The Foundation to Successful Construction Cost Control

custom cost control in construction

Construction cost control is critical to ensuring that projects are successful. The better handle you have on your costs, the higher the likelihood that a project will be delivered on time, within scope, and on budget — a win for everyone involved.

Budget control is even more important in today’s uncertain environment, as construction pros face new pressures, including labor shortages and rising material costs

Unfortunately, managing your project finances is a major challenge for most organizations, and industry data shows that just 31% of projects come within 10% of the original budget. The issue is even more pronounced in larger projects; according to McKinsey, 95% of megaprojects become delayed or over budget.

Managing construction budgets clearly presents a number of challenges to organizations, but the good news is that there are ways to keep your costs under control. 

The Top Challenges with Construction Cost Control

Why exactly do so many projects go over budget? Below are some of the top challenges that come with managing construction costs.

Lack of Integration Between Systems

The lack of integrations between systems is one of top factors that cause problems in construction cost management. 

Too often, teams handle budgets using separate Excel documents and financial ERP systems — neither of which are built for construction professionals. Stakeholders then have to deal with multiple documents and different systems, which makes cost control even more difficult and tedious. 

Not having a central system for cost management also results in teams working in silos, so there’s poor communication between stakeholders. 

All that results in unreliable response times and convoluted processes involving a variety of vendors, systems, and products.

Using Inflexible or “One Size Fits All” Solutions

Every construction project is different. There’s always a unique blend of participants — owners, architects, engineers, general contractors, subcontractors, suppliers — who bring their own costs and schedules to the table. Because of this, cost is often the lowest common denominator for everything that occurs on a project — from design, quality, schedule, materials, etc. 

Problems arise when you don’t have a cost management system that’s flexible enough to handle the various participants and components in a project. In other words, while you need repeatable systems and procedures, make sure your system has enough room for customization. 

Frequent Changes to the Project

Construction projects are never static; changes that impact costs can happen on a daily basis. Overruns occur when teams fail to forecast, react, and adjust to these changes. 

These cost control issues are often rooted in ineffective management during the early stages of a project — i.e., design and preconstruction. A study published in the International Journal of Innovation, Management and Technology identified “frequent design change” as one of the top causes of overruns. Not having clearly defined objectives and scope leads to an increase in change orders, which results in overruns. 

As such, it’s critical to get teams, costs, and expectations aligned early on in your projects. If you don’t get the design and preconstruction phases right, you’ll likely run into cost issues as the project progresses. 

How to Gain Control of Construction Costs

Now that we’ve discussed the challenges with cost management, let’s look at how you can overcome them. 

The best way to gain control over your construction finances is to have a central cost management system that provides flexibility and customization to meet changing and unique project needs. Here are the key attributes of a solid construction cost management system that keeps your projects running on time and within budget. 

Connected and Centralized Cost Management

A tightly integrated cost management system is essential if you want to get your budget under control. It’s critical that the system that you’re using to record, calculate, and forecast costs is connected to the other related applications that you’re using. Doing so keeps multiple moving parts in sync, eliminates the need for double-entry, and helps teams be more efficient. 

When you centralize the management of all cost activities, you ensure that your construction data is connected and auto-updates across the platform to offer an accurate view of the project’s financial health.

A centralized system also provides a single source of truth, so stakeholders can have one reliable hub for data. 

Finally, a tightly connected cost management system can offer a real-time view of your project’s financial health, so you can make better decisions and forecast costs more accurately. 

All in all, having a cost control system that’s centralized and connects with other construction platforms helps teams achieve more predictability when it comes to cash flow and profitability projections. This, in turn, leads to more efficient projects and a healthier bottom line.

Customizable Structures and Terminology

You want a construction cost management solution that adjusts to your unique processes. So, equip your team with a solution that lets you customize structures and terminology used throughout the system to suit your needs and preferences. 

A robust cost management tool will allow you to rename the tabs to reflect the terminology you use, set up custom budget structures that work with any accounting system and work breakdown structure, and create custom calculated budget columns.

Ideally, you should be able to create multiple project-level markup configurations to apply during the change order process and build a document template library to generate contractors that populate with information directly from the system.

Automated Workflows

Finding ways to increase productivity is critical in construction. Ideally, you want a cost management solution that can help automate manual tasks like elevating an RFI to a potential change order, moving change orders through the approval process, generating contracts, and payment applications with a few clicks of a button. 

It is even better if the solution allows you to improve consistency and transparency of company-defined processes across projects by creating custom approval workflows. Utilizing a decision-based workflow engine, teams can automate the routing of internal approvals for Owner Change Orders, Supplier Change Orders, and Contracts based on specific conditions. 

It’s important to make sure the cost management solution you select not only allows you to automate processes but keeps a detailed log of the items activity for future reference. 

Collaborative but Configurable Controls

Collaboration is important in construction. But in order for teams to effectively work together, stakeholders should be given enough visibility into the project’s costs and progress. 

That said, you don’t want to give everyone the same view and level control. Giving people unnecessary information or too much control can cause confusion or wreak havoc onto your workflows. 

For this reason, you need to adopt tools that can help you manage users and their permissions. See to it that your system enables you to grant or restrict access based on each person’s role. Having the ability to provide “read only” access or features that allow you to hide certain information comes in handy. 

Certain tools can even allow you to configure and optimize each view based on the information most relevant to the stakeholders. For example, executives can view cross-project cost information in a dashboard format to quickly and visually see areas of risk, concern, and general project health.

By having these capabilities in place, you’ll not only be able to bring teammates into the system, but you’ll have the ability to invite owners and suppliers to collaborate, which further streamlines your projects.

Gain Control of Your Costs with Autodesk Build

Getting teams on board a robust cost management system is the first step to improving your budgets and forecasts. Autodesk Build gives you all the tools you need to achieve better cost control. It helps you stay on top of your costs throughout the entire project lifecycle — including tracking change orders, managing supplier contracts and more.

With Autodesk Build, you get a centralized and flexible solution that paves the way for more accurate data visibility and better collaboration. This enables project participants to achieve higher levels of transparency and accountability, ultimately helping keep your projects on track. If interested, please contact us for a demo.

If you’d like to learn more about how to improve your cost control workflows, please download our collection of helpful digital resources on the topic – The Construction Cost Control Toolkit: Take control and improve profitability across all your projects. Everything in this toolkit is yours, completely free. 



Grace Ellis

Editor in Chief, Digital Builder Blog, Autodesk

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