Guest article: Surviving the desert without Cost Control
Posted on: April 23rd, 2014 by

In this special guest article, Kalyan Emandi, Construction Engineer with Arabian Industries, shares his experiences of struggling to control costs on a challenging project

Desert Oil Field After a grueling six months of work in hot desert conditions my crew had successfully completed our construction work on time.  I was elated with our efforts and performance, because we had met our deadlines despite the difficult circumstances.  The whole team had a sense of satisfaction at achieving their objective.

Little did I know that a few months later, once I had started working with other departments, I would learn that our team had exceeded the allocated budget, leaving me feeling unhappy about our accomplishment.

I understand that it’s not only me.  There are millions of people around the globe who keep on doing the same thing – they use every possible resource to finish the project.  The fact that we are exceeding the budget never crosses our minds: the only focus is to finish the work on time.

I had done my best and completed the job.  Not only me, but everyone involved in the project did their best to complete the job on time.  Yet we exceeded the budget… how?

Although the job was getting done, the optimization of resources were never considered.  Four hands are better than two, but those extra hands incur extra costs such as wages, food and accommodation.  All of this has an effect on the overall project cost.

In the mad rush to complete the job one ends up using more resources.  The misjudgements, delays in materials and manpower, and delays in approvals don’t help either.  The money spent on idle charges and the costs incurred due to misjudgements are the key to making a project a success or a failure.

The more I think about it, the bigger the picture gets. The use of just one extra pair of hands had snowballed into exceeding the budget, which eventually determined the success of the entire project.  In an increasingly competitive market, this can affect the sustainability of the whole organization.

What would have happened if all the key project personnel had been alerted at the early stages of the project to the deviation from the original budget?  Maybe we could have changed the strategy or revisited the schedule, or in the worst case we could have applied for an increase in budget allocation, giving ourselves a certain amount of control in making the project successful, both in cost and time.  The question remains a maybe for now…