ABSTRACT
Follow not only the money, but the technology also is a lesson that aptly typifi es what STEP cost management epitomizes as suggested by the quotes referenced at the beginning of this chapter. Cost management is a primary function in project management. Cost is a vital criterion for assessing project performance. Cost management involves having an effective control over project costs through the use of reliable techniques of estimation, forecasting, budgeting, and reporting. Cost estimation requires collecting relevant data needed to estimate elemental costs during the life cycle of a project. Cost planning involves developing an adequate budget for the planned work. Cost control involves continual process of monitoring, collecting, analyzing, and reporting cost data. Martin (2007) defi nes techonomics as the study of how technology affects the economy and a theory of organizational evolution that results from technological advance fueled and selected by economic success. STEP cost management is impacted by the state of technology and the concomitant cost factors. The primary components of cost management within any project undertaking are
Cost estimating• Cost budgeting• Cost control•
Cost control must be exercised across the other elements of the project management knowledge areas (PMI, 2004). The technique of earned value management plays a major and direct role in cost management. The technique is covered in detail later in this chapter.
