Gathering project data: do’s and don’ts
To advance your cost estimating and analysis techniques, knowledge and experience needs to be captured and shared among users. However, this can prove to be quite an effort and gets messy real fast. Here a 3 do’s and don’ts to help you on your way:
– Store cost data in a database: develop and maintain information about prices, labor, productivity and other valuable information of completed projects in a database, accessible globally to all stakeholders. You don’t want to end up in a situation where you lose information when an employee leaves the company!
– Use one basis: a valuable part of cost management data covers information about locational effects on projects. People work together worldwide to gather location and productivity factors in tables to be used in estimating and performance measurement against a frame of reference. This allows better validation and control of your projects.
– Setup fixed structures: fixed breakdown structures, assemblies, and folder hierarchy guard your ability to quickly trace back information, benchmark projects, and evaluate different alternatives. This requires an effort not only by you but also by contractors and vendors that report to you. Agree on the required reporting structures upfront.
– Complicate data, so that only one person understands it and is able to maintain it. Instead, make descriptions of cost elements and activities understandable so that people can easily figure out if they found the right cost element for the scope they are trying to estimate. Choose simple language and keep spreadsheets and data tools as simple as possible.
– Forget to capture technical specs: next to the purchase price, also technical specifications of purchase orders should be captured. You will have no idea about the accuracy of some number without knowing if the previous quote you found in your database matches the specifications of the current design.
– Use cost data that is too old. When reporting an estimate, the costs of materials, services, personnel, etc. are expressed in today’s money. The estimate was built up with data possibly gathered from many historical sources. Prices were indexed and escalated to current and future values to give the most reliable forecast of the project’s cost. Keep in mind that inflation, supply & demand, and currency exchange rates continuously evolve. This can make older costs unreliable. Don’t be afraid to cut in your cost data to keep it relevant.