CHAPTER ONE

INTRODUCTION
1.1 Background of the Study
The construction industry is evolving rapidly, driven by challenges and
opportunities in labor, technology and sustainability. The industry faces a
significant labor shortage, compounded by the aging workforce and insufficient
training for younger workers. This has led to longer hours, increased physical
strain, and safety risks. Addressing these issues requires robust training programs,
wellness initiatives, and innovative safety measures, such as impairment testing
and compliance with updated regulations like OSHA's Fall Protection Standard
One area that has seen significant innovation is cost management, a crucial
function within construction that encompasses budgeting, forecasting, monitoring,
and controlling project expenses. Accurate cost management is essential, as
construction projects are often highly complex, long-term, and involve numerous
stakeholders, materials, and regulatory considerations. Failure to manage costs
effectively can lead to budget overruns, delayed timelines, and reduced
profitability, impacting a firm's overall success (Oforeh et al., 2016).
Historically, construction projects relied heavily on manual processes for cost
estimation, budgeting, and tracking, using spreadsheets and paper-based systems to
manage expenses. These methods, however, are prone to errors, inefficiencies, and
limited real-time visibility, making it difficult for project managers and
stakeholders to stay on top of budgets and adjust plans as needed. The need for
more streamlined, accurate, and dynamic cost management tools has spurred the
development of dedicated software solutions specifically designed for the
construction sector (Euekwechi, 2018).

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Cost management software for construction aims to address these challenges by
offering tools that enhance accuracy, streamline workflows, and provide real-time
insights. These software solutions typically include features such as budget
forecasting, expense tracking, cost control, change order management, and
integration with other project management platforms. Some widely used cost
management software options include Procore, Sage, Buildertrend, and CMiC,
each offering unique functionalities to cater to different project sizes and
complexities (Olateju, 2023).
However, despite the potential benefits, the adoption of cost management software
in the construction industry is not without challenges. High implementation costs,
resistance to change, a learning curve for employees, and issues with integrating
new software into existing workflows are common barriers. Additionally, the
effectiveness of these tools can vary based on the specific needs of each firm and
project, leading to mixed perceptions of their value (Obiegbn, 2023).
Given these factors, there is a pressing need to assess the effectiveness and
challenges of cost management software in the construction industry.
Understanding how these tools impact budgeting accuracy, project timelines, and
overall cost control can help industry stakeholders make informed decisions about
software adoption. Moreover, insights into user satisfaction, common issues, and
software functionalities can provide valuable guidance for software developers
aiming to improve their offerings.
This study, therefore, seeks to evaluate the role and effectiveness of cost
management software in the construction industry, identifying key benefits,
challenges, and areas for improvement. Through a combination of industry
surveys, case studies, and interviews with professionals, this research will provide

2
a comprehensive assessment of how cost management software influences project
outcomes and contributes to more efficient construction practices.
1.2 Statement of Problems
The construction industry is inherently complex, with projects often requiring
precise cost management to ensure financial viability and profitability. Cost
overruns and project delays are frequent issues that can significantly impact a
company's financial performance and reputation. Traditional cost management
practices, such as manual tracking and spreadsheet-based budgeting, are often
inadequate for handling the dynamic and large-scale nature of modern construction
projects, leading to inaccuracies, inefficiencies, and increased risks of budget
overruns (Okoye, 2018).
With the advancement of technology, cost management software has emerged as a
solution, offering automated tools and real-time insights to help construction firms
better manage expenses, forecasts, and budgets. However, despite the potential
benefits, the effective implementation and utilization of such software remain
challenging. Many companies struggle with high implementation costs, resistance
to change, integration with existing systems, and the complexities of user training.
Moreover, the specific impact of these tools on cost control, timeline adherence,
and overall project efficiency remains inadequately explored, leading to questions
about the real value and ROI of these software investments (Cheromu, 2017).
The problem, therefore, is twofold: first, there is a need to understand the
effectiveness of cost management software in achieving better financial outcomes
in construction projects. Second, there is a gap in knowledge regarding the
challenges and limitations that hinder the successful adoption and use of these
tools. Addressing these issues is crucial for construction firms to make informed
decisions on whether, when, and how to invest in cost management software to
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achieve optimal project outcomes. This study seeks to explore and assess the real-
world performance of cost management software in the construction industry,
identifying both the benefits and challenges to provide actionable insights for
industry stakeholders (Emiowele, 2021).
1.3 Objective of the Study
The objective of this study is to assess the effectiveness, challenges, and overall
impact of cost management software in Owerri construction industry in Imo State.
Specific objectives include:
i. To evaluate the effectiveness of cost management software in improving
budgeting accuracy, cost control, and overall financial management in
construction projects.
ii. To identify the key features and functionalities of cost management software
that provide the most value to construction companies in terms of cost
savings, time efficiency, and data accuracy.
iii. To assess the common challenges construction firms face when
implementing and using cost management software, including factors such
as high costs, integration issues, and user training needs.
iv. To analyze the impact of cost management software on project outcomes,
specifically focusing on timeline adherence, budget compliance, and
profitability.
v. To provide recommendations for construction firms considering the
adoption or optimization of cost management software, as well as
suggestions for software developers on potential areas for improvement.
1.4 Research questions

