5 Important Elements of Project Cost Management Tools

If you oversee large projects, you know how challenging it is to effectively forecast and manage costs.

While spreadsheets track certain components of projects, their functionality and effectiveness are limited. Making the shift to project cost management software is a step in the right direction, but choosing the one that enables you to increase productivity, reduce risk, and measure costs through the full life-cycle of a project requires thorough research.

The most valuable project cost management tools offer these five essential features.

1. Estimating Capabilities

One of the main objectives of a project cost management solution is to simplify and reduce the costs of your projects. In order to do this, the solution you choose must have the ability to calculate productivity from a variety of resources, including man-hours, currencies, rates, and labor types.

In addition, the solution should provide easy access to benchmark values from historical data. This feature will enable you to identify any variations in performance during the project so that any necessary adjustments can be made. You should check whether the software provides the ability for third parties to import estimates through Excel or text files, which can prove valuable.

2.Budgeting and Forecasting Features

The software you choose should allow you to create accurate budgets and forecast outcomes based on applicable trends. In order to do this, the software should offer flexible features that enable you to quickly track project costs at all levels, compare your project’s target budget to actuals, and view reports on planned and earned value. This information can offer you important clues about the direction your project is going and whether or not action is required. Another helpful feature is the ability to calculate “what if” scenarios.

3. Project Performance Measurements

As a project manager, it is up to you to ensure your projects stay on schedule and within budget. That said, having the ability to view and track overall project status in real time is an important component. Easy access to performance measurements against your budget, forecasts, actual costs, and other key indicators are also vital. Performance measurement features allow you to spot problems with your budget or schedule so you can take remedial action and get your project back on track immediately.

4. A Variety of Easy Reporting Options

Your cost management tool should offer a variety of reporting options. It should have intuitive report-building features that enable you to customize reports quickly and easily. If building a report requires a manual or the help of an outside consultant, you should consider an alternative. Secure sharing in the Cloud for total visibility is also a must when it comes to reporting.

5. Simple and Easy to Use

Because one of the primary objectives of project cost management software is to increase productivity, the solution you choose should be simple to understand and use. Your solution should allow you to quickly configure data and seamlessly move information across each of the project cost management components. If there are multiple steps involved in manipulating information, continue your search.

There are several project cost management solutions available to manage your projects across their lifecycle. While you won’t find an inordinate number of choices on the market, you will find pages and pages of sales information that accompany each one. Don’t let all the material overwhelm you. Review the most important components outlined in this article to help cut through the fluff and guide you in your search.