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How to be a Certified Cost Professional (CCP): facts you must know

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How to be a Certified Cost Professional (CCP): facts you must know
Business means being profitable. Like any other business, one of the business objectives of any Engineering, Construction and Project Management (ECPM) enterprise or project is to be profitable.
 
Effective cost management is the prime focus to let the business keep making a profit. Cost management in ECPM is more challenging than other businesses. This is due to the fact that the cost management in ECPM industry is not merely business economics, finance management, and accounting, but it also covers a knowledge domain of engineering and project management. This leads to rather a new discipline that encompasses knowledge areas of engineering, cost management, and project management together, with primarily focus on bottomline of an enterprise or a project. This discipline is Cost Engineering.
 
"Cost engineering is the engineering practice devoted to the project cost management, involving such activities as estimating, cost control, cost forecasting, investment appraisal, and risk analysis."[1] "Cost Engineers budget, plan, and monitor investment projects. They seek the optimum balance between cost, quality and time requirements."[2]
 
Certified Cost Professional (CCP) is a globally recognized certification in the field of Cost Engineering. This certification is administered by Association for the Advancement of Cost Engineering (AACE) International. AACE International is US based nonprofit organization. They claim to be The authority of Total Cost Management™. Since 1956, AACE International has been the leading-edge professional society for cost estimators, cost engineers, schedulers, project managers, and project control specialists.
 

The intent of CCP certification is to recognize specialists who meet a demanding set of cost and management criteria by a rigorous examination, experience, education and ethical qualifications.


1: Introduction to Certified Cost Professionals (CCP) Certification (formerly CCE/CCC Certification)

ELIGIBILITY/EXPERIENCE REQUIREMENTS:

In order to be eligible for CCP certification you must have least 8 full years of professional experience, of which up to 4 years may be substituted by a college/university degree. In other words, if you have a college/university degree of 4 years you need another 4 years of experience and so on.
 
Related degrees includes engineering, building construction, construction technology, business, economics, accounting, construction management, architecture, computer science, mathematics, etc.

EXAM STRUCTURE & FEES

The CCP exam contains two components: the multiple choice written exam and the 2,500 word technical paper. To pass the exam you must meet the minimum overall score of 70% in order to successfully pass the exam.
 

1. Technical paper:

The Certification Board recommends your technical paper topic be something with which you are already familiar, such as a project you have done at work or something in which you have acquired a great deal of expertise in your professional career. The chosen topic is not as important as your ability to communicate through your paper. Be sure to follow the recommendations described by AACE International.


2. Multiple choice exam:

Second component of the certification process is a multiple choice exam. This exam is delivered through computer based testing (CBT) and is comprised of multiple-choice and compound, scenario questions. The topics covered in the exam are: Basic Cost Engineering Skills & Knowledge, Economic Analysis, Project Management, and Cost Estimating and Control.
 
As such there is no percentage breakup on as to how much each knowledge area shall be covered in the exam. However, the exam contains large number of numerical problem solving questions. Numerical problem solving question cover following cost engineering topics in-depth:
 
1. Breakeven Analysis
2. Time Value of money and economic analysis
3. Depreciation
4. Critical Path Method
5. Earned Value Management
6. Statistics
 
The CBT exam contain 120 questions (maximum). The exam duration is 5 hours and all questions are mandatory. This is one sitting exam, while you can take very short break, however, the clock shall be on during the break time.
 
Exam is close book, this means you are not allowed to carry any books or paper, but an onscreen formula sheet is accessible during the exam, if needed. You are also permitted to bring any style of calculator, including programmable calculators, to use during the exam.
 
Exam fee is $500 for AACE International members, $625 for non-members. There is a $200 fee for re-sit.
 
All the relevant information about CCP exam is available on AACE International website on this link.
 

HOW TO PREPARE FOR CCP CERTIFICATION

I shall not say it is tough to be a CCP, but yes it is challenging. Having obtained both PMP and CCP certification, and a master degree in construction management, let me tell you, in my opinion CCP is 2.5 times tougher than PMP. Out of 2.5, first 1 represents the amount of efforts you have to put to prepare the technical paper, and other 1.5 represents in-depth coverage of cost engineering knowledge areas. When comparing my master degree in terms of coverage of cost management knowledge areas, CCP coverage is substantially more than any construction management master program.

Let us discuss couple of important points on how to prepare CCE certification exam.

