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Why do you think it’s difficult to understand some of the basic cost terms in this chapter? Why

aren’t many technical people interested in cost-related subjects? What could be done to change

this?

[Author Name(s), First M. Last, Omit Titles and Degrees]

[Institutional Affiliation(s)]

Author Note

[Include any grant/funding information and a complete correspondence address.]

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Abstract

Project management is a practical subject. Cost management, a part of project management is of

the same type. Multiple cost terms, according to multiple situations are quiet confusing to

understand. Technical staff of a project are less concerned with the cost of a project because of

its practical nature and them being focused on the technical aspect of the project
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Why do you think it’s difficult to understand some of the basic cost terms in this chapter?

Why aren’t many technical people interested in cost-related subjects? What could be done

to change this?

“Managing project costs is always challenging due to the complexities, constraints,

uncertainties, and conflicting interests and priorities on projects.”

Cost management, just like its superset project management, is more practical than

theoretical. Practical application of theory and mostly, experience contribute to successful

management (project and cost). This is one of the main reasons why cost terms are difficult to

understand.

Confusing cost terms

For any project, there will be a cost for it. The crucial part is that there will be different

costs (both in quantity and quality) based on the phase and the requirements of the project. This

results in multiple classifications of cost theoretically. For example, there are various costs and

cost classifications: Classification according to:

 Financial statements: Product and Period costs

 Cost behavior: Variable, Semi-variable, Fixed

 Assignment: Direct, Indirect

 Cost decisions: Differential, Sunk, Opportunity

 Cost of Quality: Prevention, Correction, Warranty

These different costs are classified according to when and where they were made. These

can be better understood only when a person is practically in that situation. Theoretical terms just

explain what those cost terms are, but practical application deepens the understanding towards
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that subject. Not just the different costs, even concepts such as Earned Value Management

(EVM) are better understood through application.

Technical People and Cost1

In every project team, there are those who are concerned about the technical part and

others about the project constraints: scope schedule and budget. The technical crew of the project

are more focused on the schedule, that is, to meet the deadline successfully. Thus, they focus on

assets which help them achieve their goal with the highest efficiency. This makes them less

concerned about the costs involved. They are the least concerned about the budget constraints of

the project unless specified. When the budget is mentioned to the technical staff, they find ways

to satisfy the project scope, schedule and budget requirements. Thus, the technical staff, having

their mind filled with the technical aspect of the project, are less interested in the budgetary

aspects of it. For example, in a construction project, the civil engineer is concerned about the

sturdiness of the building (primarily) and not about the cost of the building.

Another reason why technical people don’t get cost properly is because they are not

involved in the budget part of the process. All the assets they require are handed to them, leaving

the with their project tasks and deadlines. This makes their mindset single lined and aimed at the

finish line only. This leads to them not understanding, in fact not involving themselves with the

cost part of the process.

A solution to this problem is to reciprocate involvement. That is, the non-technical staff

must involve themselves with the technical parts of the process and vice-versa. This solves more

tha n just the above problem. With the added communication, any communication barriers such

as “Technical debt” is eradicated. Apart from that, the non-technical staff will understand the

technical requirements of the project, whilst explaining the non-technical constraints of the
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project to their counterparts. This is a simple solution for various problems at the cost of

additional time for discussions.

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References

 (https://www.projectmanagementdocs.com/blog/managing-costs-on-your-project/, 2017)
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Footnotes
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Tables

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