Construction businesses have faced unprecedented demand for their services in the last decade. Despite this, many find it difficult to remain profitable and generate revenue proportionate to the amount of work they do. As business operations become more challenging, good project management practices become indispensable.
Research shows that the construction industry has underperformed for the last two decades, with time and cost overruns becoming regular occurrences. Project managers in the construction sector face unique operational challenges, and the pandemic has only exacerbated them. Fortunately, there are tools that can help. Integrated project management software helps construction companies deal with these challenges and improve the way they operate at all levels.
Common project management challenges faced by construction companies
Keeping projects under budget
Between managing labor costs, supplies, external vendor charges, and burden, project managers have to deal with a variety of financial challenges and might not always follow the recommended practices to keep them in check. As a result, construction projects are regularly over budget by as much as 80%. Considering the shrinking workforce and low productivity growth in the sector, keeping projects under budget and having access to comprehensive spending data is key for construction businesses to maintain profitability.
Poor communication between internal and external stakeholders
The construction industry is notoriously siloed, and this remains true when considering communication techniques employed during a project by internal and external stakeholders. Between disparate chat groups and email chains, communication among stakeholders in a construction project can be inconsistent, bereft of context, and difficult to access. As a result, various teams operate on different information. This can lead to increased costs due to rework, higher instances of human error, and mistrust between divisions.
Managing overlapping timelines and schedules
Manpower requirements often change from day to day and the shrinking workforce available to construction businesses means that employees are often responsible for multiple jobs and activities. This can be difficult to manage when daily, safety, and progress reports are completed on paper and sent to a back office for processing. This takes time and increases the workload of an increasingly stretched back office.
Why you need integrated project management software
Consolidate all your operational data in one place
Construction projects rely on a large amount of data to ensure compliance, safety, and operational efficiency. Safety forms, progress reports, time logs, and email communications are usually collected and stored in different forms on different platforms, making it difficult for business leaders to extract information when they need it. Disparate data sources also encourage the formation of information silos.
Integrated project management software makes it easy to keep all this information in one place since it combines:
- Digital forms that are accessible across the business
- A communications platform that allows employees to link messages with the relevant contextual information
- Unified document storage
Make better business decisions with advanced data analysis
As a result of deeply entrenched information silos, it can be hard for business leaders to take a holistic view of their operation — even more so if the information collected through various means is outdated when it reaches the desk of the decision-maker.
With the help of software-based solutions, business leaders can ensure that all information is collected and assessed in real-time. This allows managers to identify and resolve potential safety or operational issues quickly. Integrated project management software can also help managers automate this process by identifying points of inefficiency and recommending solutions.
Save money with better financial management
According to a PwC report, construction businesses, on average, wait 83 days for payment. This lag between service completion and payment has the potential to create cash flow problems for construction businesses and can prevent them from taking up new projects or continuing work on current projects. Effective financial planning and resource management are extremely important to a business’s survival. With the help of software, business leaders can factor in the time needed for payments to come through, plan for any resource shortage, and identify areas for cost-cutting, should the need arise.
To effectively plan for financial situations, business leaders must consider many factors, including external vendor payment terms, current cash flow, and predicted income. The complicated nature of such a process means that human error will always be a factor, but the use of automation and software-based solutions can reduce that significantly. In addition to these benefits, proper financial planning can also improve the relationship between the business and its employees by ensuring that timesheets are processed quickly and that payment is accurate and on time.
Encourage collaboration across business divisions
Cooperation and collaboration can be complicated when companies are operating in silos. This is due to the narrow view of the operation that each employee is afforded. Even business divisions that should work together, such as site supervisors and payroll employees, can spend months without any significant interaction. Integrated project management software bridges this gap by democratizing information access across divisions and providing employees an avenue to share suggestions and communicate with members of different teams.
As other industries have discovered, digitalization has the potential to transform operational efficiency, reduce human error, and generate financial value through reduced costs and conserved resources. Integrated project management software like Fieldwire has unlocked an unprecedented level of operational cohesiveness for construction businesses — and every stakeholder can benefit from it.