Costs

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Project Budget and Return on Investment in Project Management Cost estimation is directly related to project budget, and overall Return on Investment (RoI). Project cost is the budget available for the overall project completion. Cost estimation process helps in identifying project risks and provides an option to discuss alternatives if new requirements are needed to be added. The accurate project costing plan enables one to weigh anticipated benefits against anticipated costs to assess if the project makes sense. Further, it allows one to review the periodical fund requirements, and also serves as a guideline to manage project on day to day basis. The main factors to be considered while calculating project costs are: • Manpower • Materials • Equipment • Premises • Service Providers Different cost estimating techniques are available which allows one to effectively assign corresponding resources and develop schedules to manage the project successfully. Resource costing is a common method where all the resources like equipment, material, services, and manpower needed for the project are listed and sum up their costs. Small businesses use resource costing for larger or more complicated projects. Small or simple projects can be evaluated using a cost-per-unit that is characteristic of the project. The characteristic unit is a measure of the size of the project that is indicative for the particular project. The total cost can be divided by the number of hours/units needed and can assess cost per unit or cost per hour. If the project is typical of one’s industry and businesses have completed similar projects over the past few years, an empirical approach can be highly accurate, and take the least time. To use this approach, one usually needs to buy software or a paper-based system that contains statistical information about the other, completed projects. By choosing the characteristics that apply to the present project from a list, and by filling in the overall parameters such as size and location, one can ask for cost break down. The system will provide typical costs for that kind of project. One of the most transparent ways of estimating the cost of a project is to base it on previous work. If company has completed a similar project recently, all the required costing information is available from the project files. Most of the time, historical data gives the most accurate prediction of future costs. Smart Admin allows you to estimate project cost per unit or per hour which ultimately results in better control over project cost. Further, one can retrieve past data from the applications of Smart Admin to understand the historical performance of similar projects. The cost per hour can be estimated based on the total hours allocated by the project against the total cost using the various tools in SMART ADMIN.

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