Cost Estimation and Budgeting in Project Management

 You may be delivering a professional services project for a B2B customer or a new product development project. It might be an internal project to improve the productivity of a functional area through an automation tool.

Let us face it.

Irrespective of the nature of your project, businesses and their leaders are judged by their impact to the top line (revenue) and the bottom line (profit) Cost Estimation and Budgeting in Project Management turns out to be either your weakest link or the strongest one - to profitability.

What does Cost Estimation and Budgeting entail in Project Management?

The objective of Cost Estimation is to understand all the resources and the associated costs needed to deliver the project satisfactorily. Budgeting assigns a constraint in terms of the total amount that the project could spend. It is interesting to observe that Cost Estimation is performed by the project management team while the Budget is decided by the Project Sponsor or a Senior Manager.

The implication of Cost Estimation and Budgeting in Project Management varies with the type of project undertaken. Let us get a bit deeper with this.

On professional services projects or any external customer projects, teams want to ensure that their costs represent value for money for their customers. Customers realize that every penny saved is a penny earned! While it may be tempting to ‘go easy’ during estimations, remember that your competitors are not sitting and fiddling their thumbs! Your senior management and your teams need to review every hour of effort as well as every resource estimated. There are innumerable cases where companies have lost projects by a whisker! read more at https://www.productdossier.com/blog/details/0000000196

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