How can you learn from past cost management experiences?

1. Plan Cost Management / Project Resource Planning During the creation of a cost management plan (a key component of the overall project management plan), descriptions of how project costs will be planned, structured, and controlled are defined. Resource planning involves utilizing a work breakdown structure (WBS), a hierarchical breakdown of all of a project’s deliverables and the work required to complete them. The WBS is used to calculate the full cost of resources needed to complete a project successfully. 2. Estimating Project Costs Cost estimation is an important process in project cost management in which costs associated with all required resources needed to complete the project are quantified.

In the intricate realm of cost management, the past is a guidepost to the future. Earned Value Analysis and variance assessments provide a technical lens, dissecting deviations. Trend analysis and forecasting techniques add depth, unraveling the narrative of project dynamics. Yet, the human touch, through post-project reviews and collaborative learning, enriches the process. It's not just about numbers; it's about weaving a story of continuous improvement and shared wisdom in the tapestry of construction cost management.

Once a cost management plan is in place, it's crucial to gather cost data in a structured and consistent manner. Every employee should be aware of how cost data is collected. This allows for the identification of patterns or trends that can be considered for similar projects, making necessary adjustments. Additionally, variance analysis helps pinpoint areas where adjustments were required, and highlights which elements should be monitored more closely due to their economic significance, volume, or complexity. Documenting lessons learned from past projects not only aids in your own evaluations but can also be shared with stakeholders. The judgement and experience of the cost manager is crucial, to know when and how to use past experiences.

For me, allowing the onsite manager to be the one to order product needed, or to at least have a big say in it, is essential, since that individual has eyes on. Too often, an off site supervisor will make the call independently of the person actually running the project. This often leads to over ordering, or mis ordering, which drives up costs.

In cases where previous costs are not tracked with sufficient detail, a first step can be: increasing record keeping details. Some organizations might just track total labor. Others break this out with codes per project, sub phase, and increasingly granular definable feature of work. Beware of the law of diminishing returns. How much time and energy is it taking to get this extra detail? vs. What benefit are we getting from it? That being said, measuring something should be your first step towards improving it. Communicate why we have this extra step (logging activities in greater detail). If people don’t understand how the data will be used, the info they record may not be useful. Regular cross functional teams meetings may help.

Create a structured system for documenting lessons learned from cost performance reviews. This should encompass project details, cost management plans, methods, performance results, variances, and influential factors. Include both positive and negative aspects, culminating in actionable recommendations and best practices for enhanced future cost management.

It is sadly the norm to have construction projects be over budget and delayed. While the reasons are endless and it is impossible to isolate one or two variables tracking and logging historical mistakes is definitely a contributor. Creating a retrospect log for all the mistakes and it's financial implication is definitely a must have. Especially when it comes to material pricing, where a lot of lessons can be learned such as hedging is an option, previous quotes are not valid when pricing or even undermining expedited fees when schedules are getting tough. It is very important to keep a continous log and share it with team members when possible to review occasionally.

It is good practice to hold a final meeting at the end of each project to identify any areas for improvement as well as any costs that were not anticipated or were higher than what was quoted in the proposal. However, many companies fail to do so due to lack of time and repeat many of the same mistakes.

Lessons learned in cost management provide valuable insights into the factors influencing project expenses. By understanding what worked well and what led to challenges in past projects, teams can make informed decisions, improve cost estimation accuracy, identify potential risks early on, and implement strategies to mitigate financial challenges. This iterative learning process contributes to more effective cost management and helps teams navigate future projects with greater efficiency and foresight.

Don’t rely on cost managers to be budget any project without input from engineers who understand and appreciate True Value…..

Critical with sharing is getting the team you work with to buy In to the analysis and look and implement lessons learned whether that be for rate fluctuations over a programme duration or the simplicity of assessing the programme and ammending accordingly

Ne jamais faire confiance aux entreprises plus particulièrement quand il s'agit de facturation. Tout doit passer sous la loupe.

