Project leaders have never felt so pressured to improve efficiency: margins keep shrinking, projects grow more complex, access to craftspeople is squeezed, and wage pressure mounts.
Many general contractors have turned to construction management technology to power processes and people, minimize project delays, and measure project performance with confidence. To deliver a project on time and under budget, project teams have to efficiently manage “the digital world” – all the information, communication, and actions that support the physical asset build.
What’s the scope of your digital load? Take a look at some average commercial and residential construction projects managed on Oracle Aconex:
- ~$50-200M project value: 729 people collaborating across 142 organizations, 702K mails exchanged, and 1.8M actions taken across RFIs, change orders, and other processes
- ~$200-300M project value: 580 people collaborating across 124 organizations, 445K mails exchanged, and 1.2M actions taken across RFIs, change orders, and other processes
- ~300-750M project value: 1,153 people collaborating across 162 organizations, 2.3M mails exchanged, and 7M actions taken across RFIs, change orders, and other processes
How are you managing all of this? Is your information slowing you down? What if you could accelerate and improve your project performance?
In August 2016 we asked contractors from ENR’s “Top 400 US Contractors” list how they are dealing with the digital load. We identified three levels of technology maturity, and three challenges rose to the top.
Contractor Technology Maturity:
- Level 1, Manual Methods: These contractors use paper, email and spreadsheets to manage project communication across RFIs, change orders, bids, submittals, drawings, payment applications, site instruction, forecasting, and so on. They’ve invested in technology for corporate purposes like finance and accounting but in little or nothing specific to project management.
- Level 2, Construction Management Apps: These contractors have invested in project management software mapped to specific processes, often called “point solutions” (i.e. a mobile application that captures site inspections). Planning, commercial, and projects departments use different systems for contracts, scheduling and project cost management, in conjunction with email and spreadsheets. IT teams struggle to integrate these disconnected systems. Some use collaborative systems, where project members outside the organization can login and participate in project processes.
- Level 3, Construction Management Platform: Although few contractors we spoke to were at this level, many aspired to reach it. These contractors invest in software spanning most processes; they see the value in connecting departments and organizations on a single technology platform. They strive to increase scale, efficiency, and project-to-project learnings (so they don’t reinvent the wheel for every new project) by standardizing how they manage their project portfolio.
The top three contractor challenges we identified are…
Challenge #1: “Maintaining secure, undisputed records of all formal project communications among owners, subcontractors and other project partners.”
Why this happens based on their maturity level:
- Level 1: When project information is buried in documents, spreadsheets and email, it’s easily lost or tampered with.
- Level 2: When each department or organization on the project maintains its own records, there’s no single authoritative source; each party has its own version of the truth and wastes resources on figuring out who’s right. Locating a needed document can take weeks—or months.
- Level 3: Even if every project member is connected on a single construction management system, if that system isn’t party-neutral, whoever “owns” the system can modify or delete communications and documents. Contractors then must keep two sets of records to defend themselves in potential disputes. Security is also a concern: the system may not support single sign-on, two-factor authentication, or mobile device management to protect project information.
Impact: Without an agreed-to single source of truth, decision making and project performance bog down. Costs, time, and resources spent on disputes are off the charts. Lack of information security can be a deal-breaker for general contractors and their stakeholders. Collectively, these threaten a contractor’s reputation.
Challenge #2: “Setting up software to match our processes.”
Virtually all contractors agree that software must be easy to configure and flexible enough to work with their own internal processes; 81% perceived this as a current problem.
Why this happens:
- Level 1: Tools like email, spreadsheets, and their own databases do little to streamline or drive construction processes.
- Levels 2: Point solutions that are on-premise require a steep investment in IT resources. It takes months to years to get the system up and running, much less map the system to the company’s unique processes.
- Level 3: Most software platforms are either highly configurable and start with a blank slate or are “out-of-the-box.” Contractors often favor out-of-the-box systems because it helps them get up and running quickly, but they invest without knowing the downside to rigidity.
Impact: When contractors can’t configure software to map to their most impactful and high-volume processes, they can’t drive workflows or project performance. Project members won’t use the technology. Limited cross-organizational collaboration, poor data quality, and multiple systems confound contractors seeking improved efficiency.
Challenge #3 “Managing and reporting performance across a portfolio of projects.”
This was a top challenge and a top priority; 91% agreed managing and reporting performance across a portfolio of projects is critical to business success.
Why this happens:
- Level 1: When project information is buried in documents, spreadsheets, and email, it takes ages to: track down the status of every project change (including pending change orders), measure progress to date, and gain a clear picture of the estimate at completion. Once the information is collected across teams, consolidated, verified, and transformed into a digestible format like the common S-curve, the information is weeks out of date. Effort and time is multiplied across an entire portfolio of projects. Merging data between spreadsheets can also create errors that throw off the entire forecast.
- Level 2: Point solutions help alleviate Level 1 challenges, but the fundamental problems remain because contracts, schedules, and other key project information are managed in separate systems. It still takes weeks to assemble a single view of performance—especially one easily comprehended by project directors. RFIs, change requests and their cost impacts are trapped in one system, project forecasting in another. Cost impacts don’t hit the forecast for weeks, delaying visibility.
- Level 3: These contractors seek to consolidate processes into a single system for faster, easier project and portfolio reporting. Why might they still face challenges?
- The system reporting capability may be difficult to use or not produce reports at the necessary level.
- The system may have been built for a specific vertical, level of project complexity, or project role; it wouldn’t be flexible enough to meet a diverse portfolio’s needs. When different systems are used across projects, portfolio reports are delayed & often out of date.
- Finally, companies may struggle with portfolio reports because they don’t capture enough data. Subcontractors may abandon a hard-to-use system or the system may not accommodate enough of their processes. Subs might also resist a system that isn’t party-neutral. Again, when system “owners” can manipulate and delete information, companies lose trust and feel compelled to keep their own separate records.
Impact: Project leaders lack real-time visibility into progress and performance. Without understanding where they’ve been or where they are going, they can’t pinpoint problems or start fixing them. “Cost blowouts” occur towards the end of the project, and by then it’s too late to take action. Lack of standardization across a project portfolio means contractors aren’t learning from project to project, a missed opportunity for efficiency.
Which of these technology maturity levels sounds like your organization? What are your top technology challenges? Give us your comments!
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