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07thJanuary
Important competencies for a cost engineer

In a world where technology becomes even more challenging, projects get bigger and competition fiercer, the profession of cost engineering gets more and more important. As a cost engineer, you are responsible for finding the optimum balance between costs, quality and time in order to achieve the maximum potential profit for every single project. Considering the various aspects a cost engineering has to take into account, he or she requires a lot of different competencies. In this article, we will highlight some of them.

The international association of cost engineers (AACE) defines a cost engineer as “an engineer whose judgment and experience are utilized in the application of scientific principles and techniques to problems of estimation, cost control, business planning and management science, profitability analysis, project management, and planning and scheduling”. Hence, the cost estimator is involved with all the members of the project team throughout the entire project.

Because the cost engineer is working with all those different disciplines and different aspects of a project, various competencies are required to do this job, but what would be the most important?

Based on the Society for Human Resource Management (SHRM) and our own experience, the following table lists the competencies which cost engineers must possess in order to successfully perform their job. 

General capabilities

Cost engineering involves a lot of working together with different departments, setting priorities and making choices. It also needs to follow strict rules and guidelines to ensure the same principles and techniques are used throughout an organization;

  • Communication
  • Planning, organizing, delegating
  • Decision making
  • Teamwork and relationships
  • Quality, follow procedures, support change, accuracy
  • Leadership, role model, mentoring, training

Estimating skills and knowledge

  • Reading of and quantification from engineering document
  • Defining of scope
  • Usage of breakdown structures
  • Obtaining / using cost data and vendor quotes
  • Data analysis & benchmarking
  • Labor productivity analysis
  • Normalization (inflation, metallurgy, location, etc.)
  • General factors and ratios
  • Equipment factored and capacity factored estimating

Cost control skills and knowledge

  • Cost control, budgets and forecasts
  • Planning / scheduling
  • Progress measurement, earned value
  • Change management

Looking at this table, it can be concluded that a broad spectrum of skills are required; from so-called alpha skills (communication, leadership) to beta skills (engineering, accurate accounting). It’s therefore no surprise that being a great cost engineer is largely based on experience. It is also a reason why the cost engineering profession would benefit a lot from proper training, both on-the-job and in a classroom. The least you can do as organization is ensuring a cost engineer isn’t constrained by wrongly implemented processes or unnecessary bureaucracy; after all, they’re invaluable to your organization. 

Something to add to this story? Contact us at contact@costengineering.eu or use the contact form.