Cost Management process in construction projects

Cost Management process in construction projects

The estimation of finishing time and final project cost is one of the fundamental actions in project management and of a high importance. Correct prediction of time and cost can provide the possibility of corrective actions for the project manager. In our country, considerable amounts of money is spent on construction projects under the titles of development, non-development and private projects. But, due to various problems, these projects are usually completed with costs and durations beyond planned. Of the causes of this delay in completion of the projects and also expenditure of higher costs we can refer to problems such as misrecognition of the work, wrong estimations of the required resources and costs to complete the work, weakness in project’s cost performance control and overall weakness in the project’s “cost management system” and to some extend unallocated budget to the project. Applying cost management processes as one of the main fields of project management knowledge plays an undeniable and important role in effective and efficient project management. In this research, cost management and its processes is first explained and some examples of construction projects will be made and operation, interaction and the relationship between the parts of this system will be measured through earned value and value management.