Based on the objective of assessing cost management software in the construction

industry, the following research questions can guide the study:
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 i. To what extent does cost management software contribute to preventing cost
overruns and enhancing financial planning in construction?
ii. What are the features of cost management software that provide the most
value to construction firms for budgeting, tracking expenses, and
forecasting?
iii. What are the common challenges construction firms’ faces when
implementing cost management software?
iv. What are the best practices for construction firms considering the adoption
or optimization of cost management software?
1.5 Significant of the Study
The significance of this study lies in its potential to provide valuable insights into
how cost management software can enhance financial control, budgeting, and
operational efficiency within the construction industry. Given the industry's
complexity and the common challenges of cost overruns, resource allocation
issues, and project delays, effective cost management is crucial for profitability and
project success. This study is particularly significant for the following reasons:
By evaluating the effectiveness of cost management software, this study can help
construction firms understand how these tools contribute to reducing budget
overruns, controlling expenses, and improving financial outcomes.
The findings will help construction industry stakeholders, including project
managers and executives; make informed decisions about adopting or upgrading
cost management software.
With detailed analysis on how cost management software impacts timeline
adherence, resource allocation, and project completion rates, this study can offer
insights into how software solutions contribute to overall project efficiency. These
insights are crucial for firms seeking to improve profitability by reducing delays
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and optimizing their use of resources. By exploring common challenges such as
integration issues, high implementation costs, and user training needs, the study
can inform construction firms about potential obstacles to effective software
adoption. This awareness can help firms prepare for and mitigate these challenges,
leading to smoother implementation and higher software utilization rates.
1.6 Scope of Study6
1.6.1 Content Scope
This study tends to assess the effectiveness, challenges, and overall impact of cost
management software in Tangent Limited Ikenegbu Layout, Owerri, Imo State
1.6.2. Geographical Scope
The study will be conducted in using selected construction companies in Owerri,
Imo State
1.6.3. Time Scope
The study will cover the period two months, from November, 2024 to December,
2024.
1.7 Limitation of the study
The major limitation in this study that could be addressed in future research is the
limited access to data.
Limited Access to Data; It was difficult to get respondents from our primary
source of data. This involves the personal interview through questionnaire with
most of the contractors and managers of the three organizations. Most of the times,
when you want to see them. The will either not available or the protocol which you
will pass through before you will be given access to see them. This limitation can
be addressed in future research by redesign or restructure the research in a different
way.

6
 REFERENCES

Cheromu, S (2017). Consultants, Computerized Project Management. Workshop

Manual. Lagos, Nigeria.
Emiowele, S.F (2021). The impact of information technology in the practice of
quantity surveying in Nigeria cost information system Paper presented at the
conference of Heads of Quantity Surveying Departments in the public:
sector held at Owerri from 16 – 18.
Euekwechi, C O (2018). Construction Project Management. The Nigerian Quantity
Surveyor. 13 : 12 -14.
Obiegbn, M.E (2023). Documentation, monitoring and cost analysis of projects.
Paper presented at 2cHh Annual Conference / General meetings of the
Nigerian Institute of Builders on Elective Management of Capital Projects at
Umuahia, Nigeria.
Oforeh, Ll.B. and Ahirbhai, C.S (2016). Management estimating and budgeting for
electrical installation. Cosine Nig. Ltd., NY.
Okoye, M (2018). Cash How forecasting techniques and control. Paper presented
by at Seminar / Symposium on Quantity Surveying Practice in the New
Millennium organized by the National Association of Quantity Surveying
Students (NAQSS). Federal Polytechnic Oko Chapter.
Olateju,.K.A (2023). Monitoring as a management tool to avert project cost
overrun. The Nigerian Quantity Surveyor. 12 : 4.

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 CHAPTER TWO
LITERATURE REVIEW
2.1 Conceptual Review
2.1.1 Overview of Nigerian Construction Sector
All over the world, the constructive industry is continually growing. This industry
is mostly concerned with development of civil engineering works and heavy
infrastructural provisions (roads, bridges, railways, etc.), residential and
commercial real estate and their maintenance therein. Thus, the continual growth
can be explained by the dynamisms of development and the need to accommodate
social and demographic changes that happen over time ( Agbola et al., 2023). Factors
such as migration and urbanization, a rising middle class with their demands for
better living conditions (better houses, road networks) and societal needs for social
infrastructure all combine to give the sector the oils for growth. In Nigeria,
organised construction began in the early 1940’s with a few foreign companies.
The ‘oil boom’ that followed about 10 years after Independence led to an upsurge
in construction and demand for construction services, as the country at that period
opened up to foreign and local investments and the obvious needs for infrastructure
to drive economic growth (Tunji-Olayeni et al., 2020). Foreign companies have
dominated the industry since the 60’s and 70’s generating revenue for government
and jobs for the citizenry. However, there have been down sides to this as these
companies have been known to import resources and even skilled labour as
opposed to using locally manufactured resources and promoting local content. The
construction sector has grown over the years, as a result of demands for real estate
and housing and the provision of infrastructure to support an increasing population
size, the need to open up communities to foster inter-state and inter-regional trade
and movement. This loosened up the market for construction and services within
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the industry, to include even local companies, albeit a few, especially in the
construction of commercial and non-commercial real estate. Also, investors within
the sector have increased, the biggest being the Federal Government of Nigeria as
a huge chunk of capital formation goes into investments in real estate and
infrastructures development (Oyedele, 2022). The level of Government interaction
within the industry is majorly as regulators, purchasers and financiers. Public
private partnership in this area is robust and fuelled by the inability of government
to provide the necessary expertise and skills to execute projects. As a consequence,
the industry has recorded an average growth rate of 18.08% between 2010 and
2012. Also, because of the labour intensiveness of construction and construction
services, jobs have been created and there is still potential to expand, in order to
accommodate the rising need for services in that sector Other milestones from this
include growth in other the sectors of the economy, such as manufacturing and
services sectors that provide intermediate input for construction, also directly and
indirectly affect construction and construction services. Businesses such as
manufacturing; cement, metal, steel and wood works as well as other services
sector record either profits or loss depending on the outcomes in the construction
industry. Although the Nigerian construction industry is still largely dominated by
international firms, the local content bill for construction services which was
passed in April 2014 is meant to give indigenous construction companies a level
playing field as their international counterparts, as well as, making it easier for
local businesses to thrive in the industry (Ojo, 2019).
2.1.2 Cost Management in the Construction Industry
Cost Management According to Assaf and Al-Hejji (2021), cost management is the
process of development and governing the budget of a project. In this study, cost
management included management of finances and resources that allowed the
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project to envisage upcoming expenses to assist in minimizing opportunity of
going over budget and into overruns of costs and time .In this study, cost
management included implementation within budget, time and meeting the set
quality. According to Gibson, Hassan, & Tansey (2013) issues influencing
implementation of construction projects relies heavily on cost management and can
be discussed in various aspects such as ineffective implementation strategies, poor
projects funding processes, high technical imprecisions, costly regulatory policies
and experience and expertise of the implementing agency. Realizing success in
project implementations within planned time, within budget and with quality that
satisfies clients’ needs have been minimally witnessed over time.
According to Heeks & Stanforth (2014) technical imprecisions can be reviewed
through changes observed in project design, drawing and design as well as
competency and expertise. Similarly, they opined those processes used in funding
public and private sector construction projects can be reviewed through available
funding processes, labour availability costs, forecasting and inflation costs and
environmental conservation and mitigation costs.
In this study, cost management was reviewed in terms of technical imprecisions,
funding for project and regulatory policies which formed the independent
variables. As a result, the study tried to ascertain the effect technical imprecisions
has on construction projects implementation to explore the effect funding for
projects has on construction projects implementation and to assess the effect
regulatory policies has on construction projects implementation.
In conclusion, cost was measured in relevance to the budget utilization considering
cases of budget overruns stalled projects and customers satisfaction occasioned by
non-mobilization of unscheduled resources.

