Project Cost Management

Project Cost Management

Abstract

The study evaluated the needs of various elements in the project cost management knowledge area in projects. IT project management knowledge are involved the application of technology and models to control the budget or financial resources allocated for the completion of a certain project. The study also investigates the potential implications that help project managers to understand the IT project management knowledge areas that are effective in the schemes’ administrations. The need for IT project management knowledge area to improve the processing groups at various levels of the project was also a need and purpose evaluation for this study. Three cost management processing groups were found effective in this knowledge area. The cost budget processing group, the cost control processing group, and the cost estimation processing group. Also, technology adoption was found to be one of the best ways of improving the scheduling of tasks and activities for the appropriateness of cost project completion. The cost of project management can be improved in the future based on the technology and accountability models that ensure project goals are executable within the budget, resources, and time allocated.

Keywords: Project, resources, management, knowledge area, IT, evaluation, cost, budget, estimation, and processing groups.

 

Introduction and Purpose of This Study

The Need for This IT Project Management Knowledge Area

Information Technology (IT) is a necessity in the current world industrial revolution and management. It is one of the current emerging issues that help in management and project operations. Technology helps industries, organizations, institutions, and individuals to provide the essentials in project management especially in controlling resource wastage. Corporations use IT resources to manage project costs and ensure the execution of the goals and objectives within the set budget. There are different technologies and models that firms apply in project management in various ways to ensure proper financial administration and accountability at every level (Karaman & Kurt, 2015). IT project management knowledge is required in every organizational department to help project managers integrate decisions appropriately. IT knowledge creates competitive advantages on deliverables of projects that assist organizations to acquire the influence of new marketability. Project managers use IT knowledge to reduce potential expenditures or unnecessary costs (Karaman & Kurt, 2015). Firms use IT project knowledge to plan for financial resources and accounting procedure in project operations, which maximizes the gains and reduce losses to ensure the entire project running use the lowest expenditure possible.

Flowchart 1: It Project Management Process

The Importance of This Knowledge Area

IT project management knowledge area is important to organizations in various ways. Information Technology project management skills area assist project managers in the decision-making process and execution. It allows the integration of tasks and activities to ensure the timely delivery of the project milestones. It also offers faster deliverables for every project milestone based on customized specifications such as timesheets and Work Breakdown Structure (WBS) (Shaqour, 2022). IT project management knowledge area is designed to support the complete project life circle based on the agile project management system.  In manufacturing projects, IT knowledge reduces lead time improves or ensures the quality of deliverables as well as influences perfect processing. In construction projects, IT project management knowledge areas help managers to develop schedules, manage teams, and ensure products are delivered under a set budget. In the It project management process, the scheduling of teams and tasks are streamlined to avoid confusion or repletion of activities that may cause damages such as financial risks. In project planning IT project management knowledge areas are important for improving professional services such as tracking projects, managing resources, and planning for the entire project (Krishnakumar & Kumar, 2022). The professional services require IT project management skills areas to reduce or eliminate potential dummies, risks, or project failures due to poor planning and errors.

The Purpose of This Study

            The purpose of this study is to evaluate the impact of IT project management knowledge areas in various projects. The project management process requires IT to have good implications for customers as the study focuses to investigate them. In the same case, the study will evaluate if the project management process requires IT knowledge to improve output quality. The project will investigate how the previous literature exposed IT project management knowledge areas in various project budgeting and timely executions. The study will influence the understanding of the weak areas in technology that require improvement to safeguard future project management (Krishnakumar & Kumar, 2022). Also, the research will investigate the gaps that exist between past research about the effects of IT knowledge on project management outcomes. The scheme will invigilate the various IT project management knowledge areas application and understand the future needs that may be required for better sustainable development in the future industrial revolution. The IT impacts on society and real-world operations will be part of the investigation based on the projects that humans run or determine to run in the future (Shaqour, 2022). Therefore, there is a wide range of investigations that the study is aiming to investigate for future development of the knowledge areas that can ease project management and ensure appropriate output or delivery.

Knowledge Area Content

The Implication of This Knowledge Area

The implication of the IT knowledge area in project management shows the impacts and outcomes of the process. The knowledge areas are core technical subjected to the matters concerned. The implications make project management necessary and effective in running the operations involved. The implications are set so that every phase of the knowledge area shows the effectiveness of the proper running of a project (Shamim, 2022). The knowledge area has integration project management as the factor that holds the project at different levels. Project integration management implicates the fundamental plans as the development of a project charter created during the primary initiation phase (Portny & Portny, 2022). This implication shows documentation designed for the project and assigns the management to projects. In this aspect of this area, the project management plan develops a roadmap for a successful end as an implication to the stakeholders (Shamim, 2022). It influences appropriate monitoring and tracking through changes that are accommodated during project progress.

