The Project Cost Management Of Telecommunication System Development In NS Company

After highly developed in1990s, the development step slows down in telecommunication industry because of America economic crisis and the European debt crisis. At the same time, telecommunication technology is mature and the market is saturated, so the competition between telecommunication companies is increasingly aggressive. However, the development of mobile telecommunication injects vitality to the whole telecommunication industry in recent two years. Telecommunication device industry is also full of opportunities for the needs of4G network. The companies should reduce costs to keep price advantage in order to get more profit in the competition. Telecommunication device industry is a high technology industry, the development cost accounts for the largest proportion in total cost. So in order to reduce the costs of companies, the key way is effectively managing development costs in project.Firstly, this paper states the theories of cost and cost management systematically, then analyses all compositions of cost in project, research the project process of cost management. By means of case analyze on a telecommunication system development project in NS Company, we research characteristics of cost management in project in telecommunication device industry, and find the project development cost compositions and elements to seize the key segment to implement effective cost control. Then use systematical method to reduce development costs, promote profiles and competitive power of the company.To find the problems existed in NS Company, the paper analyses the current situation of project cost management. Based on the problems, it proposes a series of solution to improve project cost management. The solutions are including establishment cost centers according to functional departments, using earned value management to control cost, and optimization of project development flow to reduce the incurrence of cost. In the end, it uses a case of a project to verify the solution’s feasibility. The project development process discussed in the paper is used to most telecommunication equipment company, and cost management in this development is typical. Thus the research of cost management in this paper can be extended to the entire telecommunication equipment industry.The cost management can be affected significantly by schedule and quality in project management. For example, the delay of project schedule can cause project cost overruns; project quality standards may result in rework and lead to project cost overruns. In some industries the cost management only focuses on the cost itself in project. But for telecommunication industry strict controlling schedule can reduce project cost effectively. The influence of quality impacting on cost is out the scope of discussion. The research for relationship of project cost and schedule in this paper is a complement for cost research in telecommunication industry.