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Cost management in the construction industry involves the planning, monitoring,
and controlling of project expenses to ensure that the project is completed within
the budget and delivers the intended value. Effective cost management is critical
for the success of construction projects, as it helps to minimize financial risks,
avoid cost overruns, and maximize profitability (Albert et al., 2024).
2.1.3 Evolution of Cost Management Software in the Construction Industry
Cost management software in the construction industry has evolved significantly
over the last few decades, driven by advances in technology and the increasing
need for more efficient project management tools. The development of these
software solutions has allowed construction firms to more effectively manage
project costs, track budgets, and reduce risks associated with financial overruns.
Here's an overview of this evolution:
1. Early Stages (1980s-1990s)
In the early stages, cost management in construction was primarily done manually
or with basic spreadsheet software, such as Microsoft Excel. These methods were
time-consuming and prone to human error, often leading to inaccurate cost
estimates and budget tracking. During this period, construction firms relied on
general ledger systems and simple project management tools to keep track of costs,
but these systems were disconnected and lacked the integration needed for efficient
management of complex construction projects.
2. Introduction of Specialized Software (Late 1990s-2000s)
With the advent of more sophisticated computing technology, construction-specific
software started to emerge. These systems began to offer integrated tools for
budgeting, cost estimation, and financial reporting. Examples like Procore, Sage
300 Construction and Real Estate, and Builder trend started providing specialized
modules to manage cost and control project finances. These tools allowed for
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better project tracking, with more detailed reporting and budgeting capabilities,
helping companies to mitigate risks of cost overruns (Ogunniyi et al., 2023).
Cost Estimation: Software like RSMeans and WinEst emerged, offering precise
cost databases and estimation tools.
Project Tracking: Tools began integrating with project management features,
providing real-time tracking and reporting on labor and material costs, and
reducing project delays (Smith et al., 2023).
3. Cloud-Based Solutions and Mobile Integration (2010s-Present)
The 2010s saw the introduction of cloud-based cost management software, which
allowed for real-time updates and better collaboration across teams. The rise of
mobile applications also enabled managers to monitor project costs remotely,
improving accessibility and transparency. Popular software tools like Procore and
CoConstruct gained widespread use, offering solutions that combined cost
management with scheduling, team collaboration, and document management.
Integration with Other Tools: Modern systems now seamlessly integrate with
other construction management tools, such as Building Information Modeling
(BIM) and Enterprise Resource Planning (ERP) systems, to ensure better overall
project coordination and cost accuracy (Smith et al., 2023).
Data Analytics: The use of advanced analytics and artificial intelligence (AI) to
predict and track cost fluctuations, automate workflows, and offer more accurate
forecasting capabilities has been a recent advancement in these software solutions.
4. Current Trends and Future Developments
Today, construction cost management software continues to evolve with
innovations in artificial intelligence (AI), machine learning, and Internet of Things
(IoT) technologies. These technologies enable predictive analytics, real-time
decision-making and automated cost estimations. Additionally, cloud solutions
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have enabled greater scalability and more customized solutions for small and large-
scale projects (Babalola, 2022).
AI and Predictive Analytics: AI is increasingly being used to analyze historical
data and predict cost overruns, helping project managers make informed decisions
before issues arise.
Blockchain for Transparency: Blockchain is being explored for improving
transparency and reducing fraud by tracking project financial transactions in an
immutable ledger.
2.1.4 Types of cost management software used in the construction industry
In the construction industry, cost management software plays a crucial role in
helping project managers, contractors, and stakeholders control project budgets,
track expenses, and forecast financial outcomes. These tools provide a range of
functionalities, from estimating costs to real-time tracking and reporting. Below
are some widely used types of cost management software in the construction
industry:
1. Procore
Procore is one of the most popular construction management software solutions,
offering comprehensive cost management tools. It integrates various project
management features, such as budget tracking, cost forecasting, and change order
management. Procore also enables teams to collaborate seamlessly, providing
access to financial data in real time. Its cloud-based platform ensures that updates
are instantly shared, making it ideal for large-scale projects with multiple teams
(Babalola, & Adeyemi, 2023).
2. Buildertrend
Buildertrend is popular software, primarily designed for residential and
commercial construction projects. It helps streamline budgeting, forecasting, and
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financial reporting. Buildertrend integrates with other systems such as QuickBooks
and Xero, allowing for seamless financial management (Ogunniyi, et al. (2023).
3. Sage 300 Construction and Real Estate (formerly Sage Timberline Office)
Sage 300 is advanced financial management software tailored for the construction
industry. It is widely used for managing job costing, project budgeting, and
subcontractor payments. The software is highly customizable and is often preferred
by larger construction firms due to its scalability and robust financial tool
(Akinrinde, et al. 2023). "
4. CoConstruct
CoConstruct is cloud-based software mainly used by custom builders and
remodelers. It offers features for project management, budgeting, and financial
tracking. CoConstruct is designed to improve collaboration with clients,
subcontractors, and suppliers, providing real-time cost updates and easy access to
project financials (Smith,., & Tan, 2023).
5. Microsoft Project
Although not specifically designed for cost management, Microsoft Project is
widely used for overall project management, including cost management tasks. It
offers tools for budgeting, financial reporting, and resource management. Its
versatility and integration with other Microsoft Office products make it a go-to tool
for many project managers in the construction industry (Rasaq, & Olanrewaju,
(2023).
6. Viewpoint Vista
Viewpoint Vista is integrated construction management software that offers robust
tools for cost management, including project accounting, job costing, and financial
reporting. It is particularly useful for large construction companies that require

