Construction stage services cost more if the design is still being done when construction begins.

Target all the design to be done before construction begins.

If that is not possible, try to have complete deliverables packages complete before construction begins.

If design is still proceeding when construction starts, the constructors will require a lot more input from the designers, leading to higher design costs (in construction stage services).

Tagged with: construction stage services • deliverables • work packages

Filed under: Construction • Cost • Design • Planning

If you work on an alliance project or any project where some tasks are done by a collection of organisations, make sure there is a clear and simple procedure for making purchase orders.

A designated group of people should be responsible for this and should know the system. That group should be able to process purchase orders for work even if that work will be paid for by the head companies and not the alliance.

For example, I needed to get some external design work done. I had an external person who could do a set of designs for a set price. Yet it took ten weeks to actually make the purchase order so that work could start, including 10 hours of my time in going backwards and forwards trying to sort the system out.

The process included these steps:

1. Try to find out which head company was paying
2. Get the correct forms for the purchase
3. Find the sub consultant agreement forms
4. Wait until the head company could send me the right forms
5. Fill these out and sending them to the head office accounts department
6. Get them returned to me saying they were wrong and a different form should be used (different people thought different forms should be used)
7. Send the agreement forms to the sub contractor to agree to.
8. Get them back with alterations.
9. Send them to the head office corporate solicitor to check and advise.
10. Get a new form recommended and send them again to the sub consultant for agreement.
11. Get agreement and then get signatures from alliance managers.
12. Send the signed form to the head company for signatures.
13. After agreements are all signed, give these and sub consultant details to accounts department for a purchase order to be made.
14. Get this purchase order signed by alliance managers
15. Get the purchase order signed by head company.
16. Alter purchase order and agreement because different designs are now required (because of the time delay some internal staff had done some designs themselves as they were needed urgently)
17. Get signatures again (alliance, head company, sub consultant.
18. Send purchase order and agreement to sub consultant for work to be commenced.

Many of these steps took one or two weeks for review and responses. It would have been cheaper, quicker, and easier to get these designs done internally and pay overtime to get them done.

Management cost to get these processed $2000

Cost of designs $8000

These costs do not include all the purchasing and accounts department time and costs, only the direct design management costs (my time and my manager’s time).

If there was a division in the alliance office who could do all this, I could have taken the sub consultant details and price to them and they could have done this whole process in less than one hour, at a cost of perhaps $50.

• They would need all the correct forms and agreements from the head companies.
• They would need to know who authorises these forms and have easy access to these people.
• They should know what forms and agreements are used for each purpose.

Tagged with: alliance project • forms • project delays • purchase order • sub consultant

Filed under: Cost • Design • Documentation • Procurement

Send time charge codes with meeting and function invitations.

If you send an invite/schedule booking to team members for a meeting, staff function, training etc, you should send the time code that they should book their time for that time under.

This will save them each individually searching or asking what they should book their time to.

This should also apply if you instruct someone to work on a different project than they normally work.

Tagged with: booking time • cost code • meeting invitations

Filed under: Communication • Cost • Time

Remember in your planning that the costs of materials are often less than the labour costs to install them.

Consider the ease and speed of installation even if the materials may cost more.

For example, laying asphalt may be more expensive in materials than using pavers, but it may work out to take less labour time than laying pavers and so the overall cost may be lower

Tagged with: installation • labour cost • material cost

Filed under: Cost • Planning

Although this is an organisation issue, not just a project issue, it is important to make sure your team does not send messages to all for something that is specific to one group or one office.

E.g. “A pair of reading glasses have been misplaced. If you have seen these could you please return them to reception.”

This kind of message often gets sent to the whole organisation mail system, which could include thousands of people, when it should be sent just to that local office.

The lost time associated with thousands of people readings a broadly sent email like that and the bandwidth costs could amount to thousands or tens of thousands of dollars.

