Earning a PMP credential demonstrates to employers and colleagues that an individual has a solid foundation of project management knowledge and experience. Holders of the credential have successfully demonstrated their competence in leading and directing projects.

The PMP certification is one of the most important industry-recognized certifications for project managers. Globally recognized and demanded, the PMP demonstrates that you have the experience, education and competency to lead and direct projects.

You can find PMP certified Project Managers in nearly every country and, unlike other certifications that focus on a particular geography or domain, the PMP is truly global. As a PMP, you can work in virtually any industry, with any methodology and in any location.

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Let’s take a look further on their differences:

• Mitigation Plan:
  When you want to avoid certain risk from materialised, it is imperative for you to come out with your plan to either mitigate (reduce impact or likelihood or both) the risk or to prevent the risk totally (100%) in the risk register. Most of the time, you will try to mitigate first, before the risk event happens, since prevention is quite impossible.
  
  For example, if you are an IT vendor who is planning to conduct UAT with your client’s participants, there is a possibility that the network connection between everyone’s laptop and the tested server might be accidentally blocked due to blocking at client’s firewall or in any other nodes. This will cause delay in the project delivery. So, to mitigate this problem, you need to conduct a meeting with client’s Project Manager and IT Admins to ensure that planned UAT session is being informed earlier and the connection is properly established at least 2 hours prior to the UAT session, with the hope that there is no network problem during UAT.

• Contingency Plan
  Contingency plan is needed when the mitigation plan fails to solve the expected risk and the risk has turn into an issue. It is just like the back-up plan for the mitigation plan.
  
  For example, after having a meeting with client’s Project Manager and IT Admins, you expect that the UAT will run smoothly. However, during the UAT session, after getting confirmation from the client’s IT admin, all participants’ laptops are still not able to connect with the server. Something might have gone wrong. Luckily you have discussed about Contingency Plan with the client’s Project Manager and IT Admins in the same meeting. In this case, both you and client’s admin are well prepared to have a joint troubleshooting session within one hour, to detect and solve the problem.

• Fallback Plan:
  Fallback Plan is actually the contingency plan for the previous contingency plan.
  
  For example, of the joint troubleshooting session is still not able to solve the network problem, then, based on your Fallback plan agreed with the client’s PM and IT Admin, you will have a UAT session with your client’s participants at the Data Centre instead, where the server is located. At least the feature and functions of the software can be tested first while solving the network problem. In certain occasion, you can have more than one Fallback plan for a certain risk.

• Work Around:
  Work Around is an activity that you have not planned before in order to mitigate or solve any unknown risk (risk which is not even in a risk register at the first place) that has become issue. Another word for this is Fire Fighting. Work Around or Fire Fighting must be minimized as much as possible in a project since it uses a lot of resources and susceptible to error.
  
  For example, when you decided to conduct the UAT session in the Data Centre due to unsolved network issue, suddenly you find that the software installed in the server, is not acting normally, due to unknown persistent bugs. Since this is not identified in the risk register before, therefore you have to come out with Work Around plan to solve the problem to avoid upsetting the UAT participants. Then immediately you call up your expert in the office to come down to data centre urgently, to help to solve the bugs. In this emergency case, everybody needs to give priority to solve problems that can impact the project baselines.

The differences must be well understood so that you would be able to communicate effectively with all stakeholders. This can help you and the project team to formulate the risk response together in the holistic manner, with the support of the relevant stakeholders.

Rosli Bakri, PMP, PMI-RMP, PRINCE2

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During the project communication and stakeholder’s engagement process, we could see how these people react or perceive towards these various risks and the reaction is called Risk Attitude.

Risk Attitude can be categorized into 3 major types which are:

1. Risk Seeker
2. Risk Averse
3. Risk Neural

Risk Seeker, as the name suggests, is a person who are looking forward to involve themselves in a risky works or endeavours, which they believe it will produce more rewards and benefits to themselves. We could see this behaviour in the Small and Medium enterprises business owners, who are specialized on a certain area and they are willing to make decision faster in order to grab opportunities, despite the trouble and risks they have to go through. For them, risk is just a tool for them to make money. And they are less fond to take a look on the risk details but faster in making a move.