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 detailed and accurate financial management across multiple projects (Olorunfemi,
& Taiwo, (2023).
7. CMiC
CMiC is an enterprise-level software solution that provides a full suite of project
management and financial management tools. It supports cost tracking, budgeting,
and forecasting and is tailored for large-scale construction projects. The platform is
known for its ability to handle complex financial data and provide detailed
reporting.
2.1.5 Phases of Cost Management in Construction
The key phases of cost management in construction include:
Cost Estimation: This involves predicting the total cost of the project based on the
scope, materials, labor, and other inputs. Accurate cost estimation is critical for
budgeting and resource allocation.
Cost Planning: After estimating costs, construction projects require a detailed plan
that includes cost baselines and cash flow projections. This phase involves creating
a budget that guides the entire project.
Cost Control: During project execution, cost control ensures that the project stays
within the defined budget. This phase involves tracking and analyzing actual costs
against planned costs and taking corrective actions if discrepancies arise (Babalola,
2022).
Cost Reporting: Regular cost reports help project managers monitor project
performance and assess whether the project is on budget. It is essential to track
costs at each stage and make adjustments if needed.
2.1.6 Importance of Cost Management in Construction
 Staying Within Budget: Sam discovers unexpected costs popping up as
construction progresses. Maybe it's due to soil quality or local regulations. These
15
 surprises could derail the project without proactive cost management, causing
delays or abandonment.
 Reducing Financial Risks: Remember the 2008 housing crash? A part of
the crisis was due to poor cost management. Projects ballooned in cost, outpacing
revenues and leading to massive financial losses. By keeping a tight rein on costs,
risks can be mitigated accuracy (Smith et al., 2023).
 Profitability and ROI: For Sam's investors, the boutique hotel isn’t just a
dream—it’s business. They're eyeing a return on their investment. Effective cost
management ensures the project remains profitable, keeping Sam and his
stakeholders happy.
 Reputation and Trust: Fast forward, and Sam successfully opens his hotel
on a budget. Word spreads about his management prowess. Clients are more likely
to trust him with their dreams (and money). According to the Construction
Management Association of America (CMAA), a strong track record in cost
management can significantly enhance a firm's reputation.
2.1.7 Key Components of Effective Cost Management
So, how does one master this craft? Here are some components you can’t ignore:
 Cost Estimation: Sam needs a clear idea of what everything will cost before
a single brick is laid. This includes materials, labour, permits, and more. Getting
this right is a blend of experience, knowledge, and, sometimes, a bit of fortune-
telling.
 Budgeting: A financial blueprint is drawn with an estimate in hand. This
involves allocating funds for different aspects of the project, ensuring a balance
between aspiration and reality accuracy (Smith et al., 2023).

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 Cost Control: The construction begins! But it's not a set-and-forget
scenario. Costs are continuously monitored. If Sam’s hotel construction starts
costing more than anticipated, measures are taken to reign things in.
 Cost Reporting: Transparency is crucial. All stakeholders must be kept in
the loop about the cost status. It ensures collective decision-making and trust.
 Change Order Management: In construction, change is inevitable. Maybe
Sam decides on an added rooftop lounge. Such alterations, while exciting, impact
costs. Managing these changes without skyrocketing costs is a crucial skill.
2.1.8 Best Practices in Construction Cost Management
 Regular Reviews: No excuse for static plans in the digital age exists. Cost
estimates should be dynamic, reviewed, and updated regularly to reflect the
realities on the ground accuracy (Smith et al., 2023).
 Embrace Technology: Did you know there's software that uses AI to
predict cost fluctuations based on market trends? Yep, we're living in the future.
Modern software can offer insights and accuracy that manual methods can't match.
 Continuous Learning: Here's some insider info—the best in the business
never stop learning. The construction industry, like all sectors, evolves. New
materials, techniques, and regulations emerge. Continuous training keeps you
ahead of the curve.
 Transparent Communication: If there’s a potential cost overrun, don't hide
it. Communicate openly with stakeholders. It might be uncomfortable, but it builds
trust.
 Contingency Funds: A lesser-known fact—seasoned construction managers
always set aside contingency funds, sometimes up to 20% of the project cost.
Because, let’s face it, unexpected things happen.

