Managing the Development of Building Projects for Better Results

First published in 1981, updated for web presentation, Dec. 2000

Introduction | Principal Parties | Project Plan | Improving Performance
Project Life Cycle | Bar Chart Schedule | Manpower Loading Data
Information Explosion | Final Cost | Design Stages | Cost Effectiveness
Choices | Construction Costing | Value Management | Design Review
Cost of Building Ownership | Practice and Value Management | Summary

Cost Effectiveness

The name of the game of project management therefore is "cost effectiveness." Cost effectiveness may be defined as best value for money. For analytical purposes, this needs to be more closely defined as the optimum trade-off between specific parameters. These parameters include affordable scope requirements, quality including aesthetic value, time to put in place, enhanced production or reduced operating costs, and so on, all according to the type of project and original basic project objectives.

Much of this may be subjective as in the case of assessing aesthetic value or forecasting the future labor cost trends. Yet, it is nearly always possible to make a value judgment in comparing alternatives and the better the project objectives are defined at the outset, the easier this judgment becomes. It goes without saying that the design consultants have a particular responsibility to ensure that their staff and sub consultants also clearly understand project objectives.

When design consultants accept an assignment to produce specifications and working drawings they, and all their support staff, should clearly understand that they are spending money on two different levels. First is the cost of their own design work. Second is the cost of putting the design physically into place. Every line on a working drawing and every sentence or even every word put into a specification has an associated cost downstream. And the cost is committed just as surely as the time is spent in its preparation.

What is not always appreciated by the owner/sponsor is the relationship between the cost of doing the design and the cost of constructing it. The ratio is about 1 to 8 or 10. There is therefore substantial leverage in "getting the working details just right" in the first place. As the Ability to Influence Cost curve indicates, the earlier the point in the development process of "getting it just right", the greater the economy.

The Significance of Project Management during the Design Stages  The Significance of Project Management during the Design Stages

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