In the above example, approximately 5000 people received the message. 5000 x 30 seconds is about 42 hours wasted time ($5000+ in billable time). Plus the time wasted in people laughing about it and replying with comments. Plus the storage costs and transmittal costs.

Not only does it make the sender look foolish, it wastes your project time, resources, and if from your project, its reputation.

Tagged with: email • local office • wasted time

Filed under: Communication • Cost • Time • Training

Eliminating unnecessary features in design will give the largest savings in a project.

If your client wants costs cut, look for the most costly features (in design cost and construction cost) that could be eliminated without significantly reducing the final required result of the project.

For example, a client wanted a set of equipment protected from potential flood levels by constructing it on the flat roof of an existing building. However, the rest of the existing plant was below that level so in the case of a flood would be out of operation anyway. To construct on the roof of the building would have taken significant extra structural support costing more than the equipment being installed. It was decided to install the equipment at ground level instead of raising it above the potential (rare) flood level, and installing a simple bypass system for use in case it failed. This saved more than double the price of replacing the equipment in the unlikely event of it being flooded.

Of course this may not be possible with features that are critical to operation, but if they are not critical, eliminating these features at the design stage (early in the project) can save a lot of money.

Tagged with: features • savings

Filed under: Client • Cost • Design • Scope

You must learn to say no to some requests from clients

If change requests from the client will make the design unsafe or unusable, you should refuse to change it. Otherwise you could still be sued as the designer for giving misleading information when your company is the expert (accepting a change could be deemed as approving it, even if you gave a warning that it would be unsafe or unusable).

Another instance to say no is if the client asks for changes that will increase the schedule but won’t approve the increased schedule. Get approval from the client for the extended schedule or cost before saying yes to the proposed change.

Tagged with: change • schedule

Filed under: Client • Contract • Cost • Design • Risk • Safety • Scope

Some companies have idea boxes or systems for employees to share their ideas for improving an organisation or project. Yet they can often find it difficult to get people to submit good ideas.

Giving a significant reward for ideas that make significant savings or profits would encourage ideas even more.

Apparently the Japanese used to have a reward system where if an employee put forth a suggestion that saved money, they would get half of the first years profit or savings from that idea.

Tagged with: ideas • improvements • rewards • saving money

Filed under: Cost • Human Resources

Before the final signing of a contract with a supplier or contractor, review their status to make sure they are still capable of delivering as originally discussed.

They may have tendered or quoted a long time ago and things may have changed (such as their workload, delivery schedules, material costs etc).

Even if you are still within the validity of the quote, they may have now booked a lot more work and may struggle to meet your expected delivery schedule. Suppliers or contractors may have said they can meet the price, but often the delivery time will slip. So check if they are still capable.

Tagged with: delivery schedule • price • status • supplier • workload

Filed under: Contractors • Cost • Procurement

Find out why a project was started.

Some reasons could be different to just business as usual, and these may affect the priority on time, cost, or quality

• Was it internal business reasons (business process improvement)?
• Is your organisation using the project as a demonstration of its capability? To show off and make itself known.
• Is the project a way to break into a new market (low or no profit may be expected because it will be used as a learning and development exercise).

Tagged with: demonstration • improvement • new market • priority • profit

Filed under: Cost • Quality • Scope • Time

Find out what is most critical for a particular project – Time, Quality, or Cost

For example, a sports event launch is not time negotiable. It must be on time, it cannot be delayed a few days like a construction project could.

Tagged with: critical

Filed under: Cost • Quality • Time

Spend a few moments to consider where your project fits in with the business.

Tiny extra costs may not be worth the time or effort to try to reduce. You might spend more money trying to reduce them than the savings in doing so.

Prioritise tasks in terms of your project and also for your organisation. You might have something important for your project to do, but if doing so will delay many other projects even more, maybe you should alter that item to benefit the big picture.

Tagged with: big picture • prioritise • tasks

Filed under: Cost • Planning • Time

It is the responsibility of the project manager to organise priorities for the team members.

