Less Well-known Benefits of Cost Management
Besides controlling the spending for a project, cost management delivers some additional benefits. Here are a few rarely discussed benefits of cost management:
Filters out wannabe stakeholders. Project managers should embrace the phrase “you gotta pay to play!” In other words, if stakeholders want their requirements considered for the project, they need to provide funding to deliver what they require. With cost management practices, you can ensure that the project receives acceptable cost-benefit ratios from every request. It also helps ensure unfunded requirements won’t burden your project.
Provides leverage to control change. Cost management can help prevent scope creep! Change request processing includes evaluating schedule and cost impact. That cost management aspect of change management means you have the data you need to say no to project stakeholders when they come up with ideas they can’t cost-justify.
Enables managing project speed or agile velocity. You know stakeholders are fond of asking for projects to be delivered sooner. Delivering the full project scope more quickly typically means higher cost. You can control the pace and integrity of delivery by asking whether funding is available for the early delivery and whether that extra cost makes sense. Without committed additional funding, fast delivery will skew your triple constraints and move your project status to yellow — or even red.
Similar approaches exist in agile environments. Because cost and time start are initially fixed based on the number of staff and planned sprints, delivering more features means more people or more time, both of which cost more. Before speeding up feature delivery, make sure the stakeholders can justify the request.
Helps prevent inappropriate projects from being selected. When a client launches a project without proper cost management, they’re likely to discover that the project outcomes don’t save time or money. Proper cost management can stop “dud” projects that aren’t worth the money or effort. In addition, it supports the tactic, “if you’re going to fail, fail fast.”
Have you come across other benefits of cost management in your projects? If so, add them in the comments section.
For more about project cost management, check out Bob McGannon’s Project Management Foundations: Budgets course.