We have entered a new era for benchmarking

For many years now, the cost consultant has collected data and analysed it in a way that attempts to give insight to clients. By understanding key cost and value drivers of construction, and through comparison with other schemes, the consultant helps to explain why costs sit at a particular point within a range.

Such benchmarking can have its limitations, but it serves as a useful guard against complacency. It poses questions as to why certain aspects of the scheme are showing a markedly different cost compared with the same aspect of other, similar schemes.

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Asking and answering these questions also provides a structured and comparatively objective way of discussing with the client the cost of a particular scheme against the range of costs demonstrated by similar projects. This can reinforce confidence in the estimate and the sense that the answer represents value.

Those consultants who do it well can provide valuable insight into construction economics and the influences which drive things in a particular direction, and the amount of cost and design data inputs that can be collected and analysed is vast.

We are now in an era where both “new-build” and “BCO standards” are far from given

This information – and how it is used – normally gets the ear of the client as the commonly held view that knowledge is king is often too tempting to resist. Plus, of course, there still remains the motivation to secure improved performance for the scheme in terms of it being “on point” when it comes to hitting key metrics and targets.

All of this has historically been quite easy to do, as buildings of a certain asset class (take central London offices, for example) have mostly been straightforward to contrast and compare, with new-build projects generally being built to BCO standards. The development of new-build offices in the capital over the past 30 years has allowed a significant data set to be established for cost and design benchmarking studies.

However, we are now in an era where both “new-build” and “BCO standards” are far from given. It is likely that future development in this space will be more unique than standard, including the manner in which construction is delivered. Some schemes are embracing modern methods of construction, and others perhaps not so much.

The point is that “apples for apples” benchmarking is now more likely to become a much more varied basket of fruit and, therefore, more difficult to draw meaningful insight on a comparable basis.

The area that will gather particular momentum will be that of carbon benchmarking

This does not mean that the benchmarking concept becomes lost. It merely becomes different. The hope is that this new era of more site-specific and unique development analysis (including how existing assets are re-used) puts more emphasis on cost-effective solutions to challenges, rather than simple comparisons between a lot of the same.

The creation of detailed case studies for projects showcasing how schemes have delivered effective cost and carbon results would be very valuable and insightful for clients, and therefore, I’m sure, very welcome.

While it is inevitable that cost benchmarking will take a slightly different tone over coming years, the area that will gather particular momentum will be that of carbon benchmarking. This is already occurring, but very much on a broad estimated basis.

Over time, however, the accuracy of this data will improve and help to guide design decision-making far better. This, in turn, will help to solve the real challenge of how to build responsibly for a sustainable future.

Iain Parker is a founding partner at cost consultant Alinea