engineering

Project cost management

Project cost management is a engineering topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Project cost management rather than just read about it. In short: Project Cost Management (PCM) is the dimension of project management which aims to ensure that a project is completed within its approved budget. It encompasses several specific project management activities including estimating, job controls, field data collection, scheduling, accounting and design, and uses technology to measure cost and productivity through the full life-cycle of enterprise level projects.

Key takeaways

Project cost management belongs to engineering; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Project cost management to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Project cost management from memory before moving on to harder problems.

Reference excerpt

Project Cost Management (PCM) is the dimension of project management which aims to ensure that a project is completed within its approved budget. It encompasses several specific project management activities including estimating, job controls, field data collection, scheduling, accounting and design, and uses technology to measure cost and productivity through the full life-cycle of enterprise level projects. According to the Project Management Body of Knowledge (PMBOK), PCM's primary concern is the cost of the resources needed to complete the project. However, PMBOK also notes that PCM should also consider the impact of project management decisions on customers' wider or life-cycle costs such as the use of the building or IT system generated by the project. Beginning with estimating, a vital tool in PCM, actual historical data is used to accurately plan all aspects of the project. As the project continues, job control uses data from the estimate with the information reported from the field to measure the cost and production in the project. From project initiation to completion, project cost management has an objective to simplify and cheapen the project experience. This technological approach has been a big challenger to the mainstream estimating software and project management industries.

References

Worked examples

Example 1 — a first encounter with Project cost management

Start with the simplest possible case. Write down what Project cost management claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In engineering, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Project cost management before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Project cost management ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Project cost management

In research: Project cost management appears in engineering research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Project cost management in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Project cost management is common in secondary-school and first-year university syllabi. It links to neighbouring topics Cost engineering, Project management techniques, so understanding it makes those chapters shorter.
In everyday life: Look for Project cost management outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Project cost management in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Project cost management means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain Project cost management out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Project cost management in simple terms?

Why does Project cost management matter?

Because it connects several engineering ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Project cost management?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Project cost management.