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13 MAR 2020

Educating the market on the need for cost management

Amie Silverwood

Amie Silverwood

Content Manager - Communications and Media

Toronto, Canada

RICS

When new RICS Americas World Regional Board Member Darren Cash looks at the construction industry, he sees an industry embracing new technology, a more inclusive workforce and more sustainable and resilient practices; in short, he sees a lot of positive change. However, he also sees an industry that has yet to embrace cost management fully as a standard practice. As a cost manager himself, the biggest impediment to more sustainable, standardized and transparent cost practices is educating people about the role of a cost manager in the first place.

“The reality is that there are few projects being delivered on budget in Canada and the U.S.,” says Cash. “Some of that is the nature of the industry, but much of it is because there could be more robust and standardized cost management practices across the board.”

Darren Cash portrait
Darren Cash

The reality is that there are few projects being delivered on budget in Canada and the U.S.," says Cash. "Some of that is the nature of the industry, but much of it is because there could be more robust and standardized cost management practices across the board.

For Cash, creating awareness about what cost managers actually do is essential. Part of the issue is the different nomenclature depending on where in the world you work. In the UK, the job is called a cost manager, while in Canada it’s often referred to as a quantity surveyor. In the US, many firms instead have cost engineers. Still others call the job a construction economist. While the different titles bring different job functions and demonstrates the breadth of what a cost manager can do, it also speaks to a non-standardized way of approaching cost and adds to the difficulty of succinctly outlining what a cost manager does.

But this is changing as firms increasingly see the need to create transparency and use cost management techniques as a standard. At Turner & Townsend, where Cash is the Director of Cost Management in Toronto, his team of 33 is growing. As opposed to clients exclusively using in-house data, consulting professionals like those at Turner & Townsend help bring a wealth of independent data and a broader perspective.

So what does his team do then?

“Much of cost management is managing expectations for a project,” says Cash. “Really no one can arrive at a business case for a project and expect that to be the end of it. It’s really more about the journey from business case to out-turn cost. Cost managers provide real estate, infrastructure and natural resources clients a plan and KPIs to execute a project in line with their desired output and create fiscal transparency throughout the project cycle.

“If there are changes, it’s important to know exactly why and how to manage them. We take a whole life cost approach, from precontract to when the final punch list item is complete and even beyond into asset management and life-cycle.”

RICS, he believes, is crucial to this industry effort because the organization creates consumer confidence and ensures standard practices. The value of cost management services is highly dependent on ethical and transparent industry-wide standards.

“The principals should be the same everywhere,” says Cash. “Data and experience may vary on each project, and organizations may have different goals, priorities and building strategies, but how we plan, structure and measure cost and risk doesn’t need to change—nor should it.”

Like many of the roles in the construction industry, cost management is experiencing a skills shortage, but this brings a significant opportunity to grow in Canada and the US, particularly in reaching out to more diverse groups of young people.

“There’s a perception that this isn’t a cool industry,” says Cash, “but cost management is important to a range of important trends, such as sustainability, technology and carbon neutrality. We help companies and organizations achieve these things through robust fiscal planning.”

The profession is also incredibly important to considering the macroeconomic conditions of cities, urban design and even public health issues—such as the coronavirus—as people consider the supply chain and the workforce and the effects these things have on their projects.

“As a member of the RICS Americas World Regional Board, I want to drive awareness of the profession and use this as an opportunity to increase awareness in more diverse talent pools.”

To address the cost management skill shortage in the Americas, RICS provides online training to teach the core knowledge and help professionals develop the technical expertise for the role of a cost manager. Learn more here.

Amie Silverwood

Amie Silverwood

Content Manager - Communications and Media

Toronto, Canada

RICS

Amie Silverwood is the Content Manager – Communications and Media for RICS in the Americas.

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