Cost and Scheduling Cost

Posted: October 17th, 2013

Cost and Scheduling Cost

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Cost and Scheduling Cost

            This is an important part in any business organization. A project manager should be able to come up with scheduling costs of the project at hand using estimates from the expenses that they might have incurred in the past or appropriate estimates. However, at times this estimation might not represent the true value of the whole project, and as a result, the work breakdown cost is more than they had anticipated. This will result in more costs being incurred. In such a scenario, the program manager has to act swiftly to ensure that the additional costs are not too high. He or she thus comes up with strategies that will counteract the whole process and hopefully not cost the company more money than necessary (Miller, 1963).

As a program manager, it is essential to be vigilant and once such a scenario takes place he or she should be able to offset what has happened. They should come up with a solution for the problem facing the organization. Primarily, the program manager assesses how much more the situation would cost the company. He or she tries to find the cause of the work breakdown structure not catered for by the costing data initially prepared. This is done to assess whether minor changes can be done to avoid the company incurring extra costs than necessary. By using scrutiny hopefully, they can easily solve the problem and not have to go into extreme measures.

If the problem is not easily solvable, the company should then seek other extreme measures. Since they have to go ahead with the project, they will do so while trying to find ways to cut costs. This can be done through research on strategies employed by other companies experiencing the same problem. Some inference questions include; what did a company, which was faced with the same problem, do? How did they arrive at a solution and how much did it cost them? Through the research, they can find out which methods will best work for them and which one will be the most cost effective. This way they will have solved their problem and at the same time save some money. This is important to a project manager, as it will mean they will have found a good way to avert a crisis and at the same time spend fewer resources.

It is important for the program manager to run through the project so that he or she knows how to avoid this problem in future. Going through what they had planned, will help the company realize what they failed to do, or what oversight they had on their part that resulted to the failure of their initial cost schedule. After they have found out what happened it would be easier not to repeat the same mistake. In future, they will be more vigilant and put into consideration all factors that might affect the project. They will have known what they should capitalize on so that they do not end up running losses.

The business world is dynamic. It is never stagnant thus; new methods of doing business are being invented everyday. It is mandatory that as a project manager one keeps abreast with the ever-changing scenarios in the business world. Just because something worked for a business previously, does not mean the same method will work in the future. It is good to put such factors into consideration every time a cost schedule is being prepared. This means that the project manager will be prepared for any scenario that they might face and know exactly how to solve such problems (Dess, 2012).

Reference:

Dess, G. G. (2012). Strategic management: Text and cases. New York: McGraw-Hill/Irwin.

Miller, R. W. (1963). Schedule, cost, and profit control with PERT: A comprehensive guide for program management. New York: McGraw-Hill.