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GCC cost consultants are calling for early involvement and tech adoption

Early involvement and tech adoption are allowing the Gulf’s cost consultancy and management experts to meet the growing demand for their services

SPECIAL REPORTS, Sectors

Early involvement and tech adoption are allowing the Gulf’s cost consultancy and management experts to meet the growing demand for their services.

It wouldn’t be entirely unfair to assume that cost-management services have undergone a marked evolution in the Gulf’s construction sector this year. The regional industry’s focus has extended beyond the theoretical study of technology and value-added tax (VAT), and  now also includes their practical applications. The Gulf’s cost managers have had to contend with these changes this year, and will have to continue to do so in 2018, as well.

Ensuring that these economic changes do not affect future construction schemes will require the early involvement of experts related to both the project’s building and management aspects. As Zander Muego, director at Thomas & Adamson, points out, engaging a cost consultancy at an early stage ensures that “there is an alignment between the brief and the budget” of the project.

“Any misalignment will likely result in a multitude of issues later on in the project,” Muego tells Construction Week.

Services offered by Thomas & Adamson include cost consultancy, which is typically activated from the initial feasibility stage and extends to handover.

The consultancy also offers project management and strategic advisory services, the latter of which sees Thomas & Adamson deliver advice related to claims and contracts management, as well as dispute resolution, from both a strategic and quantum perspective.

It is this extensive portfolio of lifecycle-focussed services that motivates Muego to call for the early involvement of cost-management experts. Indeed, this approach could also help clients avoid unnecessary costs, he explains: “Engagement from the off effectively gives clients the opportunity to run a full health check to ensure that appropriate commercial due diligence is carried out before investing substantial time and money into the project.

“Our job is to make sure all of the pieces of the development jigsaw fit well before the project team begins putting it all together,” Muego adds.

For those still questioning the practical  and onsite benefits of such proactive  pre-construction engagement, Khaled Ismail, principal structural engineer at Dubai-based firm, E.Construct, has the answers.

Speaking to Construction Week this July, Ismail said the lack of collaboration in the Gulf’s construction community was leading to high project costs and construction delays.

Ismail said structural engineers were usually brought in after the developer and architect had completed the design of the project, and were then left to devise solutions for design-related structural problems. However, based on Ismail’s experience, if structural engineers were brought in early, savings worth as much as 35% could be achieved on materials alone.

Rob Jackson, the director of the Middle East and North Africa (MENA) operation of the Royal Institution of Chartered Surveyors (RICS), is also a supporter of the early involvement of cost-consulting experts in a project’s lifecycle.

“Effective cost consultancy needs to be utilised from the design stage and then, throughout the construction and operational stages of a built asset’s lifecycle,” Jackson tells Construction Week.

“The role of the cost consultant needs to be more advisory, and we are already seeing many cost consultants being trained in negotiation, commercial mediation, and project management.

“The adoption of new technology, such as building information modelling (BIM) will help drive more collaboration between all project stakeholders, as well as reduce disputes, and thus, project over-spending and delays,” Jackson adds.

In fact, Jackson reveals, RICS’s programmes are also oriented to focus on and support the rapidly evolving role of the cost consultant. The institute provides credentials for cost consultants, quantity surveyors, and dispute resolvers, and also oversees the launch of guidelines such as the International Construction Measurement Standards (ICMS) and the International Property Measurement Standards (IPMS).

“We are producing standards and guidance in adoption of technology and processes such as BIM, as well providing a wide scope of training products,” Jackson adds.

“RICS is also advocating a more collaborative delivery of projects, which we see as the main area for a quantum shift in the efficacy of project delivery in the MENA region. Collaborative delivery is the way forward for the construction sector, and cost consultants need to play a pivotal role in driving this trend.”

