Cost management is defined as the planning of business processes and costs of companies. Just as each project has its own cost management plan, companies also have cost management practices integrated into their business models. Due to its wide range of application areas and strategies, there is no single accepted definition. If cost management is successfully implemented, it helps to reduce the cost of production of goods and services while increasing the value provided to the customer. For example, projected costs are identified and measured before the project starts. Expenditure items need to be approved before procurement takes place. By comparing the expenditures made during the duration of the project with the initial projections, the costs are kept under control and are tried to be realized within the forecasts as much as possible.

Through this approach, cost management gives the company an idea of the feasibility of the estimated expenditures in the first place, and helps to forecast future expenditures more closely. Any overspending can be monitored in this way and unnecessary expenses can be avoided during the project. Using cost management on its own may not make sense; the project should be carried out within the framework of this strategy.

Addressing the normal operating cycle of companies with a cost management strategy, rather than on a project basis, helps management to recognize problems and risks early. It is a fact that cost management, which functions as an early warning system in today’s heavy competition conditions, has a great contribution in terms of profitability and sustainability.

As your solution partner, Erke Consulting supports you in the establishment and operation of this system and helps you to take precautions before bad surprises are encountered.