Keeping your project within budget and completed on time can be quite a challenge. To help you out, here are 5 tips to secure your project costs:
Metrics and benchmarking
Metrics provide a powerful means to measure the performance and health of your project. They can be categorized according to seven criteria: safety, time, cost, resources, scope, quality, and actions. Examples are the average waiting time, installed quantities or cost overrun. A wide range of metrics could be defined for every project.
Metrics should encourage improvement, effectiveness and appropriate levels of project controls and help you to spot possible risks and productivity losses before they happen. Compare metrics against an expected baseline that is either according to the planned progress or the industry standard.
Use modern cost management software
Nowadays, processes, design and construction projects have become smarter and more automated. As much as technology has advanced, estimating techniques evolve as well. Despite the fact that many estimators still use simple spreadsheet tools, over the last years advanced cost estimating software was brought to the market. Instead of using flat data, costs can be engineered to determine project costs better and faster.
Location and productivity data
A valuable part of cost management data covers information about location effects on projects. People work together world-wide to gather location and productivity factors in tables to be used in estimating and performance measurement against a frame of reference. This allows better validation and control of your projects.
Reporting and communicating the total cost
When you have constructed your total estimate, it needs to be reported and communicated to the rest of the project team. For them to correctly interpret the figures, always include a Basis of Estimate report to outline the inclusions, exclusions and assumptions you have made. Without this, the estimate is just a meaningless number.
Reduce scope growth
You need to have a way of estimating and processing the impact of changes to the scope of work. If not controlled, changes can lead to huge cost overruns and delays. A change is caused by a difference between the original contract requirements and newly imposed or arising subsequent work to this agreement. There are no projects without changes: therefore it is important to have a procedure in place. With proper change management, the impact and amount of changes can be dramatically reduced.
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