Integrated Project Cost Management

The implication in this knowledge area involves project integration with directing and managing the project work. This aspect helps in monitoring, analyzing, and reporting the project progress as identified and controlled under any changes. It exposes any potential problems or changes that may occur in the process of running the project. There is a simplification of change control and approval of project closure at the end of a specific scheme based on the knowledge area (Shamim, 2022). Therefore, as an implication, it helps the project managers to track and make potential changes in the project without changes as benefits of the knowledge in this area.

Appropriate Project Time Management

Also, there is a project management area implication that involves appropriate project management. Project time management acquires more time and consumes most of the time as resources. It helps in dividing tasks that are scheduled with start deadlines and dates. It provides a budget for every task or activity which implicates the scheduling of work to avoid confusion or repetition (Portny & Portny, 2022). There is constant change over every phase and this knowledge are help in revising the process and making things often normal or on the right track towards the finishing of the project. The implication of the plan schedule management of the project depends on the defining activities based on the making WBS. Technology in project management helps in making the knowledge area in creating tasks that touch the aspects of the project (Shamim, 2022). Management strategies and tools based on technology assist project managers to have a suitable alignment between time and tasks involved in certain projects.

Efficient Project Cost Management

Also, sufficient project cost management is another implication of the knowledge area and its application in project administration to ensure the execution of the deliverables is according to the requirements. This implication ensures that planning of cost management in a project can be determined by establishing a good method of budgeting. This includes how it will change the procedures that managers apply to control the entire project (Portny & Portny, 2022). In that case, this knowledge area will allow the estimation of project costs and reduce the waste of resources based on the applied equipment needed to complete the task.

IT project management knowledge is useful in cost project management because it ensures accuracy and attaining the goals require appropriately as planned. This is a good implication that indicates that the knowledge area is useful in IT cost project management. The IT project management knowledge area uses templates for excel and spreadsheets to ensure the cost of labor, materials, equipment, and other resources are well maintained (Portny & Portny, 2022). The project managers use the IT knowledge area to ensure that the project runs according to the budget without affecting the quality. The IT project management knowledge area determines the needs that project managers may apply in developing value analysis to perform regular cost management in line with the actual set expenditure of a project (Shamim, 2022). Therefore, project cost management is an area of knowledge that will ensure the project executes accurately.

Project Management Process Groups in This Area

            The project management process groups in cost project management are integrated to ensure appropriate results in terms of quality and efficiency. This area of project management is more crucial in terms of the project management process. The project management process area includes a resource planning group, a cost estimation process group, a cost budget process group, and cost control (Portny & Portny, 2022). These groups in the cost project management area will apply technology to acquire the appropriate deliverables s desired in the outcome.

Resources Planning Process Group

            The resources planning group is a requirement in the project management process that supports the potential projection of the project requirements. The resources planning group involves management in place of allocation, a place to plan, and a schedule of the required resources for all the project stages (Arefazar et al., 2022). The group is responsible for the specification of the cost associated with each of these required resources for successful project execution based on the costs. Also, the group is responsible for the complexity process analysis of this project and evaluating the work breakdown cost that helps in simplifying and providing the planning clarity in terms of costs (Shamim, 2022). The resource planning group uses resource management software to identify the required resources to complete the entire project. This group based the required requirements against the WBS stages to determine the associated cost. The resource planning group in the cost project management knowledge area should perform a cost-benefit analysis (Arefazar et al., 2022). Notably, this group is responsible for planning the cost of each WBS stage and integrating the expenditure for the required cost to execute ten entire projects.

 Cost Estimation Process Group

            The cost estimation process group has roles in approximating the costs associated with each of the resources needed for every specific scheduled activity. It is an important part of the project cost management process that supports the decision-making life cycle to avoid under or overestimation of the project (Shamim, 2022). Cost estimating forecast requires financial resources to complete the project within the defined scope. The group should focus on estimating the throughout the project life given that the scope tends to shift and require continuous cost estimation due to potential changes that occur. The project managers are quired to ensure effective cost management to keep maintain the changes in budgetary in the entire project’s lifespan. The estimation sums up the cost involved in the success of completing a project (Arefazar et al., 2022). Parametric modeling, bottom-up estimating, and analogous estimating can be applied in the cost estimation project management process for efficiency purposes.

Cost Budget Process Group

            The cost budget process group in this project management area helps the project managers to work out the basic costs. The group is also responsible for estimating any additional cost that may be required in the budget as a contingent plan for the project. It is overall set as the decision-makers for the entire project budget. In this case, project managers help the group to make significant key decisions according to the schedule and resource allocation constraints within the project budget (Shamim, 2022). This budget should account for every activity involved in the project starting from the direct labor cost, factory material costs, administrative expenditures, equipment costs, and software costs. The cost budget group should consider various techniques to ensure an efficient budget in the cost estimations (Arefazar et al., 2022). Cost aggregation, historical data, reserve analysis, and funding limit reconciliation to acquire all the necessities for the project’s financial support and management.

