This month a radical new standard launches that will create a universal system for measuring the cost of construction projects.
The construction sector is one of the largest in the world economy with an estimated $10 trillion spent on construction related goods and services every year. While construction has rapidly moved from being a local to a global industry, the way it measures and reports costs varies significantly from one market to the next. This makes it difficult to compare project costs, hampering decision making and creating barriers to investment.
This month the International Construction Measurement Standards (ICMS) launches. The global initiative creates a common language for the sector and defines a universal system for measuring the cost of construction projects, allowing comparisons to be made on a like-for-like basis between countries.
Before ICMS launches, find out the top four ways it will revolutionize the construction industry:
- Common terminologies and nomenclature
Cost grouping description vary enormously around the world, making it difficult to compare costs on a like-for-like basis. Currently, there is no common global understanding for what is included or excluded from a ‘construction cost’ – leading to variances of up to 30%. ICMS allows a common terminology to be adopted for construction costs and principal components and identifies the key cost drives using standard terminology –leading to the collection of data that can be interrogated, searched and compared.
- Technology-friendly format
With the ever-increasing use of BIM in construction, professional standards need to inform the technologists of the form, content and structure of data needed in their work processes. ICMS achieves this at an over-arching global level by aligning taxonomies across buildings and civil engineering and across design classifications and cost reporting. Software vendors are already seeing the potential to use ICMS in global cost benchmarking and the relative simplicity of the standard encourages data collection.
- Standard cost data
Easier and more robust comparisons and benchmarking between projects in different global, regional and intra-national markets are made possible through the use of ICMS. ICMS is also detailed enough to allow key design comparisons to be made in both scenario option planning and risk management.
- Unifying a fragmented profession on a global scale
The financial management of construction projects is carried out by different players in different markets. Unlike other global professions, there is no unified global approach to providing the certainty and transparency that investors and clients in construction demand. ICMS is an important first step in harmonizing this approach to enable more consistent decision-making, better regulation, a template for education and training and improved project outcomes.
These are just a few of the ways ICMS will shape the future of the global construction industry. Register for a free informational webinar on August 15th, hosted by the vice chair of the ICMS Standard Setting committee, Alan Muse, to learn more about this radical new approach to improve the quality of cost data and reporting in construction.