Traditional Facilities Construction Cost Management Failure – Repair, Reno, Maintenance, and New Builds

By peter.cholakis@verizon.netTraditional Facilities Construction Cost Management Failure

Traditional construction cost management remains problematic for most real property owners.

construction cost management
Traditional Construction Cost Management Failure

 

I just read a “study” on the “Current State of Cost Management Capabilities” that clearly reveals the lack of awareness, education, and capability relative to this critically important practice area.

The recently published survey of 243 owners (122 public, 121 private), 240 general contractors and 241 specialty trade
contractors, noted the following….

Less than 24% of respondents said that their organization was capable of the following.

1. I can accurately assess risk related to any changes, billing, or performance issues.
2. I can dynamically track every dollar in my budget and forecast critical costs with real time data from the field, while staying in sync with the accounting system.
3. I can easily uncover cost details and create comprehensive financial reports from a single source of truth.
4. I can leverage data from previous projects to benchmark cost performance and improve future cost estimates.
5. I can manage collaborative workflows and centralize communication across our office, field, clients, contractors and/or vendors to reduce project/payment delays.
6. I know where we are making or losing money on a project or across my portfolio, at any given moment.
7. My company’s cost management capabilities create a competitive advantage for us.
8. My company’s change management process is streamlined from start to finish.

Is there a single Public Sector organization that can claim verifiable construction cost management capability?

Facilities and other physical infrastructure construction, repair, renovation, or maintenance cost management is impossible without the following basics.

  1. Integrated planning, procurement, and project delivery internal and external teams, working with a collaborative framework with defined workflows and centralized communication.
  2. A locally researched, granular line-item construction cost database that is current.
  3. Mandatory initial and ongoing training for ALL participants and stakeholders
  4. Quantitative performance metrics
  5. Regular third-party audits

 

 

Solutions are readily available…. Learn more?