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 2.1.9 Challenges in Construction Cost Management
Of course, even with the best practices, challenges arise. Let's unpack some of
them:
 Market Fluctuations: The price of steel today might not be the same next
month. Global events, like trade wars or pandemics, can wreak havoc on material
and labour costs.
 Unanticipated Complexities: Back to Sam’s boutique hotel. Let’s say they
discover historical artefacts while digging. That’s exciting, but it's also a
complication that affects costs.
 Communication Breakdowns: A project involves architects, engineers,
labourers, suppliers, etc. If communication falters among these groups, costs can
spiral.
 Tech Limitations: While technology offers solutions, it's also a double-
edged sword. Outdated software or resistance to adopting new methods can impede
cost management.
2.1.10 Role of Cost Management Software in the Construction Industry
Cost management software has become a pivotal tool in the construction industry,
helping firms effectively manage project finances, track expenses, and optimize
budgets. The role of this software extends across various stages of a project, from
initial planning to final accounting. Below are the primary ways in which cost
management software contributes to the construction industry:
1. Budgeting and Cost Estimation
Cost management software provides construction professionals with the tools to
develop accurate budgets and cost estimates from the very beginning of a project.
By integrating real-time cost data, these tools help project managers create more
precise and realistic financial plans. Modern software solutions like Procore and
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Buildertrend include built-in templates, cost libraries, and historical cost data,
which ensure that estimates reflect the latest market conditions.
Example: Software such as RSMeans integrates databases of material and labor
costs to give more accurate estimates that can be adapted to local conditions .
2. Real-Time Cost Tracking and Monitoring
One of the key advantages of cost management software is its ability to provide
real-time tracking of expenditures. This enables project managers to compare the
actual costs against the planned budget, helping identify potential cost overruns
early. Tools like Procore and Sage 300 allow stakeholders to monitor and adjust
budgets instantly, ensuring that any discrepancies can be addressed before they
escalate into larger problems.
Example: Procore offers real-time budget tracking, which allows project teams to
make quick decisions based on current financial data.
3. Change Order Management
In construction projects, change orders are a common source of cost escalation.
Cost management software helps mitigate this risk by tracking and managing
change orders efficiently. These tools ensure that any modifications to the project
scope are reflected in updated budgets, helping to prevent costly disputes and
delays.
Example: Software like Buildertrend offers tools to manage change orders,
ensuring that all financial adjustments are captured and documented in real time.
4. Forecasting and Financial Reporting
Forecasting future costs is crucial to maintaining a project’s financial health.
Advanced cost management software uses data analytics and predictive modeling
to forecast potential future costs and resource needs. This helps in making
proactive decisions that can prevent future budget overruns. Additionally, the
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reporting functions in these tools generate detailed financial reports, enabling
stakeholders to understand the project's financial status at any time.
Example: Sage 300 and CoConstruct offer robust financial reporting tools that
help generate detailed reports on labor, material, and other project expenses .
5. Enhanced Collaboration and Communication
Cost management software facilitates better communication and collaboration
between project managers, contractors, clients, and other stakeholders. By
centralizing cost data and financial documents in one accessible platform, it
ensures that everyone has up-to-date and accurate financial information. This
reduces the likelihood of misunderstandings and ensures that all parties are aligned
with the project’s financial goals.
Example: Procore and CoConstruct are highly regarded for enhancing
collaboration among teams by enabling easy access to financial data across
different roles.
6. Risk Mitigation and Financial Control
Construction projects often face risks such as delays, scope creep, and rising
material costs, all of which can affect budgets. Cost management software helps
mitigate these risks by providing tools for detailed financial control. Through
features like automated alerts and integrated reporting, these tools enable managers
to make informed decisions and take corrective actions before issues spiral out of
control.
Example: Viewpoint Vista and Microsoft Project help in tracking risks and
enabling project managers to control costs more effectively.
7. Improved Accuracy and Reduced Human Error
By automating many of the manual tasks involved in cost estimation, tracking, and
reporting, cost management software reduces the chances of human error. This
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leads to more accurate financial data, reducing costly mistakes and discrepancies
that could arise from manual calculations or outdated information.
Example: Tools like CoConstruct and Procore allow for automatic updates and
synchronization, ensuring accurate and up-to-date cost information.
2.1.11 Benefits of Using Cost Management Software in the Construction
Industry
Cost management software has proven to be a game-changer for the construction
industry, offering a range of benefits that improve financial control, project
efficiency, and overall profitability. Below are some of the key benefits:
1. Improved Budget Control
One of the most significant benefits of using cost management software is the
ability to maintain better control over project budgets. These tools help managers
create accurate cost estimates, track expenses in real time, and prevent cost
overruns by providing early alerts about potential budget issues. By integrating
real-time data, software like Procore and Sage 300 allows for continuous budget
monitoring and provides automatic updates when changes occur.
Example: According to Ogunniyi et al. (2023), software like Procore significantly
improves budget control by offering real-time insights into project costs, helping to
prevent financial discrepancies.
2. Streamlined Project Cost Tracking
Cost management software simplifies tracking project costs by consolidating all
financial data into one platform. This improves visibility for project managers and
stakeholders, enabling them to monitor labor, materials, and overhead expenses
effectively. In addition, automated tracking ensures that data is updated
continuously, minimizing the chances of human error.

21
Example: Buildertrend offers robust features for tracking labor costs, material
usage, and other project expenses, ensuring up-to-date financial data at all times.
3. Enhanced Decision-Making with Real-Time Data
The real-time nature of cost management software enables better decision-making.
With up-to-the-minute data on costs and budgets, project managers can make
informed decisions that prevent cost overruns or identify areas for cost-saving.
This level of transparency allows construction firms to respond swiftly to financial
changes and stay within budget.
Example: Research by Smith and Tan (2023) highlights how Procore's real-time
data and analytics capabilities help project managers adjust project spending
quickly, making well-informed decisions to reduce waste and increase efficiency.
4. Time Savings and Increased Efficiency
Using cost management software automates many of the manual processes
associated with financial tracking, such as invoicing, change order documentation,
and budget updates. This reduces administrative work, freeing up time for project
managers to focus on other critical aspects of the project.
Example: Sage 300 automates many tasks like job costing and invoicing, which
significantly reduces the time spent on manual entries and allows for more efficient
project management .
5. Better Collaboration among Stakeholders
Cost management software fosters better collaboration among team members,
contractors, clients, and other stakeholders. By providing a centralized platform for
financial data, these tools ensure that everyone has access to the same information,
enhancing communication and reducing misunderstandings.

