Major Effects On Project Costs

The evaluation determined the following:

• The Design Basis contributed to 80% of the cost.

The "complete" project management program contributed to 20% of the cost.

The project management program is comprised of a combination of project execution methods/procedures and personnel skills. Effective methods, good personnel skills and adequate resources are essential for a quality project management program. High quality methods and advanced personnel skills can result in project cost saving of 20%,of the total project cost. Conversely, a poor program and low skills can increase the costs of the capital projects program by 20% or more. It is probable that the downside risk of cost increases is much greater.

Figure 11-1 illustrates a detailed breakdown of the 20% sav ings; individual percentages to the six major phases of an E.P.C. project are allocated, and probable variations for large and small projects are estimated. The most significant variation is that of project management, where the impact of an individual on small projects can be the largest, single cost factor.

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Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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