The QS estimated that it would have to control costs on 90 cost centres, including about 50 trade packages. It was a recipe for disaster. “We were looking at a big project with no tools for cost management,” says Currie & Brown partner Simon Robinson.
Robinson scoured the market for a suitable software package to keep track of costs, but none was available. So he took a deep breath, plunged hand in pocket and funded a project to develop a program that would do the job. That was in November 1996. Now the software – called ProCom – has proved itself on BAA projects, and Currie & Brown is spreading its use to other clients.
The key driver for developing the software was the need to keep track of design changes. On the Heathrow project, Currie & Brown registered more than 2000 change orders spread over the 90 cost centres.
When a change order is made, the first step is to find the right person to authorise the variation. Major changes – such as replacing a column with a transfer beam – need to be approved by the client, but smaller change can be signed off by a project manager.
“Deciding who has to sign off the change is a team decision, often dictated by its cost implications,” says Robinson. So the next stage is to assess the effect that changes will have on other packages. This is where the software comes into its own.
Calculating the cost of design changes
When design changes are fed into ProCom, the software calculates the direct cost increases and any cost increases in related packages. Within a few seconds of inputting the change, the program calculates the total cost and its impact on the construction programme. Using a calculator and paper to do the same job can be a lengthy process, and some implications may be missed.
So, Robinson says, the software boosts the efficiency of cost managers and senior managers, who do not have to waste time considering changes that have little commercial impact.
ProCom also allows Robinson to manage clients more efficiently. He explains: “One of the biggest industry bugbears is that clients change designs but do note acknowledge the cost implications. For instance, clients ask us for 10% cost savings a year, but they have dynamic businesses where briefs change.
Even though we’re making savings on a project, these are often gobbled up by design variations. With ProCom, we can prove how much the changes cost and this helps us demonstrate savings,” says Robinson.
The software is relatively simple to operate. Robinson says that a adequate level of competency can be achieved with half a day’s training, and just one day’s training will make you an expert. But, he warns, the program is only as good as the cost manager using it.
To input a change, just call up the package and enter the change in the relevant boxes. The software does the rest. It can calculate a host of results, including the cost impact on the package, the impact on contingency funds and the impact on other packages. It even generates sign-off forms.
Generating key performance indicators
Because of the versatility of the database that ProCom is built on, the software can be used to generate key performance indicators. Users can calculate how much each change has cost at a stroke.
“This helps us make cost prediction more accurate,” says Robinson. “We can give potential clients base costs, plus information about average changes in cost because of variations,” he adds.
Currie & Brown can even specify what kind of changes are the most expensive. For instance, says Robinson, it is generally accepted that project changes can cause a 30% rise in the cost of services. ProCom has shown that this is not true. Although change management is ProCom’s most distinctive feature, it also includes information found on less sophisticated programs. The original cost-plan information is kept and updated with every change. Final account data can be generated at any point.
Robinson admits that other construction managers also have sophisticated software, such as Bovis’ Hummingbird system. But, he stresses, these are purely for in-house use, whereas ProCom can be licensed to clients and its output easily reprogrammed to fit with their requirements. So, if clients want reports presented in a certain corporate style, ProCom can be adjusted.
The program is primarily a management tool and can be used to monitor all kinds of projects. Robinson explains that for one client, ProCom is being used to track the changes between the concept design cost and the detailed design cost.
Currie & Brown’s ProComPros
- Keeps a running total of the impact of design changes on cost
- Saves senior managers’ time by improving sign-off prioritisation
- Helps demonstrate key performance indicators
- Must be operated by experienced cost managers, who will need a day’s training