How to Streamline Your Estimating Process with Project Cost Management 

Project Cost Management is always a priority regardless of the type of project. In a construction plan, there are numerous elements for which proper cost management is required. Top-of-the-line elements are:

Materials

Materials include cement, concrete, metal, lumber etc. The size of the project is directly related to the cost. A large-scale project will require more materials.

Labor

Worker wages are an important part of the budget. Generally, labor covers almost 25% – 30% of a budget. So thorough planning is required in this area

Equipment 

Construction projects require heavy and lightweight machinery. It includes both purchased and rental costs.

MAKE ESTIMATIONS SEAMLESS WITH EFFICIENT PROJECT COST MANAGEMENT BY ATTAINING COMPLETE CONTROL OVER ALL THE COST COMPONENTS IN A CONSTRUCTION PROJECT. 

Project Cost Management – In Simple Words

Managing cost is the process of making strategies for planning and managing the budget. In terms of a construction project, it makes sure that the professionals who are handling the costs have complete control over the cost. It reduces the chances of a project going over or under budget. Both of which are a hurdle to the success of the project.

MEP in Project Cost Management 

The MEP systems consist of three of the most important systems in a project i.e. mechanical, plumbing and electrical. MEP Estimating Services plays a paramount role in managing finances. Estimators have to make sure that a project’s resources are being efficiently managed and utilized by creating an accurate budget.

When you are creating a budget for MEP projects it is useful to have technical information about these components. It allows you to make the right decisions to save money and control the quality as well.

Mechanical System 

The mechanical system is responsible for the heating, ventilation and cooling of a building. It consists of:

• Air conditioner
• Thermostat
• Evaporator coil
• Furnace
• Ducts 
• Vents  
• Condenser coil
• Refrigerant pipes
• Motor

Mechanical Estimating Services are responsible for the calculation in the installation, repair or maintenance of mechanical systems. Estimators use advanced software’s that makes the estimating work streamlined and accurate:

• PlanSwift
• Bluebeam
• STACK
• On Screen Takeoff
• FastPipe
• FastDuct 
• RS Mean

Plumbing System

A plumbing system is one of the most intricate systems in a building as it is responsible for distributing water to all of the building. Therefore, an expert must make sure that each single component is accounted for in the cost estimation process. Plumbing system parts include:

• Pipes
• Valves 
• Fittings
• Drainage system 
• Vents
• Ducts

Electrical System

The Electrical systems are complex as it is therefore, extensive planning is important when conducting estimations for its components. Electrical estimating software’s that helps in attaining accuracy are ConEst, McCormick Systems, Trimble etc. Electrical Estimating Services are using this software to get accurate cost estimates. In addition to material and labor costs, they also account for the safety of the system by making sure that the local codes are being followed. 

Electrical system parts include:

• Lightening and fixtures 
• Wires and cables
• Conduits
• Switches 
• Distribution panel
• Circuit 
• Transformer 
• Generator 

Steps for Proficient Management of a Project’s Cost

The following steps lead to efficient management of costs in a project:

1) Effectively Strategize Resources

Professionals must comprehensively estimate future resource requirements. To create a practical resource plan it is necessary to break down the resources based on a project’s size. Thus by doing this, you can determine how many resources will be needed. Below are some pointers to consider when it comes to resource acquisition:

•  Estimate the cost of required resources
• Search for a cost-effective supplier
•  Scheduling of resources
•  Incorporate software for tracking resources

2) Cost Estimation

In a project, cost estimation is one of the most paramount steps as it lays the foundation for a project’s budget. It consists of assigning costs to the required resources that are needed for tasks. For optimal project cost management, certain actions are a must for cost estimation which are as follows:

• Apply extensive cost estimation methodologies
• Breakdown costs based on tasks
• Associate estimated costs to the project 
• Develop a cost baseline

In addition to all of the above, RS Means software can be utilized in the process of creating a project’s cost estimates. This modern software’s possesses an immense pricing database which makes the costing process more easy, quick and precise.

3) Costing and Profitability

It is essential to conduct a cost and profitability analysis. This is a step beyond Project Cost Management as it shows how advantageous a particular decision is. In simple words, this analysis evaluates the cost of something against its return on investment. If the profitability margin is more than the cost then a decision is favorable and should be taken

4) Cost Budget Management

The sum of all the estimated costs makes a budget which is a project budget. Assure that all costs are added to the budget, direct costs as well as Indirect costs. A competent professional also makes sure that a contingency fund is added for any uncertainties that may occur. Budget management is important as it acts as a foundational element for comparing actual vs estimated costs.

5) Tracking a Project’s Cost

Tracking of costs can only be done when there is proper control over a project’s cost. In Project Cost Management, poor cost control can impact profitability significantly. Effective cost control and tracking are done if proper approach and steps are taken which are as follows:

• Detailed Cost accounting
• Task Productivity measurement 
• Measuring financial performance 
• Documenting and reporting each component of a project. 

STREAMLINE YOUR PROJECT’S COST THROUGH EFFECTIVE MANAGEMENT TECHNIQUES WITH THIS COMPREHENSIVE GUIDE LEADING TO BETTER ACCURACY AT EACH STEP

Final Verdict

In the end, Project Cost Management is a pivotal task in any construction. Proper approach is a must when managing a project’s cost. This article discusses and outlines some of the most valuable insights for efficient cost management. In addition to that, it also mentions what factors contribute towards an effective planning and how modern tools are transforming the realm of cost management in the construction industry.