Understanding stakeholders' perspective of cost estimation in project management

Cost overrun is a chronic problem across most projects. While a significant research have been published on this topic, the understanding of the root causes and a clear direction towards improvement remained unexplored. The focus of the past research is mainly on the factors directly or indirectly associated with the project environment and their relative impacts on overall cost performance in projects. In contrast to such traditional approach, this research aimed to establish a conceptual model by identifying the underlying issues associated mainly with the perceptions of the board stakeholders involved over entire lifecycle of projects. Based on a structured interview with a few selective organisations, data was collected and a few rich pictures were developed over every phase of project development. By employing the soft system methodology, the rich pictures were later trasformed into the concept models for potential establishment of a new body of knowledge in the field. Among the findings, it has been revealed that at the project inception stage, political and legislative factors play significant roles in the business case development. Statutory compliance and environmental issues are perceived to be critical in influencing cost performance in projects. The resulting concept model on cost overrun is expected to fill a significant knowledge gap in cost estimation practice across all industry sectors.