No project ever goes exactly as planned — change orders, fluctuating material costs and weather conditions can wreak havoc on a project budget. That’s why it’s important that you produce accurate cost estimates and effectively control the costs that can be managed to the best of your ability.
Preliminary Budgets & Cost Estimating
It pays to hire a construction manager with expertise in time and cost estimating early on in any project. The construction manager should review preliminary plans as they are submitted, and anywhere cost estimates reveal discrepancies, the plans should be revised accordingly.
3 Ways to Control Construction Project Costs:
- Accurate Cost Estimating
- Avoiding Delays
- Keeping Everyone in the Loop
Accurate Cost Estimating
There are many reasons a project can go over budget, but one of the most common reasons happens before the project ever starts. Errors in cost estimating, including unclear or incomplete specifications, omissions in estimating and bad assumptions or bad data are all common problems. It is essential that a system be in place to:
- Clearly identify tasks
- Capture relevant historical project and cost data
- Develop standard processes
- Ensure scope/estimate is complete
- Identify uncertainties and risks
- Verify realism, completeness, and consistency
While it is, of course, important to monitor costs, there are also other risk areas that need to be closely monitored including management processes, resources, and schedules. Projects that go past schedule increase costs and cut into a construction firm’s profit margin. So naturally, keeping projects on-time is another key component of managing a construction budget. An integrated project plan that provides a comprehensive view of the project is a valuable asset when it comes to keeping projects on track. Being able to analyze the interplay of resources, schedules, costs and potential project changes in advance can help to keep the project on the right path.
Keeping Everyone in the Loop
One of the most common reasons for broken budgets and cost overruns is lack of communication. When construction teams can’t collaborate easily, errors happen. Mistakes caused by miscommunication can waste time and resources, as it often means backtracking. The ability to access and interact in a meaningful way while in remote locations is critical to keeping projects on track. Real-time input and the information needed to make decisions in the field go a long way in maximizing project profitability.
There will always be variables that are beyond the scope and control of any firm, but the right construction management oversight can help firms anticipate challenges and limit cost overruns.
LET’S WORK TOGETHER
Murow Development Consultants’ Construction Management Oversight Specialists provide services to enhance the management and administrative practices of any construction project. We are goal oriented and problem solvers, which allow our clients to procure the benefits of cost savings and avoidance of delays and complications.