Risk Averse, or we can also call Risk allergic, is a person who don’t want to be involved in any project, work or endeavours that they are not familiar with and they don’t really seem wanting to try out new things. For them, maintaining status quo is important for the survival of the organization and they don’t foresee any rewards produced by taking any risky activities. Hence, they will try to avoid it as much as they can. This can be seen in the mission critical operation team, who are really averse in making changes or revamping their operational systems. For example, making significant changes in Banking Infrastructure system in a short time frame, of course will trigger enormous objection from the operation manager.

Risk Neutral, on the other hand, is a person who are at the middle of those extreme two cases. This person will evaluate a project or business endeavour by comparing its Pros and Cons and will analyse the risks by looking into the opportunity that they will receive versus the trouble that they will have to endure. This person will have more objective attitude in comparing the opportunity they will grab versus the threat that they have to manage. Sometimes they grab the opportunity and sometimes they just let it go. This group of people is the majority among these three categories and they usually at the middle management level and among senior managers who are scattered around Small, Medium and Large Enterprises. They will not reject any business proposals abruptly, instead, they will ask it to be presented for further deliberation.

These are the major 3 categories of Risk attitude. It is an important concept for you to understand if you are planning to take the PMI-RMP exam. As a project manager, you need to analyse all the project stakeholders risk attitude starting from in the initiation phase and document it in the Stakeholder register. With this list of stakeholder register, you need to strategize how you can manage those people with various risk attitude by giving emphasis in the stakeholder engagement plan. The main objective of having stakeholder engagement activities is to make sure, the risk averse stakeholders are always confident with the outcome of the project and they are willing to support the project activities when needed.

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Therefore, being in managerial position in the current world, Project Managers need not only to focus on how tasks need to be properly executed and who are responsible to execute them, but also must have the ability to influence and to lead people so that they know what they need to do, why they need to do it and there are convinced that they are in the right directions. This is actually another skill set that the Project Manager should have while having the normal technical management skills. This is called Leadership. The art of being a leader. The way of how you are going to influence people’s emotion so that they can follow your plan or your aspiration. It can be done by using direct instruction, persuasion, engagement, motivation, be a role model and etc.
The table below shows the differences of roles of Leader and Manager in an organization:

All in all, once you are appointed as a project manager in an organization, it is imminent that you need to improve your leadership skill from time to time so that it can help you to manage stakeholders’ expectation and requirements from various backgrounds. Leadership is not a skill that you are born with. It is a skill that can be honed through experience, training and by emulating other people’s leadership approach. Management and Leadership skills are a great combination for a Project Manager. It is a stepping stone for ascending to the next level in your career.

Read More: Design Thinking Course

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Now, the middle manager or an SBU might want to show their great pro-activeness in coming out with certain business ideas and they eagerly want to realize it soonest possible without thinking the impact of the stakeholder engagement. When that initiative is translated into a project, some other supporting functional units or SBUs might not aware of the existence of the project and they might find that the project has competing resource needs and competing business directions, as compared to their own existing projects.

As the result, the project manager and project team will be going through a tough time to move forward in the project and to get resources from other SBUs or functional units. A lot of their time will be wasted in arguing, convincing and re-planning activities and this will demotivate the team members a lot.

Based on PMI framework, any project must be approved by using the proper project governance process. All business initiatives or strategic plans that span across functional units, must be presented first in the company’s board meeting or leadership team. If the idea or initiative has been approved, further analysis needs to be done in pre-project works phase. In this phase the business case and benefit management plan must be presented and further approval by the management team is needed.

At the end of the day, if the company’s management team agrees to proceed with the project (after further deliberation, project prioritization process and Project Charter development in initiation), then the whole project phases can be implemented easily and the resources can be gathered easily from other supportive functional units. That’s the power of top-down approval process. This is a healthy environment for the organization to survive in this never-ending technology evolution era.

Even tough this is a basic knowledge for most of the project management practitioners, I can see that there are still a habit from middle management team trying to bulldoze the proper project business governance, just to satisfy their immediate objectives. This has more significant impact in the large corporation and it needs to be avoided.

