Naderi, M; Nazari, A; Shafaat, A and Abrishami, S (2025) Enhancing accuracy in construction overhead cost estimation: A novel integration of activity-based costing and building information modelling. Smart and Sustainable Built Environment, 14(3), pp. 758-775. ISSN 2046-6099
Abstract
Purpose: This study addresses the prevailing complexities and limitations in estimating and managing construction overhead costs (COCs) in the existing literature, with the purpose of enhancing the accuracy of cost performance indicators in construction project management. Design/methodology/approach: An innovative approach is proposed, employing the activity-based costing (ABC) accounting method combined with building information modelling (BIM) to assign real overhead costs to project activities. This study, distinguished by its incorporation of a real case study, focuses on an administrative building with a four-story concrete structure. It establishes an automated method for evaluating project cost performance through the detailed analysis of earned value management (EVM) cost indicators derived from ABC results and BIM data. Findings: The results show that the ABC integration improves the accuracy of cost performance indicators by over 9%, revealing the project's true cost index for the first time and demonstrating the substantial value of the approach in construction engineering and management. Research limitations/implications: The current study highlights a notable gap in the existing literature, addressing the challenges in onsite overhead cost estimation and offering a solution that incorporates the state-of-the-art techniques. Practical implications: The proposed method has significant implications for project managers and practitioners, enabling better-informed decisions based on precise cost data, ultimately leading to enhanced project outcomes. Originality/value: This research uniquely combines ABC and BIM, presenting a pioneering solution for the accurate estimation and management of COCs in construction projects, adding significant value to the current body of knowledge in this field.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | 5D BIM; activity-based costing; automated cost control; building information modelling; construction overhead costs; earn value management |
| Index terms: | estimation, cost index, project outcome, building information modelling, onsite, case study, project manager, costing, cost data, concrete structure, construction engineering, construction project management, value management, earned value management, project cost, accuracy, cost estimating, accounting, body of knowledge, estimating, complexity, cost performance, cost control, construction project, methodology, integration, state of the art, practitioner |
| Subjects: | building construction, production management, structural engineering, research methods, accounting and finance, knowledge management, economic analysis, practitioner, research dissemination and communication, project completion, information systems, systems engineering, organizational analysis, professional development, project management theory and practice, management, engineering methods, economics, financial and cost management, control systems, data collection methods, profession |
| Topics: | Value Management, Project Management, Engineering Principles, Digital Applications, Organizational Design, Cost Management, Business Strategy, Research Practice, Information Management, Roles and Professions, Construction Technology |
| Descriptive scope: | 4 PCTE |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here