. These include Maslow’s need hierarchy theory, Herzberg’s Hygiene theory and McGregor’s theory X and theory Y as applied to project management. All these behavioural models point to the ability of the project manager to motivate the people…
The following are the costs associated with the projects.
Any costs that are directly attributable to the work on the project. These can include the salaries paid to the resources, the billing rate of the resources and costs of the software and hardware that are used for building the website
These costs are spread out against many projects and cannot be linked to one project alone. These costs include those incurred in shared services like cost of office space, taxes paid by the organization and other services like secretarial and janitorial staff
Costs that change in proportion to the amount of time and material that are spent on produced in the project.
Costs that do not change with the timeline or progress of the project.
A cost be either Fixed or Variable; Direct or Indirect
The overhead costs for this project are the office setup and shared services. While the costs incurred in setting up the office space can be general overhead cost as it is a one-time cost and is borne by all the projects in the organization.
The project overhead costs are the costs incurred in the shared services such as secretarial staff and other services provide to the project and can be directly billable as such.
A time phased budget would include the costs incurred at each interval or milestone of the project. The milestones for this project would be requirements, design, coding, testing and implementation. The budget for the same would be the costs at each stage of the project.
The Budget at Completion or BAC should have all the components of the costs included like direct and indirect costs, fixed and variable costs etc along with the cost at each phase or milestone of the project.
The cost variance should be measured using Earned Value technique and this tool allows the manager to assess the completion of the project at each milestone according to the cost incurred and the value accrued till then. Variance between these two measures gives an accurate estimate of the health of the project.
The cumulative costs of the project are the ones that are incurred up to a specific phase or milestone of the project. It can be measured by using a Cost Performance Index or CPI which measures the ratio of the Earned value with regards to the Actual cost incurred on the project. As outlined above, all the costs that accumulate up to a particular phase can be called the cumulative costs of the project.
The cost management plan should include the plan for controlling the costs of the project. There should be a measurement of the costs involved and their variances tracked, if any. Any variance to the budget must be controlled by the controlling the impact of the cost changes.
Further, cost control can be done in the area of overhead costs and general and administrative expenses.
Article Written by
Himanshu Juneja, the founder of Management Study Guide (MSG), is a commerce graduate from Delhi University and an MBA holder from the esteemed Institute of Management Technology (IMT). He has always been someone deeply rooted in academic excellence and driven by a relentless desire to create value. Recently, he was honored with the “Most Aspiring Entrepreneur and Management Coach of 2025 (Blindwink Awards 2025)” award, a testament to his hard work, vision, and the value MSG continues to deliver to the global community.
Article Written by
Himanshu Juneja, the founder of Management Study Guide (MSG), is a commerce graduate from Delhi University and an MBA holder from the esteemed Institute of Management Technology (IMT). He has always been someone deeply rooted in academic excellence and driven by a relentless desire to create value. Recently, he was honored with the “Most Aspiring Entrepreneur and Management Coach of 2025 (Blindwink Awards 2025)” award, a testament to his hard work, vision, and the value MSG continues to deliver to the global community.
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