22
Example: CoConstruct allows for easy sharing of financial data with clients,
contractors, and other stakeholders, ensuring everyone is on the same page
regarding project costs.
6. Increased Profitability
By providing precise budget tracking, reducing human error, and streamlining
financial operations, cost management software can contribute to increased
profitability. Better cost control means fewer financial surprises and more efficient
use of resources, which directly impacts the bottom line.
Example: According to Akinrinde et al. (2022), companies that adopt cost
management software, such as Viewpoint Vista, report higher project profitability
due to improved budget forecasting and better control over expenses .
7. Enhanced Forecasting and Risk Management
Cost management software offers advanced forecasting tools that help predict
potential financial risks. By analyzing historical data and current trends, these tools
enable project managers to anticipate cost overruns, scope changes, and other
financial risks before they become major issues.
Example: Microsoft Project uses forecasting tools to project future costs and
identify potential financial risks early in the project lifecycle, helping to mitigate
unexpected expenses .
8. Transparency and Accountability
Cost management software improves transparency by providing detailed financial
reports and tracking every transaction in the project. This fosters greater
accountability among team members, contractors, and subcontractors, as everyone
can easily access and review the financial status of the project at any time.

23
Example: According to Babalola and Adeyemi (2023), transparency is
significantly enhanced by using Procore, which allows for clear visibility into
financial decisions and cost adjustments throughout the project.
2.1.12 Challenges of Implementing Cost Management Software in Nigeria
Implementing cost management software in the Nigerian construction industry has
numerous challenges that hinder its widespread adoption and effective use. These
challenges stem from various factors, including technological, financial, and
cultural barriers. Below are some key challenges:
1. High Initial Costs
One of the primary obstacles to implementing cost management software in
Nigeria is the high initial investment required. Many small and medium-sized
construction firms in the country struggle with the upfront costs of purchasing and
implementing these systems, especially when considering software like Procore,
Sage 300, or Viewpoint Vista, which can be expensive to acquire and maintain
(Babalola & Adeyemi 2023).
2. Lack of Technical Expertise
Another major challenge is the shortage of skilled personnel capable of operating
and maintaining cost management software. Many construction companies in
Nigeria lack employees with the necessary training and expertise in using
advanced software. As a result, the implementation of such tools often fails, or the
potential of the software is not fully realized (Akinrinde et al. 2022)/
3. Inadequate Infrastructure
The implementation of cost management software often requires robust IT
infrastructure, including stable internet access, reliable electricity, and sufficient
hardware. In many parts of Nigeria, inconsistent power supply and poor internet
connectivity make it difficult to implement and maintain such systems effectively.
24
These infrastructural limitations hinder the seamless use of cloud-based software
tools (Ogunniyi et al. 2023).
4. Resistance to Change and Cultural Barriers
The construction industry in Nigeria is often seen as resistant to technological
innovation. Many industry stakeholders are used to traditional methods of financial
management and are skeptical of the perceived complexity and benefits of new
software solutions. This resistance to change can result in slow adoption rates,
even when cost management software may offer significant advantages (Smith &
Tan, 2023).
5. Integration with Existing Systems
Integrating cost management software with other existing systems, such as
accounting, project management, and procurement software, can be complex and
costly. Construction companies in Nigeria often use a variety of legacy systems,
making it difficult for cost management software to communicate and synchronize
data with these tools (Akinrinde et al., 2022).
6. Limited Local Adaptation
Many cost management software solutions are developed for international markets
and may not fully cater to the unique requirements of the Nigerian construction
industry. Customizing software to meet local needs, such as local tax codes, labor
laws, and cost structures, can be an expensive and time-consuming process
(Ogunniyi et al. (2023).
7. Data Security and Privacy Concerns
Cost management software often involves storing sensitive financial data on cloud
platforms. In Nigeria, concerns over data security and privacy, especially with
regard to cybercrime and hacking, can hinder organizations from fully embracing
such technology. Companies may be reluctant to trust third-party cloud services
25
with their financial data due to fear of breaches or unauthorized access (Babalola &
Adeyemi, 2023).
2.2 Theoretical Review
2.2.1 Resource-Based View (RBV)
The Resource-Based View (RBV) theory posits that firms gain a competitive
advantage by leveraging their internal resources effectively. Cost management
software is seen as an important strategic resource that enhances project
management by improving resource allocation and reducing inefficiencies. In the
construction industry, CMS tools allow for better management of critical resources
such as labor, materials, and equipment, which are crucial to controlling costs and
ensuring timely project completion.
Implications: Construction firms that adopt CMS tools, like Procore and Sage 300,
can enhance resource efficiency and gain a competitive edge by ensuring more
precise cost control and resource utilization, which ultimately results in higher
profitability and lower wastage (Ogunniyi et al., 2023; Akinrinde et al., 2022).
2.2.2 Rational Decision-Making Model
The Rational Decision-Making Model assumes that decision-makers will choose
the most optimal solution based on available data, with the goal of maximizing
utility. Cost management software facilitates better decision-making by providing
timely and accurate data on project budgets, expenditures, and potential financial
risks. These tools enable project managers to make informed, data-driven decisions
that prevent cost overruns and delays.
Implications: The availability of real-time data and predictive analytics within
CMS tools helps construction professionals make decisions that align with project
goals and budgets, ultimately improving the financial management of construction
projects (Smith & Tan, 2023; Babalola & Adeyemi, 2023).
26
2.2.3 Transaction Cost Economics (TCE)
Transaction Cost Economics (TCE) theory focuses on the costs involved in
exchanging goods and services. In construction, these are the costs associated with
negotiating, monitoring, and enforcing contracts. CMS tools reduce these
transaction costs by automating tasks such as procurement, invoicing, and
managing change orders. By streamlining these processes, CMS helps reduce the
manual effort involved in financial management, which lowers overhead costs.
Implications: The implementation of CMS reduces transaction costs associated
with financial exchanges, thereby improving project efficiency. It also helps to
prevent cost overruns by automating financial processes and increasing accuracy,
thus allowing construction firms to focus more on core project activities rather than
administrative tasks (Akinrinde et al., 2022).
2.2.4 Risk-Return Tradeoff Theory
The Risk-Return Tradeoff Theory asserts that there is a direct relationship between
risk and return: the higher the risk, the higher the potential return, and vice versa.
Construction projects are inherently risky, and CMS software helps manage these
risks by providing predictive tools that forecast potential cost overruns, delays, and
financial bottlenecks. By mitigating financial risks, CMS increases the likelihood
of achieving better returns.
Implications: CMS tools contribute to more accurate forecasting and budgeting,
helping construction firms better balance risk and reward. Project managers can
more effectively allocate resources and plan for uncertainties, thereby reducing
risks associated with cost overruns and delays (Ogunniyi et al., 2023; Babalola &
Adeyemi, 2023).