*If the you are the decision maker for your department and the project or initiative is only using your own department resources, then that should not a problem at all.

Share your thought on this as well..

Source: https://www.linkedin.com/pulse/why-you-need-top-down-approval-mohd-rosli-mohd-bakri-pmp-prince2/

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Concentrate on making communication effective: see if your team, your managers and your users can answer questions you ask them about your plans. If they can, then you are succeeding. If not, then you may need to try something different.

Be aware that typically you only remember 20% of what you hear, 30% of what you read, but about 50% of what you both hear and read. Thus you should try to have both written and oral communication together: always write a confirmation of a discussion, telephone call or meeting, and whenever practical follow up a written communication with a verbal clarification. This is particularly important if your team has a mixture of first languages, or widely differing communication skills. It’s also useful in resolving disputes, and essential when working with external suppliers.

In written material, make sure that the structure is clear so that people can refer to it more than once – they may need to try to find the 50% they haven’t remembered! When you’re dealing with your users this is very important – the style of communication may be different but the rules should be exactly the same.

Make the most of meetings. Make sure every meeting has a clear agenda and objectives. Use them to build joint understanding of the problems and objectives, and to reach a consensus about the way forward. Do allow constructive discussion of relevant topics, but don’t allow your precious time to be chewed up by arguments or technical discussions between two or three people – the simple solution is just to suggest that this is a topic for another meeting. At the end of the meeting, sum up what you believe has been agreed. Make sure that every meeting has minutes – if one of your team does the minutes you can also check (when you review them) that he has understood the main messages of the meeting. An absolute minimum is to document the action points and anything you have agreed on!

There’s no set list of meetings you must have (although one may be dictated by your management or a contract). However, you should aim to have at least a weekly progress meeting with your team, which should have documented actions and policy decisions. You should also meet formally with your managers and (maybe separately) the users every month, and compare progress with your plan. Again, you should produce minutes stating what you have agreed, and who has what action points.

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To avoid ending up like this, there are a number of things you have to do, regularly and effectively, starting with your first involvement in the project:

• Leading and building the team. Co-ordinate the activities of a group of people, so that things happen in the right way and at the right time. Perhaps even more importantly, you need to co-ordinate their different goals. If they have a common objective, they will deploy their own efforts more effectively. Your aim is to build a team whose ability as a whole is much greater than the sum of its parts.
  
  

• Planning. Every task on the project, and the use of every resource (including people), should be planned in advance. Otherwise, you will either under-use your valuable resources, or you will have insufficient resources and the project will slip. As well as managing time and effort, you have to manage the quality of the work which is done, and allow for things which could go wrong. You will have to regularly update your estimates and plans as circumstances change.
  
  

• Communicating. Everyone must understand what is being done, by whom and why, and this is down to communication skills. You need to open up as many communication channels as possible, and make regular use of them.
  
  

• Monitoring and reporting progress. Constantly monitor progress (against your plan), spot problems quickly, and report on your progress to your users and managers. If you do this, and particularly if you can suggest practical solutions to the problems, then others will have greater confidence in you, and you will get approval for your work more easily.
  
  

• Getting things done! Understand your overall objectives (and the intermediate deliverables), and progress towards them.

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Table 1 Project versus process.

The Triple Constraint

Every project is constrained in some way by scope, cost, and time. These limitations are known as the triple constraint. These are often competing goals, and they need to be balanced by the project manager throughout the project life cycle. Scope is related to the work that needs to be done and what is expected by the customer at the end of the project. Cost is related to the budget or how much money will be required to complete the project. Time is related to the duration of project or the schedule.

The project manager should consider the triple constraint while planning for the project and analyze any modifications requested or required during all phases of the project. Any modification to the project will impact one or more of these three constraints, and will often require trade offs between them. If there is an increase in scope, either cost or time will be impacted. Either additional resources (cost) will be required to meet the deadline (time) or the schedule (time) will need to be extended if the team resources (cost) remain the same. A project manager needs to understand which aspect of the triple constraint is the most important and cannot be impacted, as well as which one can be modified as needed. The priorities of the triple constraint are usually defined by the sponsors during the initiation and planning phases.

