Three perceptions of project cost – cost is more than a four letter word
Because the many components within organizations all perceive cost in different ways, project managers must ensure that they identify project cost early so that the other organizational components will understand how the project's cost affects their particular function. This article examines cost from the perception of three positions: the project manager (commitments), the accountant (expenses), and the comptroller (cash flow). It describes these perceptions in relation to a hypothetical project involving the purchase of a compressor. It then explains how project managers can use their understanding of these perceptions to plan and implement projects that improve company profitability. It also suggests numerous ways that project managers can influence the cost of goods sold (project costs) as well as interest expenses, tax expenses, and profits.