Benefits of Committed Cost

Welcome to CommittedCost.com. We were born out of a cost tracking problem that existed until we resolved it. The solutions we offer speak to the need to track costs on projects live and enable our clients to present those costs in various ways.

Some benefits of our solutions enable our clients to:

  • Roll their costs up into budgets
  • Slice and dice costs to improve accuracy
  • Identify early warnings for project execution problems
  • Track scope changes
  • Warn their superiors well in advance of cost overruns; and Predict final costs

The cost controlling problems were common, obvious and simple yet remain a challenge to even the best site inspectors in industry. It was further particularly difficult to explain the difficulty in project cost control to stakeholders from other disciplines from the organization such as Human Resources, Accounting and IT.

The realities of the construction industry also provide hurdles to costing. On an industrial project the person who represents the interests of the owner/operator will have the title of construction consultant, site inspector, site superintendent or something similar. For the most part they are people that have often rose through the ranks as accomplished tradesman. They are often welders, pipefitters, electricians, instrumentation techs and so forth. Their responsibilities include:

  • Government Inspection- Liaison with all government inspection agencies that perform site visits and audits
  • Quality- Ensure the project is being constructed according to the design specifications and good industry practices. They also ensure all tradesman are up to date on all safety and industry courses relevant to their specialization.
  • Safety- make sure all safety procedures and good construction practices are followed
  • Environment- make sure all construction materials are dealt with properly with associated documentation
  • Operations- coordinate all construction activities with operations to ensure everyone is aware of all issues
  • Scope changes- all issues identified are run through the site inspector either from the field to engineering or vice versa. They are the critical person to administer, organize and in many cases challenge the changes.
  • Construction efficiency- it is the responsibility of the Site Inspector to make sure the project is executed. They are constantly monitoring the morale of the labour, staffing levels, major equipment delivery and participating in management decisions to ensure the right steps are being made to minimize bottlenecks and rework.
  • Scheduling – They must manage to a schedule, report progress and project out key dates into the future. Often times a project must sync up to other events so scheduling is critical.
  • Construction cost management- whether the project is a bid project or an hourly project the Site Inspector has key roles administering both contract types.

These are tremendous responsibilities and often involve a tremendous workload.. Now, having been promoted to a managerial role they have to learn how to manage the other trade disciplines other than their own and all of the responsibilities mentioned which go along with each.

The site inspector therefore is the key point man for all of the other stakeholders involved in projects including, but not limited to:

Owner/Operator: this is the owner company who is responsible for executing the project on behalf of all of the other owner partner companies. Often times this will be the largest percentage owner of the project or an owner who has particular expertise in executing these types of projects. They are responsible for the business drivers of the projects as well as managing the operation of the project once it is turned over to operations by construction.
EPCM: or Engineering, Procurement and Construction Management and they are typically an Engineering firm. They will execute and manage the design, the contracts, the procurement, the construction and assist in final commissioning with operations.
General Contractor: typically will have a large work scope themselves (often civil or mechanical in nature) and also be responsible for many Sub-Trades and Sub-Contractors
The typical project is rarely commits itself to only 5 days a week and 8 hours a day. Generally these projects are away from the site inspector’s home causing significant commuting to and from a hotel each and every day. It is very rare for a day to be less than 10-12 hours in this role.

Stress, fatigue and a strained family/personal life due to the demands of this role are a reality that we all need to understand and face. Even the smoothest projects can leave an inspector burnt out. And when they are not smooth things can, and often do, go very wrong.

As pressures build due to weather, scope changes, manpower and schedule it’s understandable that priorities in the mind of the Site Inspector would shift to what is urgent, but giving it less attention doesn’t mean costing becomes any less important. The approximate order in which matters get prioritized by the typical site inspector:

  1. Safety;
  2. Environment;
  3. The operational/ functional goals must be met. It must “function” per the initial project goals or the Design Basis Memorandum;
  4. Schedule;
  5. Construction efficiency;
  6. Operability
  7. Reliability- Unfortunately it can be difficult to spot all issues on “paper” and often times issues are not spotted until people can “kick the iron”; and finally they then consider
  8. Cost Management

Of course most Site Inspectors will prioritize cost management and reporting lower in the face of competing pressures. The reason for this is that basic human nature for most competent people is that they deal with what is urgent and, time permitting they’ll deal with the rest later. Unfortunately, as site managers often find out the difficult way, time doesn’t permit.

We might justify the difficult task we are asking them to perform by saying to ourselves “Yes but look at their day rate!!” They should be able to execute all of this with a smile!! But that would miss the point all together… Despite the fact that we are aligned in our priorities the fact remains that our key guy in the field has run out of gas and energy by the time he gets to the point that critical to success… Cost Management

The solution is to provide Site Inspectors with a fast and easy system for them to enter data, provide roll-ups and drill downs to analyze data for head office and to spot errors. We must appreciate their reality that they only has a few minutes each day to do this. If it takes longer than a few minutes it gets pushed off to later and issues pile up. Committed Cost is dedicated to relieving your stress by facilitating the important yet daunting task from the site inspector’s to-do list of tracking costs and progress and submitting them each day to head office.