Improving the cost estimates of complex projects in the project-based industries

Abstract

Purpose Project-based industries face major challenges in controlling project cost and completing within the budget. This is a critical issue as it often connects to the main objectives of any project. However, accurate estimation at the beginning of the project is difficult. Scholars argue that project complexity is a major contributor to cost estimation inaccuracies. Therefore, recognising the priorities of acknowledging complexity dimensions in cost estimation across similar industries is beneficial in identifying effective practices to reduce cost implications. Hence, the purpose of this paper is to identify the level of importance given to different complexity dimensions in cost estimation and to recognise best practices to improve cost estimation accuracy. Design/methodology/approach An online questionnaire survey was conducted among professionals including estimators, project managers, and quantity surveyors to rank the identified complexity dimensions based on their impacts in cost estimation accuracy. Besides, in-depth interviews were conducted among experts and practitioners from different industries, in order to extract effective practices to improve the cost estimation process of complex projects. Findings Study results show that risk, project and product size, and time frame are the high-impact complexity dimensions on cost estimation, which need more attention in reducing unforeseen cost implications. Moreover, study suggests that implementing a knowledge sharing system will be beneficial to acquire reliable and adequate information for cost estimation. Further, appropriate staffing, network enhancement, risk management, and circumspect estimation are some of the suggestions to improve cost estimation of complex projects. Originality/value The study finally provides suggestions to improve cost estimation in complex projects. Further, the results are expected to be beneficial to learn lessons from different industries and to exchange best practices.