Good Cost Code Planning can Save You from a Project Disaster
A few weeks ago, a peer of mine and I had a working lunch with another colleague. A highly experienced cost engineer professional, well-versed in the challenges of project cost control, and well-respected in her industry. With the three of us all having our feet in the project cost management world – our colleague from a practical perspective and we from the technology perspective – the discussion inevitably turned to the challenges of effective project cost control. For us on the “solutions” side, we wanted to hear her take on the golden question - “What is essential for managing and controlling project costs effectively? Is it accurate estimating? Is it complete and timely capture of actual cost data? What about proactive change management? And what about the effective use of earned value management in project controls?” Now, obviously all of these are vital to controlling construction project costs and providing insight into just how well a project is really performing; so we were very interested in her perspective. So, imagine our surprise when our esteemed colleague put down her fork, turned to us and said, with absolute conviction – “It starts with the project cost codes.” Cost codes are essential to providing the correct aggregation of actual project cost information to its correct place in the budget; which then provides project management and cost engineers with accurate budget vs. actual reporting required to run a project to a successful conclusion. Makes total sense. And with the provision of codes just about everywhere in most construction project management software solutions, using cost codes effectively in a project shouldn’t be much of an issue. Right? But, as she went on to elaborate, it became
