Based on Process Approach
FEATURED PAPER
By Dr. Roman Titarenko and Dr. Boris Titarenko
China and Russia
Abstract
Effective cost management is necessary to implement projects successfully. However, in practice organizations may face unique challenges that need to be addressed. To achieve this goal, the paper explores project cost management challenges, using survey responses from 51 managerial/senior-level staff on the open-ended questions connected to the project cost management processes. Data analysis, supported by process approach, was conducted with the use of systematic coding. The findings reveal that managing projects creates challenges, connected to the project cost management processes such as (1) cost management planning, (2) cost estimation, (3) cost budgeting, and (4) cost control. The research allowed for the discovery of a set of project cost management challenges, definition of their causes and effects, and development of possible countermeasures. Implications and recommendations for future research are given.
Keywords: Project cost management, Challenges, Process approach.
- Introduction
In the last years the interest in project management has grown by a considerable amount. The field of project management seems to be expanding, and the growing importance of project work in the global economy supports this trend (Harvey & Aubry, 2018). However, many researchers agree that managing projects is a complicated and challenging task (e.g., Niederman et al., 2018; Amer, 2020; Kahvandi et al., 2018). Project managers face various challenges every day, which despite the distinct characteristic of projects, appears to be common (Walkowska, 2020). New studies on this topic are developed every year, but there is still a lack of attention given to project management challenges (Patil, 2016).
Mossalam (2018) states, that it is almost impossible for a project to be delivered smoothly without facing any obstacles and issues during its lifecycle from its concept till closure. This topic of “project issue management” seems to be inevitable, but still, it did not attain the necessary attention neither in the literature nor in the project management standards or use in practice.
The true challenge lies in not being absolutely sure when and how the risks are going to show themselves (Sachan et al., 2016). The high level of uncertainty makes it impossible for managers to forecast all the risks (unknown unknowns) and prevent all the problems connected to the teams, levels of motivation, and organization of work (Raydugin, 2014).
The demand for professional expertise in project management appears to be rising without a sign of stopping, which is caused by the progressive complication of environmental processes and the functioning of various organizations together with developing issues through the execution of the projects (Bukłaha et al., 2016).
Equally with the scope, time and quality project cost management is one of the most important areas of PMBOK® Guide. Project costs are connected to all activities or resources in a project (Da Silva & de Oliveira, 2017). The project cost management profession is not widely recognized in society compared to professions such as architects and engineers, and it still faces plenty of challenges on the way of informing the society of the benefits that project cost management delivers to projects (Smith, 2014).
A project is a one-time and temporary affair, where planning and budgeting are based on estimations (Kwon & Kang, 2019). Despite the fact that tools and methods to account for uncertainty are introduced, projects with cost overruns are still a common occurrence (Torp & Klakegg, 2016). Researchers have studied the sources of cost overruns and created solutions to prevent them from happening in different countries and in a variety of ways. The said study also mentions that inaccurate cost estimation and uncertainties are the main causes of cost overruns (Kwon & Kang, 2019).
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How to cite this paper: Titarenko, R. and Titarenko, B. (2024). Exploration of Project Cost Management Challenges Based on Process Approach; PM World Journal, Vol. XIII, Issue III, March. Available online at https://pmworldlibrary.net/wp-content/uploads/2024/03/pmwj139-Mar2024-Titarenkos-project-cost-management-challenges-2.pdf
About the Authors
Dr Boris Titarenko
Moscow State Civil Engineering University
Moscow, Russia
Dr Boris Titarenko is a Full Professor at the Moscow State Civil Engineering University and Russian State Social University, academician of Russian Academy of Sciences (Department of Project Management). He is certified (level C IPMA) member of Russian Project Management Association SOVNET, Leading Assessor of SOVNET–CERT. His scientific interests include risk management, project manager competence evaluation, project management training, development of project management systems. Applied research methods are the Expert methods, Hierarchical methods, Model simulation methods, Operational research, Applied statistics, Social network analysis. He can be contacted at boristitarenko@mail.ru.
Dr. Roman Titarenko
International Business School Suzhou,
Xi’an Jiaotong-Liverpool University,
Suzhou, China
Dr. Roman Titarenko is an Associate Professor of Practice at. International Business School Suzhou, Xi’an Jiaotong-Liverpool University. He worked extensively in the project management industry before pursuing a career in education. Roman has got a significant working experience as a project manager and a business development director for international companies and private institutions operating in Russia – e.g., Coca-Cola Hellenic, The Stockholm School of Economics as well as Russian companies operating internationally.
He obtained his PhD degree from Russian State University of Management in 2001 where he conducted research related to the development of the conceptual model of the project management certification program. Lately, it greatly contributed to the creation of the project management certification system in Russia (IPMA-SOVNET certification).
From 2009 until joining XJTLU, Roman worked as an Associate Professor at some Russian universities, such as Russian State Social University and Plekhanov Russian University of Economics. He also gave lectures as a Visiting Professor at La Rochelle Business School (Excelia Group, France) and Cracow University of Economics (Poland). He is a certified project manager (IPMA Level C) by International Project Management Association.
His research interests lie primarily in project management, risk management, and strategic management. He can be contacted at Roman.Titarenko@xjtlu.edu.cn
