Construction projects are among the most complex ventures globally, demanding efficient management of time, resources, and finances. In India, a rapidly growing economy, cost control and effective coordination in construction are critical for success and long-term sustainability. Global factors, including fluctuating commodity prices, labour shortages, and economic volatility, directly affect construction costs. However, lessons from global practices can guide Indian construction companies in managing costs more effectively and ensuring smooth project coordination by integrating local strategies with international insights. Importance of cost control in construction Cost control is essential for completing projects within the allocated budget without compromising quality. Failing to manage costs can lead to cash flow issues, delays, reduced profitability, and reputational damage for construction firms. Several global factors influencing cost control include: Global commodity prices: The construction industry is highly dependent on raw materials, and fluctuations in commodity prices due to geopolitical events, trade restrictions, and supply chain disruptions significantly impact project budgets. Labour availability: A shortage of skilled labour in the construction industry increases labour costs, which, in turn, affects project budgets. Technology costs: The construction sector is adopting mechanisation and digitalisation to minimise manual labour involvement. Technologies such as Building Information Modelling (BIM), drones, and automation are being integrated into project execution. However, the cost of these technologies adds financial pressure if not utilised efficiently. Regulatory requirements: Stringent regulations related to safety, environmental standards, and labour laws affect construction companies worldwide. Failure to meet these regulations can lead to cost increases, delays or legal challenges. Global measures for effective cost control To address financial risks, the construction industry globally has developed several cost-control measures that can be applied in India for better cost management and coordination. Advanced digital tools: Globally, construction companies use digital platforms like ERP and BIM to track project costs in real-time, allowing managers to adjust budgets and resources as needed. These tools integrate financial planning with other project aspects, improving coordination between teams. Value engineering: Value engineering evaluates construction methods and materials to find cost-saving opportunities without compromising quality. This global practice helps companies replace expensive materials with affordable alternatives, optimise techniques, and reduce waste, thus improving budget management. Early supplier involvement: Engaging suppliers early in the project planning phase allows construction companies to gain insights into material availability, pricing trends, and alternative solutions, helping in more informed procurement decisions. Modular construction and prefabrication: Modular construction and prefabrication allow components to be manufactured off-site, resulting in a more efficient use of materials and labour. Though initial costs may be higher, these methods reduce on-site labour expenses and construction timelines, improving overall cost management. Risk management and contingency planning: Globally, risk management is critical for controlling construction costs. Developing contingency plans for potential risks such as natural disasters, supply chain disruptions, or legal disputes ensures that projects remain financially viable. Construction companies use risk management tools to anticipate cost overruns and allocate resources, minimising financial exposure. Effects of poor cost control Poor cost control in construction can negatively affect not only the project but also the long-term sustainability of the company. The most common consequences include: Project delays: Budget overruns can hinder the procurement of materials and payment of labour, causing project delays. These delays lead to extended timelines, higher interest costs, and penalties for missing deadlines. Reduced profit margins: Cost overruns eat into profit margins, limiting opportunities for growth and future investment. Construction firms operating on thin margins risk bankruptcy if costs are not managed properly. Compromised quality: To recover from budget overruns, companies may cut corners by using substandard materials, leading to quality and safety issues, increased maintenance costs, and potential legal liabilities. Strained stakeholder relationships: Escalating costs can strain relationships with clients, suppliers, and subcontractors. Clients may lose trust in the firm’s ability to deliver projects on time and within budget, risking future business opportunities. Legal and regulatory challenges: Uncontrolled costs can lead to legal disputes, especially when projects fail to meet contractual obligations. Disputes over payments, timelines, or work quality may escalate into litigation, increasing financial strain on the company. The path ahead India’s construction industry must adopt global best practices while addressing local challenges. A structured action plan is essential for maintaining cost control and coordination across projects. Comprehensive digital platforms: Investing in digital platforms like SAP and BIM can enable real-time tracking of costs, resources, and schedules. These systems improve coordination across teams and help anticipate cost overruns before they escalate. Value engineering: By reviewing construction methods and materials at the planning stage, companies can identify cost-saving opportunities without sacrificing quality. Supplier and contractor relationships: Strategic procurement practices, such as location-based rate contracts, ensure cost efficiency and timely material availability across projects. Early supplier involvement helps manage material costs and reduces the risk of time and cost overruns. Additionally, maintaining a database of reliable subcontractors and suppliers enables smooth project execution and stronger supply chain management. Modular construction and mechanisation: Modular construction and mechanisation are crucial for improving constructability, reducing costs, and enhancing project timelines. Off-site prefabrication minimises on-site labour, improves quality control, and streamlines assembly. Mechanisation, through the use of cranes, launchers and precision tools, enhances efficiency and safety, leading to faster project delivery while maintaining high-quality standards. Risk management: Implementing robust risk management processes, including contingency plans for supply chain disruptions or regulatory changes, ensures that projects remain financially viable despite unforeseen challenges. Execution excellence: Strengthening the planning and monitoring function by integrating advanced tools, processes, and personnel will help address execution challenges. Emphasising execution excellence, with a focus on First Time Right (FTR), will ensure smooth project handovers and quality delivery. Inventory management: Efficient use of materials and inventory management are key to cost control. Accurate demand forecasting and just-in-time procurement reduce waste and excess stock, freeing up capital. Advanced inventory management systems will enable real-time tracking of materials, preventing overstocking or shortages.Training and development: Continued focus on workforce training and development is vital to cost control. Enhancing skills in material usage, inventory management, and new construction technologies will improve operational efficiency and reduce the errors that lead to cost and time overruns. Cost control and coordination are critical to the success of construction projects, especially in a competitive market like India. By learning from global best practices and integrating them with localised strategies, Indian construction companies can ensure long-term sustainability and deliver high-quality projects that meet client expectations while contributing to national growth. About the author Nagesh Veeturi, Executive Director– Civil, KEC International, has 35 years of experience in the industrial, real estate and infrastructure sectors. In the past six years, he has played a key role in expanding KEC's civil business unit significantly.