Browse Definitions:
Definition

cost management

This definition is part of our Essential Guide: Key IT metrics: A CIO guide

Cost management is the process of planning and controlling the budget of a business. Cost management is a form of management accounting that allows a business to predict impending expenditures to help reduce the chance of going over budget. 

Many businesses employ cost management plans for specific projects, as well as for the over-all business model. When applying it to a project, expected costs are calculated while the project is still in the planning period and are approved beforehand. During the project, all expenses are recorded and monitored to make sure they stay in line with the cost management plan. After the project is finished, the predicted costs and actual costs can be compared and analyzed, helping future cost management predictions and budgets.

Implementing a cost management structure for projects can help a business keep their over-all budget under control. Several business intelligence (BI) programs, such as Oracle Hyperion, offer cost management software to help businesses monitor costs and increase profitability. While the software may help, it is not imperative that software is used when executing a cost management plan.

Vendors may refer to cost management software applications as cost accounting, spend management or cost transparency products.  

See also: IT MOOSE management, IT chargeback system, capacity planning, Project Management Office (PMO), advanced planning and scheduling (APS) 

Learn more about cost management:

Cost Management Analysis Guide
Bernie Klinder describes how standardizing hardware to create a common desktop environment can keep costs down in a well managed Windows environment.

How a cost management analysis affects Windows Server 2008 migration
In order to calculate ROI for a Windows migration, you need some "hard savings numbers." In other words, you need to find areas where you can cut existing costs in your cost management analysis.

Spend management software, cost transparency tools help CIOs cut costs
For enterprise organizations with sprawling global operations, spend management software and cost transparency tools can help CIOs gain insight into spending and cost-cutting opportunities.

IT project management: The cost estimating processThe cost estimating process begins by breaking the project down into work phases such as design, engineering, development, and fabrication.
This was last updated in November 2010

Join the conversation

1 comment

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

I definitely agree that monitoring costs and profit on projects should be a standard for all companies. We had the same problem in our agency. But to find the tool is not as easy as it seems to be. Especially when the complex solutions like Oracle are not affordable for small business owners. That's why we came up with idea to build the tool for ourselves which fits to our business requirements and processes. We've been using it for us and found out that the same problem have other agencies as we are. That's why we launched it as a commercial tool. Check out Costlocker.com if this is the tool for you as well.
Cancel

-ADS BY GOOGLE

File Extensions and File Formats

SearchCompliance

SearchSecurity

  • botnet

    A botnet is a collection of internet-connected devices, which may include PCs, servers, mobile devices and internet of things ...

  • Web application firewall (WAF)

    A Web application firewall (WAF) is a firewall that monitors, filters or blocks traffic to and from a Web application. WAFs are ...

  • MD5

    The MD5 hashing algorithm is a one-way cryptographic function that accepts a message of any length as input and returns as output...

SearchHealthIT

SearchDisasterRecovery

  • call tree

    A call tree -- sometimes referred to as a phone tree -- is a telecommunications chain for notifying specific individuals of an ...

  • mass notification system (MNS)

    A mass notification system is a platform that sends one-way messages to inform employees and the public of an emergency.

  • disaster recovery as a service (DRaaS)

    One approach to a strong disaster recovery plan is DRaaS, where companies offload data replication and restoration ...

SearchStorage

  • secondary storage

    Secondary storage is used to protect inactive data written from a primary storage array to a nonvolatile tier of disk, flash or ...

  • VRAM (video ram)

    VRAM (video RAM) is a reference to any type of random access memory (RAM) used to store image data for a computer display.

  • ZFS

    ZFS is a local file system and logical volume manager created by Sun Microsystems to control the placement, storage and retrieval...

SearchSolidStateStorage

  • SSD RAID (solid-state drive RAID)

    SSD RAID (solid-state drive RAID) is a methodology commonly used to protect data by distributing redundant data blocks across ...

  • Tier 0

    Tier 0 (tier zero) is a level of data storage that is faster, and perhaps more expensive, than any other level in the storage ...

  • PCIe SSD (PCIe solid-state drive)

    A PCIe SSD (PCIe solid-state drive) is a high-speed expansion card that attaches a computer to its peripherals.

SearchCloudStorage

  • RESTful API

    A RESTful application program interface breaks down a transaction to create a series of small modules, each of which addresses an...

  • cloud storage infrastructure

    Cloud storage infrastructure is the hardware and software framework that supports the computing requirements of a private or ...

  • Zadara VPSA and ZIOS

    Zadara Storage provides block, file or object storage with varying levels of compute and capacity through its ZIOS and VPSA ...

Close