The benefits of cost management include the following:
- Reduces overspending. Cost controls help project managers keep their budget on track and not let costs get out of control.
- Encourages planning. Cost management helps identify what is and isn’t working. It provides insight into resources and processes that helps managers make faster and better decisions about the current project and future ones.
- Facilitates financial health. Continuous monitoring, cost control and cost reporting contribute to a company’s long-term financial health. These efforts provide the data necessary for good decision-making. Implementing a cost management structure for projects helps a business keep its overall budget under control.
- Mitigates risk. Cost management typically involves setting a risk allowance for unforeseen costs, a useful step to prevent overspending.
- Supports standards. Consistent cost control, analysis and reporting help organizations adopt standards for assessing future cost data and productivity levels.
- Improves visibility. Many cost management tools for cloud services give real-time visibility into cost management metrics, like savings. They also provide a list of the users’ assets, and some use machine learning to provide suggestions on areas where users can change behaviors to save money.