17.6 Integrated Master Planning for Destination Development - Part 6 – Cost Plan

First before getting into the Cost Plan lets remind ourselves what Integrated Master Planning is all about.

Integrated Master Planning - the process of Orchestrating the vast range of technical and professional disciplines in order to execute a development. This includes marketing, environmental analysis, programing, physical planning, economic planning, social planning, execution and operations planning.

In discussing each part of the Integrated Master Planning for Destination Development process, I will use the same methodology which is answering the following questions.

1.   What is the objective of this phase of the process?

To check the design is within the parameters of the business that is being developed.  This includes both the amount to be invested to build the design, but also the potential revenue to be generated by what is developed. 

2.  What expertise is involved in this phase of the process?

The Quantity Surveyor or Cost Estimator is a key professional involved in determining cost as well as the actual designer and engineering consultants.  On the other side of the balance sheet we have the Market Consultant estimating the potential revenue.  This all ultimately needs to be compiled by the Orchestrator and internal Finance Director.  

3.  What are some of the common mistakes?

Cost estimating and revenue estimating should go on throughout the whole development planning process and each stage getting more specific and detailed.  Too often it is either not done until very late in the process when design is already complete or it is done with too little detail and too many assumptions by the estimator and not a true reflection of the design.  This is where the Orchestrator makes sure the level of estimation is appropriate to the stage of progress.

4.  Any other issues that relate to this phase?

A good cost estimator is an essential part of any sizeable development and if engaged throughout the process, the cost can be properly managed. A good development Orchestrator will have a good financial model that can be constantly updated with easy plugins.

The Cost Plan, Physical Planning / Design, and Product Development are all developed in an interactive process together and cannot be seen solely in isolation as a “phase” of development on its own.

Go to previous parts of the series and look for future parts.

Part 1 – Need for a Methodology?

Part 2 – Environmental / SiteAnalysis

Part 3 – Market Analysis

Part 4 – Product Development
Part 5 -  Physical Planning / Design
Part 6 -  Cost Plan
Part 7 -  Business Master Plan
Part 8 -  Site Execution
Part 9 – Operations Management
Part 10 - Review and Revise

Jiwa Studio
Singapore, December 2011
http://jiwastudioweb.blogspot.com/