The role of cost estimating in project management The role of cost estimating in project management 28thDecember Any project, however big or small, or regardless of the industry that is undertaken, needs to be performed and delivered under certain constraints. Cost is one of those constraints that project management needs to effectively control. Cost can be the driving force or an impeding factor in determining the future of a project. Therefore, one can easily spot the need for applying thorough cost estimating processes and techniques to ensure that a project can be viable What are the areas of focus and the output of cost estimating that make it so essential in the project management process?
The Role of Cost Management: When considering alternative uses of resources, how do managers measure the expected effects of each of these alternatives? What is meant by "leading change," and how do cost managers do that?
Learning Objectives - This chapter has four learning objectives. The chapter explains how cost management helps organizations to reach their goals.
It presents, at an introductory level, the meaning and uses of benchmarking and cost - benefit analysis. Chapter I describes how managers look at different uses of resources to assess their impact on performance.
The chapter introduces ways to effectively implement and manage change in an organization. Cost managers are members of the management team who have responsibility for managing the financial resources.
The chief financial officer CFO is the top cost manager. This person usually has an educational background in accounting or finance and may be certified as a certified public accountant CPAcertified financial manager CFMor certified management accountant CMA.
Cost managers reporting to the CFO may have training as accountants, finance, engineering, or non-business disciplines. Since a cost manager has a role that extends far beyond that of a cost accountant, the skill set possessed by a cost manager is broad.
Cost managers should possess a cost management attitude.
They should be vigilant in their pursuit of cost control but not at the expense of product quality or customer needs. They need to possess high ethical standards.
Cost management is enhanced by a team approach. There are three types of teams that one might observe in an organization.
A jazz combo is the type of team where each member has a primary position but works in concert with the other members. These are small teams, and they must work harmoniously together.
An orchestra is a larger team. This type of team must play in unison. A baseball team is also a larger team. However, each player has a specific role, and performs as necessary.
Each individual must be strong in his or her own area of expertise. There are four aspects of team decision making that should be considered when trying to decide what type of team to use to solve a particular problem, The nature of the decision to be made The information needed The likely team conflicts and conflicts from outside of the team The pros and cons of team decision making Good cost management arises when managers view it as a philosophy.
Cost managers must have a proactive attitude and must possess or acquire a set of reliable techniques to help them to implement and manage change in their organization. There are eight very broad management decisions to be made in the arena of cost management.
The scale of the organization and the scope of operations must be determined.
The use of resources must be planned and organized in a way that maximizes the efficiency of operations. Plans and organizational change must be implemented. Results must be measured and reported Individuals and sub-units in the organization must be motivated and then evaluated.
Plans and results must be communicated to appropriate individuals and subunits. Decision making and improvement initiatives must be evaluated.
Chapter I presents the first four of the broad management decisions listed above. Each is described in more detail below.The Role of Management Accounting The role of management accounting is also described as problem solving.
Cost Management Cost management is an activity of managers related to . Video: The Role of Cost Accounting in Management Accounting can be generally defined as 'showing where the money came from and where it went.' Cost accounting, however, is much more data driven.
High-cost case management—also called large case management, medical case management, catastrophic case management, or individual benefits management—focuses on the relatively few beneficiaries in any group who have generated or are likely to generate very high expenditures.
This small percentage of individuals—perhaps 1 to 7 percent of a. Cost management is the process of planning and controlling the budget of a business. Cost management is a form of management accounting that allows a business to predict impending expenditures to help reduce the chance of going over budget.
Many businesses employ cost management plans for specific. Video: The Role of Cost Accounting in Management Accounting can be generally defined as 'showing where the money came from and where it went.' Cost accounting, however, is much more data driven.
The Role of Cost Management: Finding Opportunity and Leading Change. Chapter 1. Chapter Outline. Cost Management Challenges - There are three questions addressed in this chapter.