From the perspective of the project life cycle, what should the project cost include?

In project management, effectively forecasting and managing project costs is a challenging task for project managers.

Many companies, especially R&D companies, will regard project development cost as the project cost setting baseline (project development cost refers to the total amount of actual expenses required to develop the target product, that is, the project development cost is to realize the product from 0 to

1 All costs incurred in the process. The costs in this process include the labor costs of the development team, material costs, equipment costs, external cooperation costs, etc.).

Project managers budget, supervise and control this part of the cost through effective cost management to ensure that the project budget is always on track and will be completed within the planned scope.

In the past few decades, the goal of reducing project development costs has been the goal of most companies in project cost management.

However, as technology develops and updates faster and faster, companies are facing increasing competitive pressure. Subsequently, the understanding of project costs is also quietly changing. The awareness of project cost management is changing from the past.

The project development costs are transferred to the concept of project life cycle cost.

The whole life cycle cost of the project includes two parts: the first part is the project development cost mentioned above, that is, the cost incurred in the process of the product from 0 to 1; the second part refers to the cost incurred in the process of the project product from 1 to N

the cost of.

N refers to the manufacturing quantity of the product during the life cycle. We here refer to the second part of the project cost as the operating cost. Obviously the operating cost includes the product BOM cost, production and transportation costs, after-sales service costs, etc. For traditional hardware products,

In other words, the operating cost of a project is far greater than the development cost of the project. Even for software projects, the company's subsequent costs for software operation and maintenance, problem repair, and upgrades are far greater than the development cost of the project.

Therefore, modern project cost management can no longer just focus on project development costs, but must extend to the full life cycle cost range of the project.