Cost monitoring and controlling practices of construction companies in Sri Lanka

Abstract

The wealth of any nation is gauged by its performance in infrastructure provision through its construction industry. The construction industry is large, volatile, and requires tremendous capital outlays (Kaliba, Mundia & Kanyuka, 2008). Cost is a comprehensive index, which is not only closely related to the efficiency and competitiveness of an enterprise, but also reflects the superiority and inferiority of its management in various aspects. Cost control is the main means of reducing the cost of products and it serves as the precondition for the enhancement of estimation and economic returns of the business. Cost monitoring concepts have been in the international construction companies for many years. Hence, it needs to analyze the Sri Lankan context of cost monitoring in construction companies. The main objective of this research work is to discover the current cost monitoring practices in Sri Lankan construction companies, find out the drawbacks of existing CMSs, professional’s adaptation to the ICMSs and other affective characteristics related to the implementation of an automated CMS and to give some recommendation to implement an enhanced Project Management System in construction firms, in which cost management, planning and control can be gradually integrated, in order to overcome the existing limitations of the current cost monitoring systems. This research is based on the literature review and the data collected through questionnaire surveys and interviews among 57 professionals in the construction companies in Sri Lanka. With the findings of this research, it is expected to guide construction professionals towards enhancing the current cost monitoring systems in order to become more proactive, and be able to deal with the dynamic, uncertain and complex construction environment that exists in most of the construction projects in Sri Lanka. Key words: Cost, Cost Monitoring Systems, Projects, Integrated Cost Monitoring Systems (ICMS), Performance Indicators, Construction Industry.