“To know the future we need to be aware of the past.” This is a very popular quote that is ignored time and again. In the case of cost engineering, cost control and/or cost management it is actually half the story since being aware of the present is equally important. For this example we imagine to be a cost controller caught in the middle between the cost estimator and management.
How does a cost controller predict the future? How could a cost controller make a prediction or forecast of what has not happened yet? Do we need special superpowers? There are really only a few sources the cost controller has available.
1. Wait for information to reach you
2. Go by your own experience
3. Establish a good relation with your cost estimators
4. Go outdoors and see for yourself how your project is doing
5. Become well versed in the Blame assignment matrix (but that won’t help you create better forecasts)
Do's and don'ts for Cost Controllers
Waiting for information is passive and not the way to go. Depending on your skill level, going by your own experience is very valuable. However keeping that experience to yourself is counterproductive, which brings us to point 3: establishing a good relationship with your cost estimator. When you share your knowledge and discuss your closed projects with your cost estimators that will make it so that the estimator gets the insight he needs to create better estimates for which the cost controller receives a better baseline. That in turn results in the foundation of your cost management being more solid. Which means you can incur more blows with your contingencies since you are no longer using them to rectify mistakes but are using them what they are meant for. In turn this means management and owners can use this money elsewhere ensuring more opportunities for you and all your colleagues instead of searching for funds to cover project overruns. The data of all your previous projects is there, go out and get good cost estimating software and cost management software that lets you browse and extract all the metrics you will ever need! To know the future we indeed need to be aware of the past.
Get out
Equally important, and it’s never too late to start this process, go out and live the project. See with your own eyes how the project is doing or at the very least establish a relation with those that do. Forgo the luxurious staff cantina at the home office and eat your lunch with the very people that build the project with their own hands. (Alternatively, you can hide microphones in those cantinas but that is heavily frowned upon in most countries!) What could happen on the work floor that these people are not the first to know? A good cost controller can’t be a desk jockey or a clerk. If you stay in your own office you are only using part of the skills you have. No good forecast was ever created living in your own world staring at those same four walls. All you need to do is be friendly to people and share information. For an internship I once worked with the contractors at the start of the project in the Caribbean sun lifting iron bars, just out of sheer curiosity of what that does to the human body. After a while, there really wasn’t that much going on that I was not aware of. Knowing about what goes on at this very moment is most likely the best forecast tool in the world!
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