You should provide direction on what is the most important task.

You should settle conflicts between activities.

Provide things like the network diagram and critical path of the project to clarify to team members what work is the most important.

The PM should also give their team direction on the requirements for time, cost, scope, and quality.

Tagged with: activities • conflict • critical path • direction • important tasks • network diagram • prioritise • priority

Filed under: Cost • Planning • Quality • Scope • Time

When ordering lots of smaller items (e.g. 50 x 40mm PVC ball valves) it is a good idea to order 5 to 10 percent more than required.

• This allows for breakages.
• This is especially important if the project is not well planned (e.g. the design is not complete at the time of order) .
• Ordering extras saves money because you get them at the bulk price instead of buying small numbers of extras later at a higher per item price.

Tagged with: breakage • bulk price • extras • order more • orders • smaller items

Filed under: Construction • Cost • Procurement

If your project site has potential graffiti problems (or has problems) consider hiring some street artists to paint murals on those walls with graffiti problems.

• When painted well, graffiti is less likely to be put there as there is already good art.
• It makes the site more attractive.
• If it discourages graffiti, it may work out less expensive than continually repainting the areas to cover graffiti.
• An example is the electrical boxes around Brisbane, Australia. They have all been painted with different topical, sometimes funny, always creative pictures. Very little graffiti is put on them now, and they make a very attractive addition to the street.

Tagged with: art • artists • graffiti • painting • repainting

Filed under: Cost • Design

Make sure to consider and allow for project commercial risks:

• Protect yourself with insurance
• Make risk plans (for specific risks)
• Evaluate possible risks (rate them)
• Work out likely percentages (probabilities) and build these in to the costs.
• Allow for loss of resources (team members sick, injured, quiting)

Tagged with: insurance

Filed under: Cost • Planning • Risk

Allow for rework and failure in budget costs and time.

In my opinion, you should allow 3-5% of the total project value to cover this. This will vary based on the type of project. Just make sure you allow for it.

Tagged with: failure • rework

Filed under: Cost • Planning

Clarify with all project team members what they should book their time to.

When they start working on the team they should be given a printout of the cost codes that they should book time to.
Don’t assume they will already know.
This will save time and provide more accuracy for cost accounting for the project.

Tagged with: accounting • cost codes • time sheets

Filed under: Cost • Human Resources • Time • Training

Good reliable internal and external network connections are important.

As an organisation, project office or program office, it is important that both internal and external networks work well.

It costs a lot of money in lost time if the office connection to the internet is offline or very slow. Managers, designer, drafters, procurement, and many others need external access to look up supplier information, maps, site info, government websites, standards, definitions, dictionaries.

Blocking access to sites using Net Nanny or similar is better than blocking all external access.

Although the company might have to pay high bandwidth costs for a faster connection, that is probably cheaper than the lost time of people having to wait for pages to load.

Tagged with: bandwidth • connection • download • internet • intranet • network • offline • online

Filed under: Cost • Time

Get your organisation to implement an electronic authorization system.

This is where each person that must regularly sign paperwork can instead authorize documents in electronic form.

This will reduce the time taken to authorize actions (forms)

The originator could prepare an electronic form and send the link to all the people that must sign it. Those people log on, review the document, and authorize it by ticking a box. Confirmation would then be sent to the originator on which authorizations have been attached.

This will save a lot of server space, bandwidth, and ink as people would not have to print in colour, sign, scan, and email back again.

It can also reduce processing time from weeks to hours or minutes.

It should reduce the processing costs. To chase signatures can take the full time work of a person for each type of form (if done regularly). By doing electronic authorization, I would estimate 90% of the coordination time and cost could be saved (excluding the software cost).

Workflow packages are often used to implement this function.

Tagged with: authorization • forms • paperwork • signatures • workflow

Filed under: Communication • Cost • Documentation • Time