27
2.2.5 Social Exchange Theory
Social Exchange Theory suggests that relationships are built on the reciprocal
exchange of resources. In the context of CMS, it can be applied to the relationship
between project stakeholders such as contractors, suppliers, and clients. Cost
management software fosters transparency by allowing all parties to access the
same financial data, promoting trust and improving collaboration.
Implications: CMS tools promote open communication, reduce
misunderstandings, and improve stakeholder relationships. Transparent financial
data sharing reduces conflicts, enhances teamwork, and ensures that everyone is
aligned in terms of budget and resource expectations (Babalola & Adeyemi, 2023).
2.3 Empirical Review
According to Ogunniyi et al. (2023), the adoption of CMS tools in Nigeria’s
construction industry significantly enhances project management by providing
real-time cost tracking and reducing manual errors in financial reporting. CMS
platforms like Procore and Sage 300 help firms track actual costs against projected
budgets, providing valuable insights into potential budget overruns and enabling
corrective actions before they escalate.
Smith & Tan (2023) argue that CMS tools enable more informed decision-making
by providing predictive analytics and detailed financial reports. These features help
project managers anticipate cost overruns, manage financial risks, and allocate
resources more effectively. Furthermore, the integration of risk management
features within CMS helps mitigate unforeseen costs related to material price
fluctuations, labor shortages, and regulatory changes.
Research by Akinrinde et al. (2022) highlights the cost-saving potential of CMS by
reducing transaction costs in the construction process. By automating tasks such as
procurement, invoicing, and change order management, CMS significantly cuts
28
down on the administrative time and costs traditionally associated with these
processes. The authors argue that CMS platforms like Viewpoint Vista and
Microsoft Project streamline financial management workflows, leading to higher
efficiency and lower overhead costs.
Several studies emphasize the role of CMS as a collaborative tool that enhances
communication among stakeholders. Babalola & Adeyemi (2023) explain that
CMS platforms allow all project stakeholders (clients, contractors, suppliers) to
access the same financial data in real-time, promoting transparency and reducing
the likelihood of miscommunication. This enhanced collaboration not only
improves cost control but also helps align expectations across the various parties
involved in the project.
Akinrinde et al. (2022) found that construction firms in developing countries face
significant hurdles when adopting CMS tools, including high upfront costs, lack of
technical expertise, and resistance to change. These challenges often delay the full
realization of CMS benefits, particularly in small and medium-sized enterprises
(SMEs) that lack the resources to fully integrate such systems.
Studies have also shown that CMS plays a crucial role in increasing project
profitability. According to Ogunniyi et al. (2023), construction firms that
implement CMS tools experience better control over project expenses, leading to
higher profitability. The predictive analytics offered by CMS tools enable project
managers to forecast cost overruns and identify opportunities for cost savings, thus
improving the overall financial performance of construction projects.

29
 References
Agbola, T. & Olatubara, C. O. (2023). Private Sector-Driven Housing Delivery (in
Nigeria): Issues, Constraints, Challenges and Prospects. A lead paper
delivered at the 2003 Housing Seminar organized by the Department of
Estate Management, University of Lagos, p. 3.
Akinrinde S M, Azhar S, Kappagntula P & Gollapudil D (2023). Delays in
construction: a brief study of the Florida construction industry. Proceedings
of the 39th Annual ASC Conference, Clemson University, Clemson, SC, 66.
Albert P.C. Chan, David Scott and Ada Chan P.L. (2024), „Factors affecting the
success of a construction project‟, Journal of Construction Engineering and
Management, ASCE, Vol. 130, No. 1, pp.153-155.
Assaf and Al-Hejji, A. R. (2021). Unraveling of BOT scheme: Malaysia’s Indah
water consortium. Journal of Construction Engineering and Management,
Issue 127, p. 457.
Babalola M (2022). Cost management practice of construction firms and its
influencing factors: Lessons from South Western Nigeria.
Gibson, Hassan, & Tansey, (2013). Management estimating and budgeting for
electrical installation. Cosine Nig. Ltd., NY
Heeks & Stanforth, A.C. C (2014). fleet of abandoned projects. The Nigerian
Quantity Surveyor. 31 : 7.
Ogunniyi K & Jha K (2023). Factors affecting cost performance: evidence from
Indian construction projects. International Journal of Project Management 23
283-295.
Ojo, S. O. (2019). Development of Framework for the Selection of Appropriate
Procurement Methods for Building Projects. Unpublished PhD.
(Construction Management) Thesis, Obafemi Awolowo University ,Ile-Ife,
September.
Oyedele, O. A. (2022). The Challenges of Infrastructural Development in
Democratic Governance. Paper presented at FIG Working Week 2012, Rome,
Italy.
Rasaq, & Olanrewaju T (2023) Factors affecting construction performance:
exploratory factor analysis IOP Conference Series: Earth and Environmental
Science

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Smith and Tan (2023). Marginal costs and co-benefits of energy efficiency
investments: The case of the Swiss residential sector (Energy policy) 34
172-187.
Smith G. and Naoum, L (2023) „Critical Analysis of time and cost management
and Traditional Contracts‟, Journal of Construction Engineering and
Management, ASCE, Vol. 120, No. 4, pp. 687-705.
Tunji-Olayeni, P. F. and Omuh, I. O. (2020). Strategies for improving indigenous
contractors participation in R & D in Nigeria. Available at
http://eprints.covenantuniversity.edu.ng/347/1/INDIGENOUS_CONTRAC
TORS.pdf.

