Project managers must account for the cost of all resources required to complete the project scope. Some inexperienced project managers are prone to underestimating costs. It is far preferable to complete the project on time than than having to “pass the hat” to collect more cash.
Organizations employ a variety of ways to make the most use of project resources while keeping costs under control. Some government bodies and commercial businesses have established a project management office (PMO). A project management office establishes best practises for project planning and management, offers templates for planning and monitoring, compiles a library of information on previous projects, and gives assistance to project managers and teams.
·      Examine work plans and budgets for similar, past projects in the organization and consult with personnel involved in those projects;
·      Communicate with peers and colleagues in other organizations about their experience on similar projects;
·   Conduct the necessary research on direct expense items (costs for travel, computer software, and equipment);
·     Contact vendors and contractors for input on potential costs for contracted services (e.g., field data collection) based on their experience;
·      Utilize a cost estimating tool (such as a prepared spreadsheet) with sufficient depth to record labor time and rates, as well as all direct cost items;
·     Use the cost estimation tool to develop high-cost and low-cost versions, which will serve as the foundation for preparing a final budget.
Estimating resources and creating project budgets is difficult, but it becomes simpler as your project planning expertise grows. Estimating work time can be particularly difficult. In most technology projects, you should focus on real work time for project team members rather than task duration (calendar time).
