Missing deadlines and going over the budget are two of the most common challenges that construction project managers face while working on projects. While it may happen in all kinds of projects, cost control is often a common concern for megaprojects with larger investments and a broad scope of work. According to a McKinsey report, large construction projects typically take 20% longer than scheduled to finish and are up to 80% over the estimated budget.
While integrating good cost control practices in construction management can reduce the number of setbacks in projects, it is easier said than done. Managers cannot expect to do it manually; rather embracing cost control software project management can help them to get their budgets on track. Before trying to understand how the platform works, it is vital to have a clear idea of typical cost control procedures and how they work. Let us explain them in detail.
Preliminary Estimation - Just as the project initiates, the project team needs to go over the preliminary plans and come up with a cost estimation. The objective is to study the budget of each part of the project because even the most experienced engineers and architects can make errors with planning and budgeting.
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Detailed Estimation - The next significant element of cost control is a detailed estimation. It includes precise and granular estimates of costs such as materials, labour and overheads. At this stage, the project manager and stakeholders should also come up with the estimates on timelines.
Construction Cost Roadmap - Once detailed estimations are done, the project manager has to draw up a complete roadmap with details of cash flow estimates. It enables the comparison of specific activities with the project timeline so that it is possible to spot potential delays and budget overruns even before they happen.
Cost Control Forecasting - When it comes to effective cost control, everything boils down to the ability to forecast future costs. Managers can do it by setting completion schedules and keeping track of them with milestones along the way. As the project completes each milestone, the manager gets a clear view of how the project is meeting budget and time requirements. If they expect delays or overruns, it is the right time to make some adjustments and get things on track.
How can cost control software project management help with the process?
Considering the steps involved in cost control management, it is complex and time-consuming. Things can get all the more challenging for larger projects with multiple elements and costs.
Investing in cost control software for project management is a smart move as it automates the process and makes the calculations less complex and error-free. Further, a software solution with mobile capabilities is a plus as it serves the advantage of real-time data.
Managers and stakeholders are able to track the financial progress instantly, instead of going through spreadsheets and paperwork. The key elements, such as purchase orders and daily reports, are accessible anytime and anywhere across the devices of the authorised users.
Conclusion
Cost control is something that no construction business can afford to miss out on because even minor deviations from the budget can cause massive overruns for a project, which is the last thing managers would want to deal with. Automating the process with a cost control software solution is the best approach for a business. It is more like a smart long-term investment that serves as a foundation for a construction company because they can leverage it year after year for enhancing one project after the other.
Summary
Cost control is one of the most critical concerns for construction project managers because not curbing expenses can lead to massive overruns in projects. Even as managers may try to curb them with best practices, the best way to manage costs is by investing in construction cost control software.
Author Bio
The author is a senior project manager with one of the top construction companies based in India. Apart from his professional expertise, he is also a seasoned writer who shared his articles and insights on popular niche blogs.
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