1. Time plan

As I said before CCP certification is challenging, this means you need a good amount of time and effort to get a CCP certification. Most commonly asked question is how much time it required for CCP preparation. Answer of the question depends on the individual. However, minimum time window of 7 - 9 month is good in my opinion. I suggest following timelines:
 
1. Understand the CCP Certification requirements (0 month).
2. Decide that you got to be CCP in next 10-12 month (1 month).
3. Get study material (1 to 1.5 months).
4. Acquaint yourself with knowledge areas, and identify knowledge area you need more attention (2 - 2.5 months).
5. Decide the technical paper title, and collect relevant literature and data for technical paper. (3 month).
6. Write Technical Paper (4 - 6 month).
7. Start Exam preparation (5th month).
8. Register for exam (minimum 45 days prior to exam).
9. Submit technical paper (on the latest by final registration deadline)
10. Take exam (7 to 9 month).
 

2. Study Material

AACE International recommends following resources for preparing CCP exam:
 
- 'Skills & Knowledge of Cost Engineering', 5th edition
- 'CCP Certification Study Guide', 3rd edition
- Recommended Practices 'RP 11R-88' and 'RP 10S-90'
 
All of the above and published by the AACE International and available for purchase on their website. ‘Skills & Knowledge of Cost Engineering’ is the main book. This contains following section:
 
1. Cost
2. Cost Estimation
3. Planning and Scheduling
4. Progress and Cost Control
5. Project Management
6. Economic Analysis
7. Statistics Probability and Risk
 
For passing the exam it is recommended that you have thoroughly understood the book. While the book is generally a standalone knowledge base, however, certain section may require additional study material. Especially the concepts of Time Value of Money and Cash Flow, Breakeven Analysis, Statistics and Earn Value Management. The book contains only a few practice questions.
 
AACE International ‘CCP Certification Study Guide’, 3rd edition is the second book. This is skimmed version of ‘Skills & Knowledge of Cost Engineering’ book. In my opinion this book helps only in revision. ‘Skills & Knowledge of Cost Engineering’ remain the primary study material.
 
Recommended Practices RP 11R-88 and RP 10S-90 are ‘Required Skills and Knowledge of a Cost Engineer’ and ‘Cost Engineering Terminology’ respectively. Both are good documents and worth thorough reading, irrespective of their specific relevance to exam questions. Both recommended practices are available for free on AACE website.

The book can be bought online through AACE International Website on this link. Each of two books costs $50 for AACE International members and $80 for non-members.
 

3. Seeking help

At times it becomes difficult to dedicate time for study especially when you have a busy work schedule and an obligation to spend certain time with family. Lack of motivation for study becomes an issue as well.
 
This is where you can seek for external help i.e. joining training classes . Following are the key issues must be considered while choosing an training provider:
1. A classroom CCP Review/Prep course may cost you $1000 to $5000 depending on training provider.
2. You may not find training provider in you geography. In that case an AEP that offers e-learning course can be an option. In my experience e-learning is better for busy professionals. E-Learning course are flexible and cost-effective also.
3. Unlike PMP certification, there is no requirement of PDUs for taking the CCP exam. Therefore, you may prepare for CCP certification on your own. However, this may be longer and a tougher journey.
 
At Protrain we provide an online course for CCP preparation. Course fee starts from $425. Complete Table of Contents of the course is available on this link on the course page. And introductory lecture video can be viewed on the link here.
 

BEYOND CCP CERTIFICATION

After you have obtained the certification, there is still more to talk about. CCP certification program requires you to recertify every 3 years by either professional credit plan or re-testing. The recertification program by credit plan is designed to ensure that you have maintained continued expertise through work experience, continuing education, professional development, and active involvement in the profession.

This recertification plan opens a new door of professional development opportunities. AACE International has one of the biggest and probably the most extensive, knowledge repository on cost engineering and related knowledge areas in the world. This contains recommended practices, articles and other several resources on claim management, risk management, project management, economic analysis, cost estimation, scheduling and so on. To be in the network with professional bodies like AACE International provides for continued professional development and learning opportunities.

1 "Provoc - Glossary of Common Project Control Terms," The Association of Cost Engineers (ACostE)
2 AACE International Recommended Practice No. 10S-90, COST ENGINEERING TERMINOLOGY, TCM Framework: General Reference, AACE, 2010, pg 24
 
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