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The Horse Story

For several years I have been telling my horse joke every time I need to convince somebody about the power of one’s project management beliefs. Only when you believe in something can you sell it. I use this joke with my customers, colleagues, and peers. I try to give others my passion in telling the joke and I think I have shared it many times. However, I was not conscious about how I was influencing people when using that story over the years.

Many people remember me because of that joke; I think that means that I was able to influence them in some way. But let me tell it.

When I analyzed my story over the years, I discovered that I was influencing project managers’ and executives’ behaviors in my talks and presentations. Although the horse story is an example of persuasion, I always use it to demonstrate to project managers that they need to believe in their projects to be able to get the buy-in from executives. Every project is a “horse” you need to believe in, because if not, you cannot sell it to your customer or to the rest of the project stakeholders.

Persuasion consists of moving other people to voluntarily accept your point of view. Influence is the ability to exert power on somebody else. People who influence do not want to change attitudes, but people who persuade try to change them. I have become well known worldwide because of my positive attitude managing projects. What I learned is that every one of us influences people every day, but we are often not conscious of it. Remember, if you want to influence people, if you want to sell an idea or proposal to somebody, you need to prepare yourself (and the horse) if you want to be able to sell it.

Definitions

There are several definitions of influence. One is a power affecting a person, thing, or course of events, especially a power that operates without any direct or apparent effort. Influence may be also defined as the power to sway or affect based on prestige, wealth, ability, or position. Another definition is a determining factor, such as the positions of the stars and planets at the time of one’s birth, which many believe affects an individual’s tendencies and characteristics. A project manager needs to achieve results by influencing team members and stakeholders, and needs to develop that skill to be successful

Influence versus Persuasion

Is the gypsy a persuader or an influencer? Persuasion is important but dangerous. If you persuade someone the wrong way, you lose influence. If the gypsy tries to sell a bad horse, he will lose his influence. We have all been victims of salespeople, colleagues, or bosses who use great persuasion techniques to make us do something we later regret. (Such as buying a horse that does housework!) And next time we see that person, we know not to trust him. The gypsy, despite being less than trustworthy, still teaches a valuable lesson and that ultimately has influence. This book shows how you can persuade and build influence at the same time. Instead of avoiding you, people will want to work with you more. But you must persuade them the right way.

Influencers play for much higher stakes than persuaders. Influencers do not want to be successful only one time. They want to build commitment that lasts. This means that influencers think and act very differently from persuaders. Persuaders start and finish with their own needs. They want to sell their product or plant their idea in another person’s head. Communication tends to be one way: Persuaders do most of the talking as they extol the virtues of the product or idea they want to push. Influencers still have goals to achieve but think differently about how to get there. They see the world through other people’s eyes, and adapt their message and behavior accordingly. The ideal outcome is not simply to persuade someone; it is to build an alliance of mutual trust and respect. Achieving this takes a lot of time, effort, and skill. But it is a great investment that yields rich dividends over a long period. What are the differences between influence and persuasion? See Table below:

Persuasion is the here-and-now skill we have to learn. Influence is our investment in the future. As a project manager regularly dealing with people, it pays to learn influence and persuasion.

Basics of Influence

I would like to share with you four ways of influential thinking for project managers (Figure I.1): be ambitious, walk in other people’s shoes, develop commitment, and start at the end.

1. Be ambitious—Lack of ambition is a recipe for a quiet life in the backwaters of underachievement. For many project managers, the greatest barrier to success is in their heads. They accept low expectations for themselves. Low expectations are always self-fulfilling. Ambitious project managers have high expectations of themselves and others. They reach for the stars. Even if they fail and only reach the moon, they will be far ahead of others whose expectations reach no further than next year’s beach vacation. Unambitious project managers have never changed the world. Ambitious people are not satisfied with the status quo. They want to change things and make things happen.Ambition that is all “me, me, me” is not influential. It leads to conflict and fails to build networks of trust and support among your team and other project stakeholders. Ambition that is “we, we, we” is influential. It stretches people and teams, and builds commitment and camaraderie. The mindset of ambition is focused on opportunity and positive attitude.

