Project Cost Management - Report Example

Project cost management of the of the Article Summary The primary purpose of this study is to learn about the global challenges and issues faced by officials who belong to the profession of project cost management. The profession of project cost management involves several job variants such as cost engineering, quantity surveying as well as project control and cost management services. The article highlights one strong point by stating that the profession of project cost management is not given much recognition when compared to more esteemed professions such as engineering and architecture. This is precisely because of the fact that not many people all over the world are aware of the value that the project cost management profession adds to a particular project. The study also highlights that the international construction industry has a history of projects which overran both in terms of time as well as cost. This highlights the necessity for an enhanced approach towards effective project control and cost management. With regards to the facts that have been mentioned, this scholar, in his paper, has endeavoured to review literatures in the field of global project cost management issues as well as the researches undertaken by number of professional cost management associations all over the world. The researcher caters to stress the need for the worldwide recognition of the project cost management profession as well as the development of international standards in this profession. This has been done on the basis of strategies and recommendations provided by global organizations such as the World Bank and the UN with the underlying aim of developing ISO cost management standards as well as the development of various project cost management certification program, thereby, enhancing the professional standards in mostly developing countries. Key learning points It is indeed true that the profession of project cost management is not internationally recognized which in turn leaves no scope of development for personnel who choose to work in this profession. Moreover, given the fact that there is no common definition of this job type, not much people are aware of the aspects of this profession (Smith, 2014). The profession of project cost management is known by different names in different countries (for example cost engineering in the Americas, quantity surveyor in the Europe and Asia) and therefore lacks a global identity. There is a hue disparity in the way project cost management is carried out in the developed countries such as the US and the US when compared to the way it is done in the developing countries (Flyvbjerg, 2005). This is precisely because of the fact that there is no internationally recognized standard or benchmark for the work that is carried out in project cost management profession. That is why; quite a lot of projects (mainly in the construction industry throughout the world) have reported significant cost overruns (Flyvbjerg, Holm & Buhl, 2003). For example, according to Kenny (2010) nearly half of all the road projects in India have project cost overruns of more than 25%. Other examples include Boston’s central tunnel project, the Sydney Opera House project, and the Suez Canal project all have been reported with project overruns. The main reason behind such overruns has been largely due to the fact that majority of cost management responsibilities are undertaken by projects managers, engineers and architects (Li, Wang & Zhang, 2014). Specialists are not recruited for this kind of job which in turn deteriorates the quality of performance delivered. Lack of international identify has been the major reason behind such crisis (Memon, et al., 2014). Relevant statement to the session The facts that have been highlighted in the article are absolutely relevant to the situation that persists in the Middle East, particularly in the UAE. Professionals who are involved in project cost management operations do not have much recognition. This is precisely because of the lack of a pre-defined standard of service that is internationally recognized. Intentionally recognized organizations such as the UN, the World Bank have joint their hand in order to standardize this service in order to make sure that this profession has a global identity. In order to spread awareness of this job type the international authorities have considered the development of certification programs that will enable them to standardize the aspects of this service and make an universal benchmark that needs to be followed while undertaking project cost management responsibilities. The underlying aim of such certification programs as well as development of international standards is to make sure that the services provided within this profession are of superior quality and recognized all over the world (Potts & Ankrah, 2014; Smith, 2014). Critical analysis Given the fact that there is no internationally recognized standard for project cost management services, the best thing to do would be to follow that best practices that are conducted throughout the world. For example, it has been seen that the profession of project cost management is very firmly established in the US and UK, therefore it would be wise for organization where I work to follow the standards that have been set in this industry. Moreover, given the fact that the projects that my organizations undertake are very complicated in nature, it becomes extremely important to have expert project cost managers in places rather than getting the work done by project managers, engineers or architects in a generic manner. By doing so, the organization will reduce any possibility of cost overrun which has been trend in organizations like ours. Another example of a company which has often been reported to having difficulties in project cost management is the Alzakary Group Ltd, which is a construction company based in Saudi Arabia. Companies like these often resort to the use of information technology application in order to have an estimate of project cost and durations instead of relying on human inputs. We can also adopt this mechanism and train individuals to conduct project cost management through the use of such web based applications thereby reducing a lot of human effort as well as errors. Practical implications As far as a new start up is concerned, their strategy behind project cost management will depend heavily on the nature of projects that they conduct. If they are relatively simpler in nature, the work can be done in generic manner by project managers or engineers who have an elementary level knowledge about project sot of management. On the other cost management of complex projects have to be done by experts which would require the company to recruit a highly skilled personal. As far as standards are concerned, since there are no internationally recognized ones, the company can follow the best practices set by American and British project cost managers given the fact they have proven to be very successful in their respective field. Moreover, start up companies can also resort to the application of fundamental instructions provided by international authorities such as the World Bank and the United Nations. Certifications programs can also be developed in order to train project cost managers effectively which in turn will actually internationalize this field of work. Learning reflections The review of this article has enabled the researcher to have a holistic view of the global issues and challenges that are being faced by professionals who are working as project cost managers. This profession is currently suffering thorough a global identify crisis which in turn has limited the scope for development of this profession. The researcher was also able to learn that this profession has several definitions as well as no internationally recognized service standards all over the world. That is why, it has been seen that projects are often reported having cost overruns. The researcher was also able to learn about the recommendations and strategies set forth by international authorities and standard setting boards which necessitates the development of international standards and certification program in order to spread the identify of this project on a global scale. References Flyvbjerg, B. (2005). Policy and Planning for Large Infrastructure Projects: Problems, Causes, Cures. Retrieved from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2278256 Flyvbjerg, B., Holm, M. & Buhl S. (2003). How common and how large are cost overruns in transport infrastructure projects? Transport Reviews, 23(1), 71-88 Kenny, Ch. (2010). Publishing Construction Contracts and Outcome Details. Retrieved from http://elibrary.worldbank.org/doi/pdf/10.1596/1813-9450-5247 Li, A. M., Wang, G. Q. & Zhang, J. J. (2014). Logistics Cost Control of Railway Construction Projects Based on Material Classification Management and Material Supply Plan. Applied Mechanics and Materials, 505, 399-404. Memon, A. H., Rahman, I. A., Abdullah, M. R. & Azis, A. A. A. (2014). Factors affecting construction cost performance in project management projects: Case of MARA large projects. International Journal of Civil Engineering and Built Environment, 1(1), 30-35. Potts, K. & Ankrah, N. (2014). Construction cost management: learning from case studies. London: Routledge. Smith, P. (2014). Project Cost Management–Global Issues and Challenges.Procedia-Social and Behavioral Sciences, 119, 485-494. Read More