For Thomas & Adamson’s Muego, collaboration is an integral component in a cost consultancy programme. Initial discussions with clients, he explains, are focussed on understanding project drivers: “If it’s a commercial facility, then what is driving its sales values or revenue streams? If it’s an end-user development, then what are the key elements that need to be considered for operational efficiency? Collaboration is key to understanding what clients’ needs are, and why they need [these things], to ensure they are spending money in the places that add value to their development.”

This approach is also encouraged by Ian Hauptfleisch, the general manager of Construction Computer Software Gulf (CCS Gulf), and the head of Construction Computer Software Pty Ltd’s MENA, Central, North, and South Asia, and Europe operation. CCS provides construction enterprise systems that integrate elements of budgetary control and cost accounting. 

The company’s products and services are aimed at providing contractors real-time, auditable, and activity-based comparative analyses of costs and “allowables”, both of which, according to Hauptfleisch, are essential information that determine “the success or failure of a construction venture for the contractor”.

Echoing Muego’s views, Hauptfleisch says that understanding costing models and budgetary elements is crucial to curbing overspending, as well as ensuring that maximum value for money is achieved.

He explains: “The management of cost incorporates monitoring, comparing, and predicting the actual cost versus the budgeted spend as a value and in granularity that is practically achievable, comparable, and informative.

“Within the construction and engineering space, both cost and budget take on an additional dimension: allowable utilisation versus actual utilisation – what has been used, compared to what was planned to be used, in terms of resources, equipment, manpower, wastage, time, and so on. It’s one thing to know that there’s been [a case of] overspending, but quite another to find out why, where, who, and when that happened, and how to correct it and plan for the future.”

While cost models and estimates are a key focus for the CCS expert, he also points out the long-term benefits of working with cost consultants to ensure overspending and delays are avoided.

“All costing or budgeting activity, no matter how good or accurate it is, depends on the quality and timing of the quantification, specification, and aggregation of the work to be done,” Hauptfleisch says.

“The estimate is the foundation of cost control for the project – the better the estimate, the better the control – but this is often out of the contractor’s hands. Here, the experience and best-in-class people, processes, and systems come into play. For the cost-conscious, these are priceless.”

CCS is the company behind the Candy Construction Estimating and Project Control and the BuildSmart systems, and its project portfolio in the region includes landmark developments such as Burj Al Arab, Atlantis the Palm, Yas Water Park, Kingdom Tower (Riyadh), and the Riyadh Metro. The company has worked with regional contractors such as Trojan General Contracting, Dutco Group, and BK Gulf, and has built up a repertoire of high-profile projects and clients.

However, Hauptsfleisch points out that the provision of cost-management services must go beyond product delivery and incorporate user-oriented components.

He explains: “At the end of the day, software doesn’t make people work – people make software work, and our software is merely a tool set. What you do with that tool set and how you use it is essential. Through our tried and tested implementation, support, training, and consultancy services, we collaborate with our customers to ensure value is derived from our solutions.”

Indeed, client-oriented value generation will be a key focus for cost consultants in the region. Thomas & Adamson’s Muego says the company is winning work in the Saudi Arabian market, which alongside the UAE’s, will be a focus for the company next year. Emaar Properties is one of Thomas & Adamson’s key UAE clients, with which it is working on the Emaar South project and the next phase of the Arabian Ranches.

He adds: “We will be looking at clients who value us and with whom we can add value to projects and processes. We are expecting it to be a relatively challenging market next year; however, there will be lots of interesting projects in Dubai and Abu Dhabi, which are the ones we are looking to partner with.”

Meanwhile, RICS’s Jackson is keen to increase client value through the uptake of ICMS, a standard that allows like-for-like project construction cost benchmarking. ICMS is supported by a client portfolio across local, regional, and global markets.

Jackson says ICMS will “enable transparency and more accurate cost prediction and management, leading to more informed decision-making and a reduced numbers of disputes”.

He adds: “We are working with key stakeholders to adopt international standards for property and construction measurement and valuation. Now, ICMS is progressing to include whole lifecycle cost classification systems, which will provide much-needed consistency in the sector.”

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