How to gather and benefit from the cost data
To advance your cost analysis and cost estimating techniques, you need knowledge and experience to be captured and shared during and after the projects. Though, it is not always possible to handle this without spending a lot of time and effort on it. Here are some tips to help you on your way:
1. Prepare a cost database with historical data
You would want to keep information about prices, labour, productivity and other valuable information of completed projects. Therefore, develop a database with a consistent folder structure and categorization/labeling of cost data. You should pay attention to make the database easily searchable and maintainable by different users.
2. Use breakdown structures
An important way of revealing your project’s performance is to use breakdown structures, such as Cost Breakdown Structure (CBS) and Work Breakdown Structure (WBS). Breakdown structures can be used to generate all kinds of metrics and benchmarking which would allow you to evaluate different alternatives. This requires an effort from you, also from the contractors and vendors that report to you. The required reporting structures should be agreed upon openly.
3. Use recent cost data
A valuable part of project data covers the costs of materials, services, and personnel. The estimate was built up with data possibly gathered from many historical sources. However, when reporting an estimate, these are expressed in today’s money.
Prices were indexed and escalated to current and future values to give the most reliable forecast of the project’s cost. You should always 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 data to keep it relevant.
Conclusion
As you can see, developing data is a multi-disciplinary task and doing it right takes time. It often needs to be organized and managed besides the project with the right people. Yet once you set it up, it would certainly advance your cost analysis and cost estimating techniques.
If you have a question, or want to know more about CESK data, please feel free to contact us.