20.10.08

IBS: Critical Succes Factors 3

Effective Cost Management

Cost Planning: Cost impact is appears to be the major barrier in preventing the contractor to use IBS (Goodier & Gibb, 2004; Vanable et al, 2004 and Pan et al, 2007). Contractor is likely to maintain tight control over the budget and schedule to guarentee a profit in project. Therefore, the use of IBS demands careful and detailed cost planning and management at all stages (Sanderson, 2003). Careful monitoring of costs through the whole procurement process is also crucial to ensure that the prices quoted are those being delivered at site (Sanderson, 2003). Therefore, documentation of actual project progress cost is important so as to allow for intellegent midcourse correction on project and for the negotiation of claims (Gould, 2005).

Cost Comparison for Decision Making Process - Even though the large proportion of construction practitioners preservely thought that one of the advantages of using IBS was both a reduced in initial cost and reduced whole life cost, the decision required to choose one methid of construction over another is too often based on cost rather than value (Blismas, 2006 and Vaneble, 2004). Most decision makers will use construction solution for which information is already plentiful and available whereas they will think that IBS has had a hidden cost to hide (Goodier & Gibb, 2007). Gibb (2001) therefore, had argued that the use of elemental cost anlysis by considering the building elements in isolation is unlikely to deliver a balance cost comparison but rather cost neglect of many benifit in construction process. A sensible cost comparison to made the fact that many suppliers seek the maximum price and as the result the tender price quoted by the suppliers may not reflect the actual cost (Gibb, 2001). As such, good cost comparison data and format must be develop to support decision making in opting IBS over the conventional method. Contractors need to create a framework for comparing costing solution in holistic manners (Blismas et al, 2003). Pan et al (2007) is also suggested balance and transparent comperative costing framework. Tool such as IMMPREST (Interactive Model for Measuring Preassembly and Standardisation Benefit in Construction) toolkit is describing in detail the measurement of risks and benefits of using prefabrication within a construction project (Blismas et al, 2003).

Cost Data: According to Lusby-Taylor (2004), the lower usage of IBS particularly on complete modular building, volumatric pre-assembly and close panel system is partly due to current limited cost data to support decision making. In ganeral, IBS projects tend for the present to be ‘one-off’ with no past data and cost data comparison between project thus require especially careful control. One of the recent research to merge IT and tendering process is CONCUR project. CONCUR is a project for developing integration strategies based on eletronic information sharing and exchage using open international standard. It aim to reduce the cost of tendering, speed up the process of tendering, improve the accuracy of the bid, integrate process and information and support concurent working (Leonard, 2001). In addition, better cost data with good, flexible format supported by Information Technology shall lead the contractor’s organisation to more competitive and systematic costing and estimating for tendering purposed.

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