Cost  management helps to find the right price/performance ratio

26. 6. 2023
Cost  management helps to find the right price/performance ratio

Do you have a building project in mind and need a clear idea of how much it will cost? Is it worth it? Or you’ve already built a lot, but you don’t have experience with a specific building yet, or you lack a complete overview of the latest price developments. Need to know if you can fit into the approved budget? That’s what a service called cost management is for.

How does it work?

The price of materials and work is one thing, the price of the whole work is another. Investors and developers come to us both with a plan in a material study, where only the areas of individual floors and the height of the building are shown, and with a more detailed study or documentation for a building permit. It is up to us to prepare a relatively accurate calculation (with respect to the given level of documentation).

Most of the construction we do is for commercial developers or cities and they work with an approved budget. Logically, they are interested in whether they can fit the project into the budget.

The magic of the service is that we can calculate the cost of the project in the early stages of the study and tell if it’s in or out of the set budget. This, of course, signals that the project should undergo adjustments before moving to the next stage.

Going further – cost management is not just about budget

Not only do we identify the financial problem, but we move on. Cost management is not just about the construction budget – a lot of information is missing in the initial documentation, so the cost manager must have overlaps into related professions. This means knowing something about the development brief, design, statics, fire safety solutions and so on. It is thanks to our wide range of knowledge that we can come up with cheaper solutions and steer the project in that direction.

Plain and simple – the cost management team in cooperation with the architect can find the right ratio between price and performance, does value engineering (i.e. optimizing the technical solution in order to reduce the price), looks for other suitable technical solutions, offers alternatives.

A typical case – we tender a project and find that we are 10-15% over budget and the client has a building permit. In the tender documentation, the technical solution is given and we can find savings there, but the investor has no choice but to retroactively pay for the change in the building permit.

When to request the service of the pricing department?

The process of creating an effective design starts at thestage of creating a material solution and ends only at the moment of completion of the construction. However, the project is best shaped from a cost management perspective at the initial stage. Once the material solution is fixed in the planning permission documentation, the parameters and rough outlines of the building are embedded. Of course we can move it, but who would like to change the already processed and allowed solutions…

The graph below shows the degree of influence over time.


Therefore, take advantage of our pricing department at the earliest stages of the project. There, we can process cost estimates and confirm target budgets, or point out inefficiencies in the solution.

Want a more efficient and cheaper project?

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