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Importance of Cost Management in Construction Projects

Construction business and commercial management are inseparable. Commercial management is the application of skills to maximize business potential by ensuring the successful management of the projects’ finances, procurement and all processes that can impact upon profit, timelines and quality output.

Here at Akah Construction Company Limited, the department saddled with this role of commercial management is the commercial operations department. The commercial operations unit is an integral part of the project operations team. Our commercial operations team is made up of young seasoned and vibrant professionals with basic training in Quantity Surveying. Cost management as a skill is not gender sensitive, hence in our team, we have as many female Quantity Surveyors, as the male. Our role is basically centred around cost management of our construction projects.

Cost management is the process of estimating, allocating, and controlling project costs. The cost management process allows us as an organization to predict the future expenses of our projects and reduce the chances of budget overrun. Cost management is a continuous process throughout the lifespan of our projects. Planning, communication, reviews, value engineering, and decision-making are regular features of our cost management procedures.

Cost management, though quite complex in nature, can be broken down into four (4) processes :

1. Resource planning.

2. Cost estimation.

3. Cost budgeting.

4. Cost Control

Cost Management is important in construction projects because it sets a baseline for project costs and helps in predicting the expenses and revenue of the project. This in turn would help eliminate losses and over-budgeting. Our cost management procedure is CKL follows world best practices and has proven effective in managing our construction projects.

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    Greetings! Very useful advice in this particular post!
    It is the little changes that will make the largest changes.
    Thanks a lot for sharing!

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