I Agree but pay attention because construction industry has a lot of customization, and different methodology to get the same thing done.

This method will assist in updating the budget through budget revisions to increase or decrease the budget during the budget year and forthcoming years

simple lessons for cost management. Keep lean manpower strength.. Always keep resources so that you can use and develop for future projects . Never keep too many specialists for construction on permanent roles. outsource specialist whenever you need and use for field young and fresh resources. Materials should reaach site only when needed and keep strict inventory control. stores management is essential. Ordered project related equipments should reach site as per project erection schedule. Keep close monitoring on physical survey and do not get carried away by presentation. corrective actions should be on war footing. keep close ears to ground at site and very keen eyes to observe things . Be human to people working for the projct.,

Consistently reporting on cost performance in a construction project is essential for staying within budget. Regular monitoring helps prevent overruns, allowing for timely identification of potential issues. By promptly identifying such risks, effective mitigation strategies can be implemented before they escalate, ensuring that the impact on the budget is minimized.

The first thing I need to focus on it is The Budget and benefits after costs because we have several departments and projects some of them have high cost and low earnings. For these projects the managers need to discuss the problems by weekly or monthly meetings with engineers or their staffs to put a plan how to reduce the cost and increase the revenues by good arrangement for the work and exploiting time to achieve the work in low time and cost and good quality and satisfying the stakeholders.

Evidentemente una buena herramienta informática, es clave para poder realizar y analizar nuestros costos. Podremos observar los desvíos inicialmente no previstos para poder tomar las medidas oportunas. La experiencia es clave para la realización de los mismos y para la realización y análisis de los costos y rendimientos. Un buen programa a medida y adaptado a nuestro empresa, lejos de ser una inversión costosa, lo amortizaremos en muy poco tiempo, ya que nos dará la información deseada de manera rápida y sencilla. Vale la pena invertir en ello.

In my experience, and with previous companies, I would always seek to find areas, I fall short in. In addition, areas that I excelled in. Continuing to be teachable is the only way to grow.

Feedback from the build team is always a benefit. Especially when looking at time related costs. Prelims for example can easily be an area that is hit and miss when tendering. So seeking advice both pre and post contract should assist the whole team

Disponer de una buena herramienta informática "a medida", no ayudará a retroalimentarnos y aprender, pudiendo comparar no sólo las diferentes obras, sino la evolución de las mismas. En nuestro sector "siempre y cada dia" se aprenden cosas, si uno quiere, sinó no hay posible evolución.

As AI and other technologies become more available and there is more software dedicated to the construction industry - it makes sense to implement tools that can assist with data collection, analysis, and generating insights per specific project and across all of the company's projects

Leveraging ConWize offers an effortless method for learning from past cost management experiences. This tool enables construction professionals to easily compare changes in the Bill of Quantities (BOQ) with historical data, fostering a more insightful and informed approach to cost analysis and project management.

Client's cooperation, support and vision Inasmuch as construction professionals are involved with all the brilliant plans, models and tools the success of all that depends on the cooperation of the clients, their support of the cost control specialists and their intuition/vision. Great clients are good people managers and delegators which makes the professionals involved want to own a small part of the project. As a result these great clients, with their good public relations and people management skills somehow get the best deals whether in materials, professional fees negotiated or quality of workmanship.

No se cual sea tu religión, esto no es a favor de ninguna. Es solo que si tu socio es tu dios, te aceptara tu propuesta correcta y la errónea no permitirá que se implemente. Gustav García *

One of the best ways is to make sure your Cost Management aligns with how the work is being executed and tracked in the field. I feel sometimes as Management we want to have all these Cost Codes, but does the field or contractor really track costs the same way? Is it too complex? Can it be simplified? Well, most of these things really need to be aligned with the Field Execution and your Estimating Team. Why? Your estimators need to understand how the field installs and builds. Only way is to have frequent discussions about what went well, and what didn't go well? and How we can improve? With the Field Execution and your Estimating Team.