University of Adelaide: Project Success and Cost Planning Report

This report examines the critical factors determining project success, focusing on cost planning and management within the context of building and construction projects, particularly a hypothetical hospital development. It emphasizes the importance of an experienced project manager, effective communication, and robust planning, including cost and schedule management, as key success criteria. The report delves into the role of the quantity surveyor/cost manager, highlighting their responsibilities in cost calculation, financial operations, and auditing. It underscores the significance of cost planning in determining project feasibility, setting budgets, and forecasting expenses. The report discusses the benefits of cost planning, such as informing stakeholders of financial expectations and securing appropriate financing. The influence of the project team and their ability to implement preventive and corrective measures to mitigate risks is also highlighted. The report concludes by emphasizing the interconnectedness of these elements in achieving overall project success.

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Name of Student
Name of University
Author Note

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Executive Summary
The report discloses the different criteria that determines the success of any project. In complex
building and construction project, the cost management play a central role in project’s success.
The undertaken report discusses the role or the influence of cost manager in project’s success.
The report establishes the fact that the economic success of a project is largely reliant on
effective cost forecasting. Especially in projects related to building, cost planning play a
significantly essential role. In this report the influence of team members of any project in success
and failure of any project is discussed.

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Table of Contents
Table of Figures...................................................................................................................3
1.0. Introduction...................................................................................................................4
2.0. Project Success Criteria................................................................................................4
2.1. Role of Quantity Surveyor/Cost Manager in Project Success..................................7
3.0. Cost Planning in Building projects and its Importance................................................7
3.1. Significance of Cost Planning..................................................................................8
3.2. Features of Cost Planning.........................................................................................8
3.3. Benefits of Cost Planning.........................................................................................8
3.4. Time Frame of Cost Planning...................................................................................9
4.0. Cost Planning to Improve Project’s Financial Success................................................9
5.0. Project Team’s impact on Project Success through Preventive and Corrective
Measures........................................................................................................................................10
6.0. Conclusion..................................................................................................................11
References..........................................................................................................................13
Appendix............................................................................................................................15
Cost Planning Process....................................................................................................15

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Table of Figures
Figure 1: Factors for Project Success..................................................................................2
Figure 2: Representing Planning in Construction Projects..................................................4
Figure 3: Cost Planning Process..........................................................................................8
Figure 4: The inputs, tools and Output of cost planning...................................................12
Figure 5: The Cost Planning Process.................................................................................13

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1.0. Introduction
The success on any undertaken project is generally referred to as a measurable term
linked with the outcome that should be accepted by the end user. The success factors linked with
any project is largely dependent on the activities and the elements that is associated with a
project to ascertain the successful completion (Mir and Pinnington 2014). The aim of the report
is to discuss the different criteria for project’s success. The management of any commenced
project is linked with cost planning that improves the financial success of any undertaken
project. Management of the project’s cost is considered to be important especially in building
and construction projects as these type of projects are long term projects and the changes of
change in the labor and the material cost of the project is quite high. The following paragraphs of
the report discusses the different criteria that determines whether a commenced project is a
success or a failure. In this context the role of cost manager in understanding the project’s
success is discussed. The following paragraph discusses the impact of planning cost in a building
project. The report further discusses the authority of the project team on the success of a project
while analyzing the preventive and the corrective measures linked with the project’s success.
2.0. Project Success Criteria
Success criteria of a project indicates the list of the features that should be incorporated in
a project to address if a project is a success or not. The success criteria of a project is mainly
determined by presence of a number of factors.

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Figure 1: Factors for Project Success
(Source: Cserháti and Szabó 2014)
It is critical for the managers of an undertaken project to define the success criteria of the
project prior to the start of the same. A complex building project, such as development of a
hospital is considered for discussing the successes criteria. The main success criteria of the
undertaken project are indicated as follows-
Experienced Project Manager: Presence of an experienced project manager ascertain the
success of a project. Experienced project manager follows the best practices for successful
execution of a project and therefore, it is considered to be one of the critical success criterion.
Communication: Effective communication among the team members ascertain
successful execution of an undertaken project (Todorović et al. 2015). This is possible mainly
because effective communication helps in ascertaining that the main issues in the project are
discussed among the project team.

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Planning: An effective plan ascertain the success of a project. Planning a project involve
effective schedule planning, cost planning and planning the management of change in a project.
For complex construction projects, cost planning and schedule planning are considered to be an
important criteria of project success
Figure 2: Representing Planning in Construction Projects
(Source: Alias et al. 2014)
Control: Enforcement of appropriate project controlling is necessary to check if the
project is following a proper plan. Controlling the works implemented in a project is therefore
considered to be one of the most crucial success criteria of a project.
The above discussed points shows the major success factors of any undertaken project.
For a project that deals with development of a hospital, more focus is needed to be given to the

