The evolving role of cost management in the age of AI

Construction delivery has more expectations placed on it than ever before. From a broader meaning of value and more stringent carbon targets to greater emphasis on social outcomes and navigating increasingly volatile markets, cost management is being fundamentally reshaped.

Clients need much more today than cost managers reporting on and controlling project budgets. They need partners and advisers who can connect price and programme with wider strategic objectives and priorities, from quality, safety and risk to future flexibility, whole-life-carbon emissions and job creation.

Technological advancements are providing opportunities to help us meet this challenge. However, fully digitising our profession and delivering real value for programmes will require investment in both technology and the skills to enable confident, informed decisions for investors and clients.

Turning data into insight

The industry collects vast amounts of project data, but often falls short of using it to produce insight which will generate timely, actionable decisions.  The real value comes from the ability to transform information into better decision making.

The real value comes from the ability to transform information into better decision making

Used well, this insight can influence processes adopted throughout delivery and improve outcomes across the asset lifecycle. On a stadium development, for example, good analysis and programme management should assess how design choices can influence not just capital cost, but future revenue streams, carbon emissions, asset flexibility and its impact on the community. The value lies in making those trade-offs visible early enough for the client to act on them.

Realising this aim requires systems that can bring project information together quickly and consistently and make it usable. At Turner & Townsend, our HIVE platform for example draws on live data from more than 2,000 globally benchmarked projects and a further 18,000 logged projects, allowing our teams to benchmark performance and identify trends across a wide evidence base.

By showing how individual choices affect delivery and an asset’s performance, data can help project teams test options against the outcomes the client is trying to achieve, provide better insight to make tangible improvements to projects and deliver greater value from the programme.

The greatest value emerges when that insight is made accessible to everyone. When clients and project teams can interrogate the same evidence, discussions can begin earlier, assumptions can be challenged openly, and cost managers can act as a strategic partner.

Building the skills to match

However, even the strongest benchmarking data is only a snapshot – a record of specific projects delivered at a particular time. It can reveal emerging patterns and how one project performs in comparison with others, but it cannot foresee changes in market conditions or crucially advise on what action a client should take in response.

AI can help strengthen the information available to cost managers by identifying patterns, automating routine analysis and improving forecasting, but this doesn’t replace the professional, human judgement needed to balance competing priorities and advise clients through uncertainty.

AI doesn’t replace the professional, human judgement needed to balance competing priorities and advise clients through uncertainty

This matters because the role of the cost manager isn’t just in assessing and interpreting project and market data. It’s understanding wider industry capacity, risk appetite, bottlenecks that could come down the line and how this should all be managed within the programme to generate the greatest value in the client’s eyes.

For junior colleagues who don’t yet have the benefit of decades of experience, this is naturally more challenging. However, greater access to data also creates a significant opportunity for this cohort. It gives them earlier exposure to the factors that shape project and programme outcomes across different markets, asset types and delivery models. This then means they have the knowledge to be involved in conversations with and advise clients from an earlier stage in their careers.

This on-the-job learning must be combined with structured training and coaching to develop commercial judgement, technical understanding and the communication skills to turn information into sound advice.  But together with increased access to data and clients, junior cost managers can get up to speed and hone their abilities much more quickly.

The world around us is changing fast. As client ambitions grow and delivery becomes more complex, we as cost managers will need to invest in our own capabilities to keep pace. This investment must be people-first but tech-enabled, matching digital resources with a pipeline of professionals who have the skills to use it to deliver better advice, greater certainty and increased value – for investors, clients and our communities.

Stephanie Marshall is managing director for UK real estate cost management at Turner & Townsend