Basic Principles of cost Management Most ceos and boards know a lot more about finance than It, IT project managers must speak their language Profits are revenues minus expenses Life cycle costing is estimating the cost of a project over its entire life Cash flow analysis is determining the estimated annual costs and benefits for a project Benefits and costs can be tangible or intangible, direct or indirect Sunk cost should not be a criteria in project selection 2021/2/21 102021/2/21 10 Basic Principles of Cost Management ◼ Most CEOs and boards know a lot more about finance than IT, IT project managers must speak their language ◼ Profits are revenues minus expenses ◼ Life cycle costing is estimating the cost of a project over its entire life ◼ Cash flow analysis is determining the estimated annual costs and benefits for a project ◼ Benefits and costs can be tangible or intangible, direct or indirect ◼ Sunk cost should not be a criteria in project selection