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planning process for addressing the main issues in the project. Apart from that, the
communication planning in the project further play an acute role in execution and project
completion.
Since cost planning is one of the acute consideration of project success, the cost manager
is considered to be an important stakeholder of a construction project (Joslin and Müller 2015).
The role of a cost manager in determination of the project’s success is indicated in the following
subsection
2.1. Role of Quantity Surveyor/Cost Manager in Project Success
The cost consultant or the commercial manager of a construction project is known as
quantity surveyor. The Quantity surveyor play a similar role to that of a cost manger in building
projects (Ahiaga-Dagbui and Smith 2014). The cost manager in any construction project is in
charge of accurately calculating the cost of a project and is further responsible for ensuring cost
effective operations in a project or the overall business of a company.
Quantity surveyor collects and documents the main financial information in a project to
streamline the various operation model and also known for auditing the current project to
ascertain that the undertaken project is cost effective.
3.0. Cost Planning in Building projects and its Importance
Cost planning is one of the most crucial aspects that impacts the success of a construction
project. It is considered to a key step for preparing and planning a construction project. The
importance of cost planning is significantly large mainly because it provides an idea of the
expenses that are most likely to occur in a project (Ashworth and Hogg 2014). This particular

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information is further considered to be critical to check if the undertaken project is profitable or
not.
3.1. Significance of Cost Planning
Cost planning is important for determining the fiscal feasibility of construction project.
The cost planning indicates that against the maximum cost allocated for a project, the cost cap is
met. While planning the cost of a project if it is found out that the project may not be feasible in
the allocated cost, the current state of the project is reworked to reduce the cost of the project
(Choudhry et al. 2014). Thus, cost planning is important to let the owner know, the exact finance
installments needed in a project.
3.2. Features of Cost Planning
There are mainly to features of cost planning, one involves determination of the overall
project budget while the second one include cost planning related to allocation of costs over
time. The first feature of cost planning helps in evaluation of the expected cost of a project while
the later helps in prediction of the actual costs that will be incurred in a project.
3.3. Benefits of Cost Planning
An increasing importance is laid on cost planning as it provides significant benefits in a
project. One of the central benefits of cost planning is that the owner is aware of the major
financial expectations of the project. This further allows the owner to secure the correct
financing and business plan (Ashworth and Perera 2015). Without actual cost planning in a
project, the project owners may not get an idea whether the project is profitable or not. The cost
planning enables the owner to borrow the precise amount that is needed to finish a project.

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3.4. Time Frame of Cost Planning
The cost planning in major building projects are needed to be done three time prior to the
project’s start, once during the initiation period of the undertaken project, once when the design
phase of the project is completed and once after the final design is approved (Larsen et al. 2015).
The cost plan that is prepared should be regularly tracked to ascertain accuracy in cost planning.
4.0. Cost Planning to Improve Project’s Financial Success
Cost planning is important for a project as it provides the basis of cost control in an
undertaken project. The cost planning improves the chances of project success mainly because it
gives the project owner with an idea of the real cost of the project.
The cost planning significantly drives the project funding as it provides an idea to the
stakeholders the amount of money needed in execution of a particular task (Ashworth and Perera
2018). The cost planning in a project is furthermore important as it provides a basis of cost
control in a project. It provides an idea of the elements that drives the project funding process.
The cost planning is further important to let the stakeholders know the accurate cost of an
undertaken project. Knowledge about the actual cost of an undertaken project helps in measuring
the actual cost of the undertaken project against the project budget. This helps in checking if the
project is progressing as per the intended plan or not.
The estimation and the planning of cost in a project is subjected to examination of the
activity costs of the undertaken project, analysis of the scope baseline, identification of the
schedule and the resource needs in a project (refer to appendix). All these aspect are checked as a

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process of cost panning and therefore, it can be said that cost planning in a construction or
building project improves the financial success of the project.
Figure 3: Cost Planning Process
(Source: Illingworth 2017)
The above figure identifies the basic needs of the cost planning process in a construction
and building project. Since all the vital factors are evaluated for planning the cost of the project,
this planned process helps in refining the financial success of an undertaken project.
5.0. Project Team’s impact on Project Success through Preventive and Corrective
Measures

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The success of an undertaken project although depends on the cost planning process,
there is not denying the fact that a project team has a large control on the success of a project.
Proper communication among the project team helps in discussing the major risks and the
issues in a project (Burtonshaw-Gunn 2017). Effective communication among the project team
helps in addressing the risk in an effective manner by enforcing preventive and corrective
measures.
An experienced project team has an idea of the major risks in the project and therefore,
the preventive measures are taken to address those risks. In case an issue is faced in a project, a
corrective measure can be taken to address that risk.
The project manager along with the team can implement a process of root cause analysis
and enforce corrective action for addressing the risks in a project. The preventive actions in a
project team involves working on the risk management process while that of corrective actions
involves diagnosis of the problem faced and finding solution to the problem (Kwakye 2014). An
effective project team can readily identify the risks and the issues in a project and can help in
effective mitigation of the same.
6.0. Conclusion
The report discusses the factors that has a acute effect on the success of any undertaken
project. The report is being prepared in a context of a project that deals with a building of a
hospital. This type of projects falls into the category of complex construction projects and
therefore, the report is evaluated on basis of the same. The report further discusses the
importance of cost planning along with the need of effective planning in execution of the project.