Browse Definitions:
Definition

cost management

This definition is part of our Essential Guide: Information technology priorities: A guide to TechTarget's annual survey

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

Powered by:

SearchCompliance

  • risk map (risk heat map)

    A risk map, also known as a risk heat map, is a data visualization tool for communicating specific risks an organization faces. A...

  • internal audit (IA)

    An internal audit (IA) is an organizational initiative to monitor and analyze its own business operations in order to determine ...

  • pure risk (absolute risk)

    Pure risk, also called absolute risk, is a category of threat that is beyond human control and has only one possible outcome if ...

SearchCloudProvider

  • cloud ecosystem

    A cloud ecosystem is a complex system of interdependent components that all work together to enable cloud services.

  • cloud services

    Cloud services is an umbrella term that may refer to a variety of resources provided over the internet, or to professional ...

  • uncloud (de-cloud)

    The term uncloud describes the action or process of removing applications and data from a cloud computing platform.

SearchSecurity

  • cyberextortion

    Cyberextortion is a crime involving an attack or threat of an attack coupled with a demand for money or some other response in ...

  • Cybercrime

    Cybercrime is any criminal activity that involves a computer, networked device or a network.

  • National Security Agency (NSA)

    The National Security Agency is the official U.S. cryptologic organization of the United States Intelligence Community under the ...

SearchHealthIT

  • Practice Fusion

    Practice Fusion Inc. is a San Francisco-based company that developed a free electronic health record (EHR) system available to ...

  • RHIA (Registered Health Information Administrator)

    An RHIA, or registered health information administrator, is a certified professional who oversees the creation and use of patient...

  • 21st Century Cures Act

    The 21st Century Cures Act is a wide-ranging healthcare bill that funds medical research and development, medical device ...

SearchDisasterRecovery

SearchStorage

  • Random Access Memory (RAM)

    Random Access Memory (RAM) is the hardware in a computing device where the operating system (OS), application programs and data ...

  • floating gate transistor (FGT)

    A floating gate transistor (FGT) is a complementary metal-oxide semiconductor (CMOS) technology capable of holding an electrical ...

  • bad block

    A bad block is an area of storage media that is no longer reliable for storing and retrieving data because it has been physically...

SearchSolidStateStorage

  • hybrid hard disk drive (HDD)

    A hybrid hard disk drive is an electromechanical spinning hard disk that contains some amount of NAND Flash memory.

Close