It’s no secret that good budget control is more than tracking costs; good budget control is establishing and managing to a target set of monetary goals. On projects, we call this Target Value Design or Target Costing.

Over the years, the most successful projects, whether large-scale facilities or smaller renovations, are projects where all parties are practicing “open budget control” and candidly sharing budget expectations and information early in the planning and design stages—a time when even minor suggestions or innovations can have a profound impact. For example on the UCSF Medical Center project, currently under construction in San Francisco’s Mission Bay, the team was able to drive more than $100 million out of the project. They did this through the collective ideas of the people and companies designing and virtually building at the project’s Integrated Center for Design and Construction during detailed construction document development well before the construction start.

How does it work? The first step in the process is validation, which requires inputs from appropriate stakeholders to validate the business case, program and initial cost of a project. In other words, verifying what is needed and what is allowable for the project.

Once the bar, or initial budget target, is set, cross-functional teams of design professionals, modelers and builders mobilize for major disciplines and scopes to form discipline-specific “Clusters.” These Clusters are responsible for designing and modeling different scopes, such as Mechanical/Electrical and Equipment & IT, to the designated target costs. The objective of the Clusters: To provide “virtual pricing” consistent with an accurate model that helps keep designers informed of cost trends in real time.

Each Cluster has a leader accountable for the Cluster’s budget, coordination and design completeness, essentially the best value for that scope. The Cluster Leaders also coordinate and integrate throughout the design process and into construction to address any design questions.

Key to this process is transparency. Customers rely on the team’s expertise to deliver accurate estimates as major business decisions often hinge on the potential cost of a project. At the same time, teams rely on customers to be forthright with all components of the budget, including IT infrastructure, Furniture, Fixtures & Equipment, Escalation, Project Management, and anything else that may affect the success of overall budget performance. In our experience, when all the information is not shared, disappointments can easily occur down the road over what is included and not included in construction estimates.

Involving the right team members and having a high level of openness at an early stage allows for a more accurate, informed overall project budget control. It also helps to build greater alignment and accountability in reaching and holding to those target goals throughout a project’s duration—in turn, offering greater certainty in project outcomes and savings to the owner.