Effective Cost Estimating Strategy in Construction Project Management

Effective Cost Estimating Strategy in Construction Project Management

Effective Cost Estimating Strategy in Construction Project Management
 Effective Cost Estimating Strategy in Construction Project Management

What does it take to have accurate estimates when it comes to Construction Project management?  
To have a successful project, you have to start from the cost management.  Let’s put it like this.  You won’t get the final picture of the project until you accurately calculate the whole cost.  
What construction managers do?  
They tend to find a shortcut and skip this step.  That’s totally wrong.  This is one of the biggest reasons why they suffer big losses and have unsuccessful projects.  You, as a construction project manager, need to establish a cost estimating strategy.  That’s a must. 

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If you ask other managers who “play under the same rules” how they do it, one of their key features would be accurate Construction Management Cost.  It’s like going in the market. You have accurately calculated the cost at home.  You know exactly how much money you will spend and you can already predict the final outcome.  You get the point.  Now, how to develop a good cost estimating strategy?  Three simple steps will lead you to the most accurate cost estimate.
  1. Initial Rough Estimates
  2. Intermediate Estimates
  3. Final Detailed Project Estimate
All three are designed to lead you through the whole process.  By incorporating them, you will satisfy the cost management with all the knowledge you’ll get while designing the strategy – mixed with the knowledge from all the previous projects you’ve handled.  Let’s start with the first step. 

1. Initial Rough Estimates

You already know what’s in this step.  This step is developed during the first phase.  It’s largely based on all the information provided in the high-level scope along the info from previous projects the manager dealt with or similar projects he has heard about.  This first rough estimate needs to be presented as a part of the Concept Proposal.

2. Intermediate Estimates  

When the planning phase is ongoing, the analyst and project manager both develop the customer’s review and approval.  This will later define and clarify the project estimates.  Furthermore, more details will be provided to the project management team.  They will help the project manager with the estimates.  After this, the project manager is creating a detailed project schedule.
It will contain:           
  • Duration and effort for every task          
  • Assignment of resources for every task          
  • Complete and detailed cost management of the project effort
We finally got to the final step.
Last but not least:

3. Final Detailed Project Estimate  

These detailed project estimates allow the project manager to refine some of the tasks and add the whole estimation of costs.  This includes hardware, software, equipment tests and additional space for the project team.  When you as a project manager get to this point, you will be allowed to update the initial estimates created for the Concept Proposal.  You can make replacements to reconcile the more accurate total project cost info.  This new estimate needs to be communicated to the project stakeholders. 

Over to you now  

You can definitely try this strategy today and see if it is right for you. Also, one of the main things here is the fact that you should constantly be on a lookout for improvements or add ons to this strategy.
You can do this by having a cost control during the execution. To have a good project management tool and be able to have the control, we invite you to try our construction project management software AproPLAN. 
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The Author: Jim Hees
                                Jim Hees
Co Founder at Smovin, We want to make real estate management simple
Exclu: la start-up Smovin lève 1 million d'euros-  https://trends.levif.be/economie/high-tech/numerik/exclu-la-start-up-smovin-leve-1-million-d-euros/article-normal-1240207.html  - How Sophie Van Laer manage easily and by herself her properties - https://www.youtube.com/watch?v=0a0hcIS-DLY  - Join our team and apply on our Welcome To the Jungle page ! -  https://www.welcometothejungle.com/en/companies/smovin

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