Cost Control Process Group

            The knowledge area requires the cost control process group to understand good project cost potential needs and scope creep. The group should remain constant in eyeing the cost to ensure it meets the project needs against budgetary constraints. The cost control group involves informing the stakeholders of cost discrepancies and influencing how they can vary from the budget cost (Shamim, 2022). The group is responsible for controlling and maintaining the project’s original budget. It should also control the approved and actual costs. The group should also control the forecasted costs and committed costs for the project to operate within the scope and budget constraints (Arefazar et al., 2022). Therefore, the purpose of the cost control process group in this area of project management is to effectively control project cost, be aware of and work up on changes or issues that may occur in the process of the project running.

Group	Function
Cist Budget	Control the entire project budget for allocated resources
Cost Estimation	Estimate the budget and predict the potential changes that may require contingent action
Cost Control	Control the costs of the resources within the scope and oversee the scope needs

Table 1: The group process in project cost management

Technology Adoption and Possible Risk Issues

Projects can adopt different technology in the area of project cost management that helps the managers to attain efficiency and quality in the executing process of the deliverables. Some software such as MS Project and MS Excel is useful in workflow management in terms of Workfront connection and production of automated WBS or charts. The software involves technology that helps project managers to customize strategies for delivering the specification of the customer agreements. The MS project schedules the tasks and activities and determines when the project can end or may require more time at a reduced cost or without affecting the budget. It provides real-time reports to the stakeholders with visuals that are integrated into the applications to ensure efficiency in the process or progress. The project managers should have technology including MS Project and MS excel to simplify workflow management from start to finish. The project workflow should have standardized status sheets and project plan templates. The adopted technology for workflow management should include multiple applications that integrate teams into IT and HR with more visibility of the project’s progress. This technology eases collaboration of the schedule and activities online and minimizes time consumption. 

Business Applications of This Knowledge Area

            The project cost management knowledge area in the business world is wide. Business cases require project cost management based on technology to ensure real-time visibility that develops a business model that monitors any potential change required in a project’s progress. Project cost management can be applied in developing a suitable collaborative online business model that supports agile practice with more project management approaches. The area provides knowledge on how business administration can develop an integrated cost control system calendar with other business application that supports auto-populated activities involved in the business world. The economic of using this knowledge area of project management in business is to ensure it provides reports and cost control from a specific dashboard that helps in planning for the scope and eases the potential challenges management (Shamim, 2022). Therefore, this knowledge area creates full support intake and delivery of project goals.

Evaluation of This Knowledge Area

The Capability of This Knowledge Area

            The project cost management knowledge area is capable of developing automated scheduling, activity organization, and task allocation for the project managers. This knowledge area is capable of assisting project managers in decision-making processes that support efficient outcomes. Also, this knowledge supports planning and contingent planning that indicates the potential assist of ensuring project continuity in case of any risk or threat occurrence. It also helps the project to run under a constrained budget and ensure deliverable quality or deadline is not affected (Shamim, 2022). The costs are controlled and reduce any potential loss or waste of resources allocated to complete the project.

Possible Drawbacks of This Knowledge Area

            The challenges are still existing in various knowledge areas of the project and its planning. The elements that the area projects may require more costs than expected during planning. The project may fail in griping the scope and lose track of costs hence making the groups face more challenges. The entire project may be at risk due to a lack of technical accuracy in cost management (Shamim, 2022). Also, in the schedule aspect, the project may have inaccuracy and fail the integration of the cost. Communication among the operating groups may be difficult and integrating financial analysis may also be challenging and affect the costs (Shaqour, 2022). Delivery may be difficult due to the scope changes that may affect the costs of the entire project management.

Future Development of This Knowledge Area

            The knowledge area of this IT project management will require some adjustments in the future to ensure the technology fits the dynamic requirements and emerging issues of customers’ demands. The future cost project management knowledge area may require more implemented AI to improve the automation of cost scheduling and planning (Shaqour, 2022). This knowledge area requires more research for developing software that can reduce potential project risks and threats vulnerability. 

Conclusion

            Conclusively, cost project management is a knowledge area in project management that improves the control of financial resources in a project. The cost project management requires technology to improve the workflow and ease the potential needs to ensure good development. The influence of technology on the cost of project management ensures that the project managers execute the project goals suitably. In that case, cost project management in IT projects ensures all resources are availed at the required cost. Project managers use the cost project management knowledge area to control, estimate, and maintain the budget using the potential automated templates that influence the development of schedules accurately. The technology involved in controlling the project budget ensures the costs can predict and cover all the activities and tasks in the project planning. Different groups are involved in cost project management to develop appropriate cost analysis at every level of the project and manage the resources allocated properly. This aspect helps the project managers to build a suitable development on any possible change that occurs in the project management progress in terms of costs. Therefore, the cost of project management knowledge area is one of the project’s areas that apply technology to ensure positive implications of various levels of project schemes.
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