Figure I.1: Basics.

2. Walk in other people’s shoes—I have seen some project managers who think they are the center of the universe. Influencers may also think that they are the center of the universe, but they do not always show it. So you need to work hard to see

the world through the eyes of each person you want to influence. As a project manager I was always asking myself difficult questions:
a. Why should this person want to talk to me?
b. Why should this person want to follow or support me?
c. What does he or she want? What does he or she not want? How can I use that to my advantage?
d. How can I find out more about this person?
e. What other choices do I have? Why should he prefer my way?

Walking in other people’s shoes is not about being nice to other people or even agreeing with them. It is about understanding them. Once we understand someone we can start to play his/her tune. The core skill for walking in other people’s shoes is very simple: listen to them but listen actively.

3. Develop commitment—Commitment is a mind-set central to the world of influence, not control. A control mind-set likes hierarchy: power comes from position. This makes it very limiting: the control mind-set does not reach beyond the barriers of the hierarchy to make things happen outside a limited range of control. The controlling mind-set is enabled by the organization but also limited by it. The controlling mind-set thinks that commitment is a one-way street: anyone lower in the organization must show commitment to people higher in the organization. Teamwork for a controlling manager means “my way or no way”: if you do not obey, then you are not a good team player.
A commitment mind-set is not constrained by hierarchy or by the formal limitations of power. It builds a network of informal alliances that enables an influencer to achieve things far beyond the dreams of the controlling mind-set. Commitment is a two-way street based on mutual obligations. Building commitment takes time and skill. Influencers do not expect to build trustful partnerships overnight. These things take time. But once built, such partnerships can pay dividends for a lifetime.

4. Start at the end—Influential people start at the end. They work out the desired goal and then work back from there. They map the journey from the destination back to today. If we start from where we are, we may decide that our goal is not achievable. If we start at the end, the only question we should ask is, “How do we get there?” not “Can we get there?”

Figure I.2: Day to day.

Starting at the end is a mind-set that consistently drives more effective behavior. It is focused on the future rather than the past, on action rather than analysis, and on outcome rather than on process. This mind-set in Figure I.2 shows some of the questions asked in common day-to-day situations:

Crisis: “How do we move forward?” not “What went wrong and who can I blame?”

Conflicts: “What are we arguing about and is it worth it?” not “How do I win?”

Meetings: “What will we achieve in this meeting?” not “What is the formal agenda?”

Project planning: “What is our goal?” not “What is the process and where is the risk log?”

Presentations: “What is my key message and for whom?” not “Can we prepare another 50 PowerPoint slides, just in case we get a question?

Starting at the end requires firmness about the goals but flexibility about the means. This flexibility makes it much easier to adapt to other people and to build commitment. People who can act only in control mode lack such flexibility; they hope that strict compliance with a process will yield the right outcome. They use the same map, whatever their journey may be. However hard they run, they never make progress; they simply cover the same course faster. Starting at the end ensures an influencer chooses a worthwhile destination.

Learn How to Influence and Persuade

I never found any recipe that allows you to create a magic potion called influence and persuasion. Instead, you can learn a range of skills and techniques. You do not have to learn them all at once. My best practice is to try one skill at a time. Each skill can make you a better influencer and a better persuader. Learn all of them, and you can acquire a sort of magic by which people are more willing to follow you. This book is a guide for you. I learned from experience more than anything else. So this book is the help you need to guide your experiences. It is written for practicing project managers and executives who need to cope with the daily reality of dealing with difficult team members, colleagues, executives, and other project stakeholders.

Each skill is mastered through continual trial and error. I illustrate both the failures and successes. The failures are important because readers can learn from them. If you can avoid the many pitfalls I fell into in the course of working on this book, then that will save you considerable pain. Each skill is illustrated with real-life examples. The good news is that you do not have to follow a script to be influential or persuasive. You can be yourself with your own unique style. But behind that style is a rigorous set of skills, structures, and ways of thinking that enable you to succeed.

