Cost Management Using Autodesk Build
By Elizabeth Crofton | Collaboration, Data Management
Tracking costs and monitoring risk while keeping a job on a budget can be one of the biggest hurdles to any building project. Finding ways to do all of these things efficiently makes a huge difference when it comes to delivering a project on time and on budget.
KPMG estimated only 31% of construction projects came within 10% of their budgets. Effective cost control is the solution.
One of the most important efficiencies you can create to best position yourself for good project outcomes is fine-tuning your cost management process. This can affect everything from the bidding process to change order management, your team’s efficiency, and ultimately, your bottom line.
Here’s a look at all things construction cost management, including what it is, why it matters, how to improve it, and how having the right processes in place can set you up for success.
About Cost Management
Importance of Cost Management in Construction
- Tracking costs and monitoring risk while maintaining a budget is one of the most significant hurdles on a building project.
- A cost management plan helps keep a job on budget.
- Effective cost management sets the standard for all project costs and affects all phases of a project including planning, design, estimation, change orders, and specialty contractors.
- Using analog methods of tracking in Excel creates silos and a disconnect between cost management practices, the project’s information, and change order workflow. Silos increase the risk of errors.
- Using a cost management platform and construction management software like Autodesk Build brings all workflows into a single platform to reduce risk and show real-time information about the financial health of a project.
- Setting accurate cost estimates and tracking budgets in real-time help with accurate forecasting and cost control.
- Integrating project contracts into a centralized location makes them easier to manage and view. When these are associated with cost items, cost data also stays organized and accessible.
- Streamlining the change order process with the right tools improves visibility, communication, and collaboration.
- Performing a risk management assessment with business intelligence tools helps with project optimization.
Key Functionalities
There are many functionalities available within Cost Management. Check out this overview video to learn more about them:
Within Cost Management, you can work with tools that help track costs, manage risk, and keep a project on a budget:
- Home – Use the home page to control your project with an aggregated view of important dates in a calendar.
- Budget – Create and manage budgets, main contracts, and budget payment applications to track incoming and outgoing cash for your project.
- Cost – Create and manage contracts, expenses, and cost payment applications to track incoming and outgoing cash for your project.
- Change Order – Work with cost items and follow the change order workflow.
- Forecast – Visually schedule time-based allowances, such as general conditions. It also helps you understand how your budget and time interact with each other.
- Settings – Cost Management is flexible and customizable. Configurable features allow teams to customize the software to suit their needs and preferences. Learn more about setting up Cost Management.
Files, Reports, and Members are central tools for Autodesk Construction Cloud.
How to Improve Construction Cost Management: 6 Steps
There are a number of tools available to improve cost management in construction, including new technologies and platforms, and solutions for every step of the project lifecycle. Read on for six ways you can improve your approach to cost management.
1. Use a construction management platform
Construction management software can help bring cost control workflows like budget and contract management, payment applications, and change orders into one platform, thus reducing risk and providing a real-time look at the financial health of a project. Using connected construction project management solutions (i.e. solutions that connect construction data and processes across a project’s lifecycle, from design through operations) ensures teams always have the most relevant and accurate information regarding costs, no matter if they’re onsite or at the office.
The right construction management solution can play a major role in keeping you on top of project costs in a number of ways. First, it can provide a single source of truth, centralizing all cost data in one place that is easily accessible. What’s more, these platforms often have solutions that allow for flexibility in customizing budget codes, hierarchical build-ups, and segment options.
Another benefit of construction management platforms is increased visibility. Cloud-based project management systems offer real-time access to information on the financial health of a project, allowing team members to view a summary of all budget items and contracts providing a clear picture of revenue, costs, forecast, and variance related to each item.
Finally, construction management platforms provide security, allowing teams to set user permissions, and ensuring only the right professionals have access to necessary project information.
2. Set accurate cost estimates from the start
Estimation is integral to a project’s success, as inaccurate estimates can cause you to lose competitive bids, eat into profit margins, and even damage your reputation. There are a number of challenges to creating accurate estimates, including having multiple sources of materials, and the massive amount of time it can take to account for every last project detail.
Still, there are many ways to improve estimates through model-based estimation platforms. These platforms allow for an estimation process based on a 3D environment while offering the flexibility to make changes to project details in real time. This translates to increased efficiency and accuracy in the estimation process, setting you up for successful cost management and starting a project off right.
3. Track budget items in real-time
Having real-time insight into the construction budget is key to staying on track financially over the course of a project. A number of connected construction tools can help you visualize cost-related risk by monitoring and tracking budget items and factors affecting cost as they come up, providing a clear picture of the financial health of a project. This will help with both accurate forecasting and cost control throughout the entire job process.
4. Integrate project contracts
Staying organized and on top of multiple spreadsheets, folders, and documents to manage all trade contractors and suppliers can be both stressful and time-consuming, not to mention extremely inefficient. The right cost management tools can help you more efficiently create, edit, and view contracts in a centralized location. This also means that, because all contracts are automatically associated with cost items, teams can easily view a history of cost items by the supplier, keeping both contract and cost data organized and accessible.
5. Streamline the change order process
The nature of change orders is to shift the course of a project in often unforeseen ways. This inevitably leads to cost adjustments that can sometimes be difficult to manage. In order to best position yourself for optimal cost management, the change order process must itself be optimized to ensure your project is staying on track, even when changes come your way.
Streamlining the change order process starts with choosing the right tools to manage upstream and downstream workflows to create clear accountability and ensure nothing slips through the cracks. Cloud-based platforms can help improve communication, visibility, and collaboration throughout the change order process, and ensure that teams have all of the data they need to make cost-effective decisions as a project takes a new course.
Leveraging a connected construction platform keeps your team organized and ready to respond to change orders at any phase of a project. This will help project teams control costs and confirm all changes are accounted for and effectively managed, allowing you to maintain a positive cash flow, reduce risk, and maximize profits.
6. Conduct a risk management assessment
Understanding and preparing for budget risks is vital to proactively managing costs throughout the course of a construction project. The implementation of business intelligence tools is on the rise to serve this very purpose, allowing project managers to identify cost and budget risks before they become major issues.
Business intelligence tools work by putting data at the center of a project, and transforming this information into intelligent solutions for project optimization. For example, tools like Construction IQ include built-in machine learning and AI functionality that permeates across a construction management platform to identify high-risk issues that affect costs, schedules, quality, and safety.
INDUSTRIES: Architecture, Buildings, Civil Engineering, Civil Infrastructure, Construction, Infrastructure, MEP Engineering, Structural Engineering