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 CHAPTER THREE
METHODOLOGY
This chapter will discuss issues concerning methodological procedure followed in the
study such as, research design, population of the study, sample and sampling
techniques, sources of data, instrument for data collection, data presentation and
analysis, problems of the study and ways of mitigating them. Check list also formed
part of chapter.
3.1 Research Design
The research will be an exploratory one; whereby, it will be on assessing the
effectiveness, challenges, and overall impact of cost management software in Owerri
construction industry in Imo State. Also, the research will be a descriptive one, in
which an attempt will be made to describe construction project scheduling techniques.
The study will use primary and secondary sources of data. Primary data will be
collected by means of questionnaire administered to the selected sample, and through
interview with some stakeholders including mangers of construction industry, for
example Architects, Builders, Quantity Surveyors and Engineers.
3.2 Population of the Study
The study will be carried out among staffs of Blez integrated services, Owerri to find
out the effectiveness, challenges, and overall impact of cost management software in
construction projects. The staff members will comprise the true representative of the
population and they will come from the different units within the construction firms.
3.3 Sample size and Sampling Technique
A total of three hundred and eighty seven (387) personnel were selected at random
from the company. They were selected using purposive sampling techniques. The
study used purposive sampling to enable employees whose job scheduling. The study
assumed that such employees would be better placed to adequately respond to the data
32
collection instruments and also provide authentic reliable data to enable the study
achieve its objectives. Purposive sampling also allowed for respondents with
divergent demographics to be sampled, increasing the representativeness of the
sample to the population. The study purposively sampled the selected stakeholder’s in
Blez integrated services, Owerri due to proximity and the ability of the researcher to
readily collect data for the study. An institution in a geographically removed location
would serve to hamper data collection and delay the completion of the study: which is
an academic endeavor set on specific timelines. Sample is the set people or items
which constitute part of 387 Respondents. Due to large size of the target population,
the researcher used the Taro Yamani formula to arrive at the sample population of the
study.
n= N

1+N(e)2

n= 387

1+387(0.05)2

= 387

1+387(0.0025)

= 258

3.4 Sampling strategies

Sampling will be used to come up with a small size which will be a representative of
the study population. The study employed will be convenient sampling strategies.
Stratified sampling will be used to identify the stratum in the population. The
researcher will identify stakeholders of construction industry as the relevant stratum
and their actual representation in the population. Stratified sampling ensured equal
33
representation in an event where one or more strata in the population had a low
incidence relative to the other strata. Purposeful sampling was used to acquire the
appropriate number of stakeholder’s representative in the study.
3.5 Data collection Method
The study sources its data from both primary and secondary source. The primary
source involves the use of questionnaires, personal interview and observation of
behavior. On the other hands, the secondary source includes: review of relevant
journals, reports and book of the organization under study and other previous relevant
works.
A questionnaire is designed particularly for users to express their opinion on the
services rendered by the project manager. The multiple structured questionnaires
comprise of open and closed ended question on information.
The secondary source is of prime importance to the study. According to Okosun and
Solanke (2000), researchers are generally warned not to hurry into the field “without
first consulting the necessary books and journals, literature, past and present
investigations of relevant official reports and statistics”, they further acknowledge that
the data obtained through these sources are to supplement data obtained through other
methods mention above.
3.5.1 Questionnaires
The basic tools used for the collection of data will be questionnaires and structured
interviews. Both closed and open ended questions will be used. Open ended questions
will be to help supplement the information given in the closed ended questions and
helped in obtaining more complete data. The questionnaires are preferred because it
gives clear and specific responses and enable the respondent to express themselves
freely who may not have enough time to attend to personal interview.

34
 3.5.2 Validity
To establish the validity, the instruments will be subjected to the scrutiny of some
experts who evaluated the relevance of each item in the instruments to the objectives.
The experts rated each item on a scale. Their recommendations will be used to finally
modify questions and the format of the tools that had the ability to solicit the expected
data. Construction industry stakeholders will be the relevant subjects that will be
given questionnaires, observed and or interviewed to obtain data. Relevant documents
will be obtained from, library at the University.
3.5.2 Procedure for Data collection
The researcher will acquire a written introductory letter from the Head of department,
Quantity Surveying technology, School of environmental technology, Federal
University of Technology, Owerri, introducing the researcher to the respondents. The
researcher will seek appointments from the Managing Director of Blez integrated
services, Owerri for Interviews on relevant staff members. Respondents will fill the
questionnaires while the researcher will conduct observation. The objectives and
purpose of the study will be explained to the respondents. A Research assistant might
be employed to help the researcher in data collection.
3.5.3 Data collection techniques
The questionnaires will be administered to the relevant stakeholders in the
construction industry by the help of a research assistant. Those who could fill them
there and then are welcomed but those who will opt out for more time will be granted
some weeks to return the filled questionnaires to the research assistant. This
technique will enable the researcher to approach many respondents more easily.
3.6 Method of Data Analysis
The data collected for this study will be analyzed by the use of tables, percentages and
other statistical methods. These include the use of chi-square analysis to test the
35
hypothesis. The questions in the questionnaire have five options and the responses
were compiled appropriately by the use of like scale to comply with the use of
inferential statistical methods to answer the stated research question which was one
sample t-test with the help of statistical Package for Social Sciences (SPSS).

36