Failing at Persuasion

In my experience with project managers I saw some project managers failing at persuasion. Some of the common mistakes they made are as follows:

1. They attempt to make their case up front with a hard sell. Project managers strongly state their position at the outset, and then through a process of persistence, logic, and exuberance, they try to push the idea to a close. In reality, setting out a strong position at the start of a persuasion effort gives potential opponents something to grab on to—and fight against. In my opinion, effective persuaders do not begin the process by giving their colleagues a clear target to attack.
   
   
2. They resist compromise. Too many project managers see compromise as surrender, but it is essential to constructive persuasion. Before people buy into a proposal, they want to see that the persuader is flexible enough to respond to their concerns. Compromises can often lead to better, more sustainable solutions. By not compromising, ineffective persuaders unconsciously send the message that they think persuasion is a one-way street. But persuasion is a process of give and take. To meaningfully persuade, we need not only to listen to others but also incorporate their perspectives into our own.
   
   
3. They think the secret of persuasion lies in presenting great arguments. In persuading people to change their minds, great arguments matter. No doubt about it. But arguments, per se, are only one part of the equation. Other factors matter just as much, such as the persuader’s credibility and ability to create a mutually beneficial proposition, as well as connecting on the right emotional level with an audience and communicating through vivid language that makes arguments come alive.
   
   
4. They assume persuasion is a one-shot effort. Persuasion is a process not an event. Rarely, if ever, is it possible to arrive at a shared solution on the first try. More often than not, persuasion involves listening to people, testing a position, and developing a new position that reflects input from the group. More testing, incorporating compromises, and then trying again. If this sounds like a slow and difficult process, that’s because it is. But the results are worth the effort.

Source: Bucero, Alfonso. ( © 2015). The influential project manager: winning over team members and stakeholders. 

Read More : Agile Project Management Training, Design Thinking Course

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Project cost control has two aspects. First, is the need for a design firm to control internal design costs—this requires careful monitoring of expenditures against fee budget. Some of the material discussed below is a recap of earlier information to emphasize the importance of controlling costs. Second, is the need to estimate and monitor the construction budget—failure to adequately do this may result in exceeding an owner’s willingness or ability to pay for constructing the facility.

Controlling Internal Project Costs

Perhaps the most difficult task of a design firm project manager (PM) is staying within the project design fee budget. This is a tough challenge for even the most experienced manager. A PM will need help in meeting this challenge. Many factors will affect his or her ability to meet the design firm’s goals. As noted elsewhere in this book, the matrix management/ strong project management system has its weaknesses, but it does provide for an individual to manage and monitor the project from beginning to end. To ensure its proper functioning, the matrix system must provide for an equality of responsibility and authority.

No project management system will function well without a capable staff. A high level of experience, accompanied by individuals who are able to make quick and accurate decisions, will go a long way toward keeping you within your fee budget. The goal is to achieve accurate decision making at the lowest effective level in your organization. Many events occur before you sign a design services contract that can have a significant impact on your profit potential. Specialization in one or a few types of projects allows your staff to become knowledgeable in the particular needs and problems of those projects. Research and programming materials, time, and problems can be reduced.

A poorly prepared design scope of services can leave many questions unanswered. This may result in conflict with clients or require excessive, unbilled change orders to meet the program. Poor scope determination can lead to an inaccurately calculated fee budget. The extra work or change orders required to overcome this problem can be very costly. Some firms compound this error by failing to forward price their work. Contracts that last over a long time period (a year or more), or are likely to be delayed must have an inflation clause. Without this clause, overhead increases and staff raises can eat away at the profit margin built into your project multiplier.

Communicating with Clients

Many design firms hurt their chances at controlling project design costs by failing to adequately communicate with clients. This failure covers a multitude of issues. Not adequately defining a scope of services leaves too many issues open for challenge or question, or may result in additional unpaid requests for services. A disciplined process of recording time and expenses related to change orders is essential. It is important to recognize that it is far easier to consolidate information than it is to segregate after the fact.

Scheduling a client’s input is essential to controlling costs. Failure to plan for this input can result in delays in decision making. A key to making a profit on a job is to keep it moving smoothly through the design office. Any delays penalize the bottom line. A regular meeting process with your client allows not only better use of your time, but can also provide a decision-making forum. PMs also have an obligation to keep their clients informed. Communication methods such as change order documentation, meeting minutes, and regular telephone calls all help to inform clients.

