In addition to Quality and Schedule, adherence to a Budget is a fundamental measure of how well a project is performing. In fact, these three things together are often referred to as the “triple constraint” or “golden triangle” of project management: good, fast and cheap. Someone—often the customer, sponsor, or upper management—has agreed to commit financial resources to allow the project to proceed. The project manager is tasked with allocating and spending this pot of money in a way that allows the creation of the product to occur efficiently and in the proper sequence. If you overspend this budget before you finish, the project is typically viewed as a failure. The PMs job is to ensure this doesn’t happen.
In a more formal sense, Cost Management is the process of:
- Defining and documenting how much your project is going to cost. This is typically done in the form of a budget.
- Actively tracking, measuring, and controlling changes to the budget as the project progresses.
The following are links to specific posts and pages on this all-important topic of Cost Management:
- [Coming Soon]