Hello everyone. In my module, here, I will be talking and explaining some methods when it comes to construction cost control. So far, what we are covering in the beginning of the course was more focused on construction cost estimation. Now, we want to go to that next step of how we want to control the cost and the budget during the project, in the entire project, as well as work segments or the work packages or activities we have in the project. So let's start from a big picture and then we'll go into the methods that are available for us and go much deeper into the most common method being used in our industry. So what is control? Control functions tend to look at the past and the present rather than as planning, in Course 1, the future. The function of control ensures by measurements and by corrections that objectives and plans are accomplished in your project. I just want to highlight quickly, before we move forward, as a rule of thumb, of course, the cost of implementing a control system, or cost control system, must certainly be less than the cost of savings achieved by its implementation or by implementing that control system. So this is a rule of thumb. You want to make sure what you're investing in, you're getting more rewards than the cost that you're paying and developing the control system for. Now, how do we control is another question. How we do control depends on two elements. One, measurements, two, actions. Actions, which must be initiated, if in measurements, show some variance or variations from those that expected in the beginning, in the planning of the schedule. You have to have in mind that measurements will only be meaningful if they can be compared with expectations. So you want to compare what's your measuring with what you're expecting to be able to do that correct and the right actions of any variance in the schedule. There are two general types of control. There's the real-time control, and there is what we call the trend control. So for the real-time control, it is usually achieved by comparing the actual value of a performance major to its plan value. Also, it is important to have a control limits, which are set in order to asses the severity of any deviations in the plan. When we speak about deviations, deviations that are larger than a predetermined value are the news to trigger corrective action. And that's what we talked about, about actions, measurements and actions. Based on the philosophy of management by exception, actual deviations from plans alter management to focus on a particular problem that needs attention. Now, for the second type of control, we talked about the real-time control. The second type of control is trend control. It is based on forecast of future performance measures. Actual values of the performance measures are extrapolated into the future in an effort to detect deviations before they occur. Forecast of a future deviations trigger what we call preventive actions, which designed to avoid or minimized future problems. So this is a quick overview and introduction between how do we control from a real-time and a trend point of a view. To have actions and to have preventive actions. I would also love to add that in our industry, the construction industry or the AEC industry, the process is one of a highly variable nature that can give rise to the generation of a vast amount of data, what we call about big data science, or analytics. It's a huge topic. It's catching up a lot in several industries. We have to learn from other industries to help in our own industry. But when we talk about big data, just like a brief intro here, the challenge is to identify what data is needed and what data could be convert to information or could be information, and how to switch from data to information, to intelligence. Now, it is important also to differentiate between systems, which produce routine record keeping, transaction recording data, from those which are intended to support and facilitate decision-making. We will be giving an example of how technology is used in such field in this course later, not in this module, with two well-presented to guest speakers from the industry. Now, let's speak about the types of cost control methods we have in this module. Based on the literature and based on speaking with a lot of people in the industry, including those who work on construction, cost estimation, course control for several years, what you'll find in, actually, several textbooks, you will find several control methods. I highlighted here a couple of them to go as an introduction to this field, and we will focus only in one of these methods that are most commonly used in our industry. And most probably, you're going to be using it in addition to some of those in your projects.
