Project cost management is keeping your project within its defined budget. It is also an essential part of project management.
Cost estimating, cost budgeting, and cost control are three cost related processes that interact with each other and with other areas of project management. All of these processes require effort and a working knowledge of the cost of things. Depending on the complexity of the project they can require more than one person, and they may occur more than once during the life of a project.
Project cost management can be very simple, or extremely complex. If scrimping in one part of the project will increase… say… a maintenance cost after the end of the project, then that maintenance cost should be included in the project cost management strategy. This approach is sometimes` called life-cycle costing, and can reduce the cost of a project and improve the quality of the deliverable. But Project management should also consider what the project stakeholders think about the cost of the project. They will measure cost in different ways and at different times. Like looking at a brick from a different angle.
Cost estimating and cost budgeting are two different processes, but are often closely linked. On small projects they are often done by the same person because of this. Influencing cost is easiest early in the project, so it is important to define the budget in the scope of your project at the beginning. This includes creating a cost management plan, which has many benefits.
This term is defined in the 3rd and the 4th edition of the PMBOK.
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