Custom «Project Cost Management Article Summary» Sample Essay
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In his article “Relentless Trending – Key to Effective Cost & Schedule Management”, Certified Credit Executive Nelson Bonilla (2006) discusses how project teams can succeed in meeting project costs and schedule objectives of capital projects via establishing trending techniques, analyzing trending data, and implementing corrective actions. The analysis of the article shows that trending is a helpful instrument for keeping costs of the project in check. Subsequently, since trending is associated with project budget and cost containment, the article does relate to the project cost management.
Bonilla (2006) emphasizes how trending is critical in providing credible project forecasts and completing projects on budget and schedule. The author addresses such issues as definition, importance, techniques, and frequency of trending, as well as responsibility and requirements for trending. He defines trending as the process of determining potential vulnerabilities and risks prior to their occurrence and minimizing their negative impact on the project. Bonilla (2006) argues that responsibility for the trending rests with cost and scheduling personnel of the project team. The author claims that in order to develop effective trending techniques for the project, the project team has to consider baseline budget, schedule, staffing plan, as well as performance curves and then establis metrics for measuring costs, progress, and performance.
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According to Bonilla (2006), only consistent and relentless trending during the entire lifetime of the project can provide reliable data about the project’s costs and timeframes. Furthermore, the article describes and discusses the most frequently used trending techniques. Notably, the elements of the project that determine the suitable trending technique are baseline budget and schedule, as well as the type of the project and contract. Lastly, the author warns cost and scheduling personnel not to view computer-calculated results as a hard data in the process of trending, but to validate the calculation, investigate trending dynamics, and remember that projects are about not good-looking reports, but tangible benefits of completing capital projects on budget and schedule.
Relation between the Trending and Concepts of Project Cost Management
According to the Project Management Institute (PMI) (2013), project cost management consists of several processes such as planning, estimating, budgeting, and controlling costs. The process of monitoring project costs implies updating those costs and managing changes of the baseline budget (PMI, 2013). Analysis of the tools, such as earned value management, forecasting, to-complete performance index, and performance reviews offered by PMI (2013) for controlling project costs indicates that these tools are driven by the same purpose as desccribed by Bonilla (2006). Since trending as well as aforementioned tools for controlling costs are intended to manage project costs, they complement each other; thus, trending may be integrated into performance reviews for examining the adherence of project team’s performance to baseline budget numbers. Then, trending may be integrated into forecasting and estimating the differences in budget that may be expected due to the current trends in project performance.
However, it should be noted that Bonilla (2006) discussed application of trending only to capital project. Therefore, the scope of applicability of trending may be narrower than that of tools discussed in “Guide to the Project Management Body of Knowledge” (PMI, 2013). Nevertheless, the Bonilla’s (2006) idea of trending implies that it will be applied proactively, “relentlessly”, and with vigor while standard tools for cost control may be viewed by project team as bureaucratic or formal requirements.
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Analysis of trending as a tool for effective project cost management indicates that correctly applied trending can facilitate the success of the project in meeting capital project cost objectives. Comparison of trending and standard project management tools for controlling project costs shows that trending as a helpful instrument for helping project to stay on budget is directly related to the project cost management.
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