The true role of a cost consultant

In the early stages of a major programme, cost estimates are often treated as if they’re carved in stone. But in reality, they’re more like pencil sketches: rough outlines based on limited information, not final blueprints. 

Cost consultants are often brought in to put a price tag on ambition. But when the scope is still fluid and the design is a moving target, the numbers they produce are best understood as directional rather than definitive. They offer a ballpark, not a binding contract. 

The real challenge is that these early estimates are sometimes mistaken for promises. But until the design is solidified and contractors have weighed in on how the work will actually be delivered, any cost figures are not complete forecasts. And even then, final estimates should be framed as ranges, not absolutes, because the world doesn’t stand still. Inflation, supply chain volatility, and labour dynamics are among many factors that impact the final cost outcomes of any project.  

The revisiting and reevaluating of estimates should take place throughout a programme’s lifecycle as more accurate information becomes available. That’s because cost consultancy, at its best, is less about predicting the future and more about preparing for it. It’s about building in resilience, not just precision. 

Overly optimistic 

Our recent report, 'The Future of Major Programme Delivery' noted that work and estimates by cost consultants are often compromised by inaccurate or incomplete data. But large-scale infrastructure programmes tend to operate in a high-stakes environment in which political timelines, public scrutiny, and funding approvals demand clarity and certainty. The pressure to produce exact figures early on can backfire. It encourages a kind of numerical theatre, where the goal becomes hitting the right number rather than reflecting the real risks. 

To get a project through the gate, it often needs to pass a cost-benefit test. But these models are incredibly sensitive; tweaking one assumption can tip the whole equation dramatically. This creates a temptation to downplay costs or overstate benefits, not out of malice, but because the system rewards optimism. 

Psychologists Amos Tversky and Daniel Kahneman coined the term 'the planning fallacy' and described it as our tendency to underestimate how long things will take and how much they’ll cost. They also identified the 'inside view', where planners focus narrowly on their own project without learning from the outcomes of similar ones. Together these contribute to ‘optimism bias’. 

Learning from the past: a smarter way to forecast 

These cognitive biases aren’t entirely avoidable. Across the world, our industry is working to bypass human nature and come up with more accurate costs. In Hong Kong, teams have adopted a method called reference class forecasting. Instead of building estimates from scratch, this approach looks at a database of similar completed projects and uses that historical data to inform new forecasts. 

This top-down method has proven to be more accurate than traditional bottom-up estimating. A study by the Project Management Institute found that when Australia’s State Road Authority used reference class forecasting, their cost estimates became twice as accurate. 

The UK Government has also embraced this approach through the HM Treasury Green Book, which recommends adjusting early estimates upward based on real-world data. It’s a way of grounding ambition in evidence. 

Trading false starts for firm foundations 

Many large-scale projects falter before they even begin, driven by the unrealistic cost assumptions that optimism bias, incomplete designs, and misread data, can influence. These flawed foundations lead to inaccurate baselines and set programmes on a path that is difficult to correct. 

A more evidence-based approach can counter this. Reference class forecasting offers a way to ground estimates in reality by drawing on the outcomes of similar, completed projects. Instead of relying solely on detailed breakdowns of current plans, it looks outward at what has actually happened before and uses that data to inform what is likely to happen next. 

When used alongside conventional estimating methods, this approach can significantly reduce the likelihood of cost and schedule overruns. It brings a level of realism that is often missing in the early stages of planning, tempering overconfidence, and helps ensure that decisions are based on probability, not just possibility. 

Cost consultancy as a collaborative ecosystem 

Accurate estimates are a powerful tool for programme planning, but this doesn’t mean they can be taken as gospel as they are. Cost estimates should always be treated as living baselines; not static figures to be locked in early but as reference points that must evolve as the project progresses. As designs mature and more data emerges from suppliers and market forecasts, we need to revisit and refine those estimates. That’s not a flaw in the process; it’s a sign that the system is working. 

Estimating isn’t a standalone task. It must be deeply connected to procurement strategy, supply chain realities, and the constructability of the design. Without those links, it risks becoming a theoretical exercise. Cost consultancy is part of a wider ecosystem that thrives on collaboration across disciplines. It’s not just about numbers; it’s about integrating commercial insight with delivery expertise to shape better outcomes. 

Planning for reality, not perfection 

In an environment where complexity is the norm and change is constant, the ability to plan with realism is more important than ever. By embracing methods that reflect how projects actually perform – as opposed to how we hope they will – we can build stronger, more resilient programmes from the outset. The future of cost consultancy lies not in perfect prediction, but in informed preparation. And that begins with learning from the past.