Information Systems

Perhaps the most important tool needed by a PM is an information reporting system that allows monitoring of costs against the fee budget. This information should be prepared by computer. Many commercially available computer software packages exist. Rarely should a firm seek to design its own software. Any claims that the commercial packages do not meet the particular record-keeping needs or method of doing business of your firm may indicate an incorrect approach on your part.

Most well-run design firms today collect time sheets daily and use electronic timesheets. This improves the accuracy of information and allows more current updating of project status reports. This also allows an interactive process where the PM can use any web enabled device (tablet, phone, laptop, etc.) to check the current status of a project. No information system is of value if the information collected is not accurate.

To control project costs, PMs must understand the information provided by status reports and know how to take action based on the information. If percentages of completions are used, they must be calculated and posted as accurately as possible.

Outside consultants must also be brought into the process of controlling project costs. If they fail to meet deadlines, arrive at incorrect or incomplete solutions, or if they do not segregate change order information, your efforts will be affected or delayed. Wherever possible, communication processes must be established to assist in working with your consultants. If a project seems to be going over budget, prompt action must be taken. It is vital to catch problems as early as possible. This is especially true if your projects are of short duration where any delays in obtaining status reports can prevent effective, corrective action. Staff may need to be changed in order to quickly complete the work or to correct mistakes. Time schedules and budgets may need to be revised to reflect the reality of delays or budget slippage. And, the scope of services must be reexamined to ensure that you are providing what you agreed to do.

Estimating and Controlling Construction Costs

Projects must be managed in a manner that allows for the control of all expenditures. The following examples of estimating construction costs are used with the help of data gathered and rules of thumb. When a quick estimate is required, these methods should serve adequately, but ultimately, more definitive methods must be used.

1. From past projects, cost is divided by the gross building square footage or square meters to determine the cost per square foot or square meter. In order to determine the new building budget, the cost per square foot is multiplied by the gross square footage.
   
   
2. Another method similar to No. 1 above, but more specific, is to use past data gathered for individual building types.
   
   
3. A third method that is more specific than Nos. 1 and 2 is to use past data pertaining to each trade to determine costs.
   
   
4. The method of determining cubic footage or meter costs in lieu of square footage or meter costs has its advantage in projects with large gross volume areas, such as theaters and auditoriums.
   
   
5. Other rules of thumb for quick estimation of project costs are cost per unit (material), cost per bed for hospitals, and cost per student for educational facilities.

Various methods that offer more sophisticated results than the rule of thumb methods are available for use by the cost estimator. All of these methods are dependent upon historical data and, obviously, the more current and detailed these data are, the more reliable the estimate will be. Some of the methods used are as follows:

1. Building unit estimating (based on unit costs of material and labor)
   
   
2. Statistical and analytical estimating (based on trends, mathematics, and the use of graphs and an overwhelming amount of information input)
   
   
3. Quantity survey estimating (based on the determination of the quantity of materials and the amount of time needed to complete specific parts of the construction)

Some methods lend themselves to earlier phases of a project while others are required when a more detailed, concise result is needed. The estimator must have several methods at his or her disposal and must be able to determine which method is most applicable to both the type of project and the particular phase of that project in which the estimate is required. Most of the costs of labor and material information are acquired from suppliers, contractors, and all of the other price determining sources where costs are initiated. These data may be presented directly to the estimator or by way of publications that assemble these data for the estimator who subscribes.

Many publishers of periodicals and magazines offer various types of construction cost information. The estimator’s good judgment is ultimately the determining factor as to whether or not the ongoing generation of cost analysis is maintained as accurately as possible. The human factor is not replaceable. Human error, on the other hand, can be somewhat eliminated by the use of computers, which not only calculate costs and analyze results, but also store cost data for use in determining construction costs. There are additional factors that cause cost differentials in building projects and these factors must be considered. They are the elements of solution for one portion of the building against those decisions made for other parts (or systems) of the building. It involves an overview of all parts of the project and the evaluation of all implications of a design solution.

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