fbpx
Do you need customer support or technical assistance? Click here to submit a support ticket...

TOPIC: Cost Gain from execution

Cost Gain from execution 1 year 2 months ago #22741

  • Gbemi
  • Gbemi's Avatar Topic Author
  • Offline
  • Fresh Boarder
  • Fresh Boarder
  • Posts: 3
  • Thank you received: 0
If a project makes a cost gain from execution, where does the gain go to?

Cost Gain from execution 1 year 2 months ago #22795

  • Devin
  • Devin's Avatar
  • Offline
  • Expert Boarder
  • Expert Boarder
  • Posts: 93
  • Karma: 10
  • Thank you received: 52
The PMBOK (pg. 265), "...when opportunities are captured and resulting in cost savings, funds may be added to the contingency amount, or taken from the project as margin/profit."

Again, the PMBOK is not prescriptive (telling you what to do), but rather descriptive (what could happen). The other option is to simply run a budget surplus and depending upon how large the delta is this might be a fine way to go (if the savings is 5% or so). If it's a small project and the delta is large as a percentage of the project, you would probably add it as a catch-all contingency because running 40% under-budget is just not a meaningful way to run a project IMHO.

Hope this helps.
Last edit: by Devin.
Moderators: Yolanda MabutasMary Kathrine PaduaGabriella Dellino, PMPJoe PangJohn Paul BugarinEmily Rivera, PMPLisa Sweeney PMPHarry ElstonMani SelvanDenver MartinEric Wanyutu Kahiga, PMP, PMI-ACPSarah FucciThiago França, PMP®Felix Kamanga, PMPChan RampersaudElena MekhanoshinaKyle Kilbride, PMP

OSP INTERNATIONAL LLC
OSP INTERNATIONAL LLC
Training for Project Management Professional (PMP)®, PMI Agile Certified Practitioner (PMI-ACP)®, and Certified Associate in Project Management (CAPM)®

Login