Criteria For Determining The Success Of A Project And The Role Of Cost Planning In Achieving Financial Success

Team Satisfaction

A project is any unique undertaking that is managed and conducted by people in order to meet fixed goals within parameter of decreased cost and increased quality. The considerable factors of the project are precise objectives, prescribed resources, budget, schedule, quality measures and functions within the life cycle. The following sections discusses various factors that measures and determines project’s success, describes the role of QS in the project’s success, states reason for recommendation of cost planning in building projects along with role of cost planning in improvement of project’s financial success and finally discusses about the impact of the project team in situations where corrective or preventive measures are required.

The success criteria of a project include hard metrics such as on time delivery of the project within budget. It is valuable practice to measure the success of a project as it offers a learning opportunity for future projects. The following criteria for success measurement determine the project’s success (Mir & Pinnington, 2014).

It is the project’s intended result that needs to be completed.  A project’s success can be determined by measuring its achievement of objectives within prescribed framework.

It is easy to measure and understand. Irrespective of whether clients come to the project team with a hard deadline or they simply look for final product, in both cases the team always has a schedule that needs to be met as it determines the project’s success. The factors such as achieving project milestones as well as delivering project within time and measures the successfulness of the project.

One major indicators of project’s success is project team’s ability to deliver within budget. The factors such as whether project delivery within budget is manageable or not, by how much amount the project was over budgeted or under budgeted determines the successfulness of the project.

The project team satisfaction should not be ignored or overlooked as it may have deeper insight that the top stakeholders may not have. It is notable that the project team need to have life outside of work and the work must not be an obligation. Thus, team satisfaction is an important indicator of project’s success.

Tracking customer satisfaction through the project life cycle all the way to delivery can help to determine the project’s successfulness. There may be case where customer may be unable to articulate exactly what are the requirements. So the project team needs to figure out what the customer is looking for and ensure that customers are happy with end product by reviewing the ratings and tracking all these can help to determine the project’ success.

Tracking project quality and accordingly making adjustments to future projects also determines project’s success.

A QS or cost manager keeps track on project finances and legal relationships. The QS ensures that the financial position of the project is effectively controlled and correctly reported as well as manages the contractual relationships between various parties involved in the project ((Alzahrani & Emsley, 2013). The QS performs the following tasks.

• He/she advises on the feasibility of the project.
• He/she performs valuation by providing and presenting the information about the specific elements of work on regular basis to allow up to date payment of those works.
• He/she organises the project segments into project component work packages and assign these work packages to more specialised construction companies or subcontractors and determine who offer the best deal.
• He/she deals with legal and contractual matters.
• He/she manages costs to ensure that the beginning cost do not exceeds.
• He/she arranges the staff payments along with final account settlement of at end of job.
• He/she act as financial advisors and monitors progress for the client.

Role of the QS in the Project’s Success

The main concern of QS is to obtain capital amount, ensure secure flow of work, prevent losses, limit the money usage level and supervise the way of spending money. Thus, QS needs to provide detailed proficiency regarding economics, financing and financial efforts on building construction projects. Due to poor and improper management in financial sector, financial crisis such as falling salaries and job cut frequently occurs in building construction industry. These key factors needs to be administrated and controlled to recover these types of crisis. Hence, the QS’s skills and knowledge plays a significant role in the success of a project in building construction industry (Alzahrani & Emsley, 2013).

There is no universal or typical cost planning method that can be applicable for all type of building project since buildings can have extensively varying characteristics, serve variety of client requirements and their construction is subject to various contractual and administrative arrangements (Tsai et al., 2014). Hence, a vast range of cost planning techniques needs to be formulated to meet the diverse requirements of various types of building projects and thus recommendation of cost planning in the building projects is a major requirement as proper cost planning play a major role in the survival of building projects from financial crisis.

A cost plan determines the fiscal feasibility of the initiative by setting the cost controls and lifecycle budgets to manage the quality and delivery of initiative’s results for a fixed timeframes. In building construction industry, a cost plan is method of controlling estimated costs during project design and construction phases. Cost planning is a management process that control the design and development of the project in accordance with the client or customer budget. Cost planning occurs throughout the project’s design phase. Cost planning determine the initial project costs and examine some important determinants of cost changes over time (Mir & Pinnington, 2014).

• The project specification, which defines the project attributes. More detailed specification and larger project will make the project expensive.
• The project costing is affecting the project location through geographical realities and institutional factors. The project becomes expensive if it is in remote location as transportation cost of construction materials and equipment are added.
• The project sponsor’s usage of the type of contract and procurement can change the project cost estimation. In addition, marginal cost savings can be done through lump sum contracts.
• The original cost estimates can be affected by the site characteristics such as soil condition, drainage condition and access restriction.
• New infrastructure construction is expensive than modification of existing infrastructure, or buildings restoration.
• The gross construction costs are significantly impacted by the tax liabilities
• Project costs increases with lengthy project timescales, which depends on project specification.
• Inflation also significantly affect the project cost.

The figure below depicts the key determinants of costs associated with a building construction.

• Poor project management;
• Unexpected ground conditions;
• Cost of land acquisition;
• Plant and materials shortage;
• Exchange rate;
• Funding problems;
• Changes in design;
• Unsuitable contractors;
• Changes in relative price / inflation.

Thus, if the determinants of the initial project cost and cost changing factors are meticulously evaluated and monitored then it can lead to financial success of project, other project failure in financial terms can occurs.opting following corrective or preventive measures for the same (Besteiro, Pinto & Novaski, 2015).

• The team must adopt the proactive approach in situations such as improper risk management, insufficient work force, inappropriate skills and work planning.
• The team must properly use project development methodology and provide emphasis on project initiation.
• The team must timely plan project’s strategy and execute the project by managing project goals.
• The project team must avoid impractical or unworkable expectations and in any way or in any case must never set such expectations and the timeframes with customers and stakeholders in meeting project deadline.
• The team must accurate track the project’s progress as well as identify the concerned risk factors and focus on requirements of stakeholders.
• The team must apply the continuous improvement and analysis technique to analyse saving contingencies and reduce cost.

Conclusion:

From the above discussion, it draws conclusion that it is essential to identify what establishes a project’s success. The discussion above showed that how project scope, project schedule, project budget, project quality, team satisfaction, customer satisfaction can considerably measure the project success. By listing the job of QS, the discussion also showed the role of QS in the project’s success. In building construction industry, the QS works involves forecasting the documentation of contract, cash flow, cost planning, financial reporting, preliminary cost advice, procedures and valuations of tender. Hence, QS is responsible for all portion of financial sections. The discussion also pointed out the requirement of cost in building construction project. Further, the discussion also described how the cost planning improves the financial success of the project. Lastly, the discussion outlines the impact of project team’s corrective or preventive measures on the project’s financial success. Finally, it is notable that the success or failure of a project is subject to perception and the criteria vary from project to project irrespective of project type. 

References:

Alzahrani, J. I., & Emsley, M. W. (2013). The impact of contractors’ attributes on construction project success: A post construction evaluation. International Journal of Project Management, 31(2), 313-322.

Besteiro, E. N. C., Pinto, J. D., & Novaski, O. (2015). Success factors in project management. Business Management Dynamics, 4(9), 19-34.

Mir, F. A., & Pinnington, A. H. (2014). Exploring the value of project management: linking project management performance and project success. International journal of project management, 32(2), 202-217.

Tsai, W. H., Yang, C. H., Chang, J. C., & Lee, H. L. (2014). An Activity-Based Costing decision model for life cycle assessment in green building projects. European Journal of Operational Research, 238(2), 607-619.