How proper construction project management saves on job costs

The construction industry is notorious for cost and time mismanagement. But efficient construction project management can help.

Time is money, especially in the construction industry.

Two of the biggest challenges facing construction companies are cost and time overruns. Overruns above 100% might seem unthinkable, but one study suggests they’re actually quite common.  Fortunately, such overruns can be avoided, but only through efficient project management that keeps jobs on a tight leash to control related costs.

Three reasons construction project management is especially challenging

Project management in general is never easy, but it proves to be especially challenging in construction for a variety of reasons.

  1. First, the number of stakeholders is much larger than in other industries. Between contractors, subcontractors, designers, architects, mechanical, electrical, and plumbing (MEP) professionals, LEED engineers, regulatory officials, and more, it’s not unheard of to have hundreds of various companies involved in one project.
  2. Each of these stakeholders is typically involved in only part of the project; they’re rarely included in the larger picture. Because of the natural silos this creates, most professionals are lost in the weeds of their individual contributions.
  3. An additional problem is that construction proceeds in a linear fashion: from design to preconstruction, procurement, and construction. Delays in any one stage whiplash on to the next, and from there, problems increase exponentially. Even in the construction process itself, one set of workers might be waiting for electricians to complete a part of the project, who in turn, might be waiting on plumbers. The slightest change in process can lead to ballooning costs and time overruns. Equally problematic, if any team finds errors, then it’s back to the drawing board.

These construction project constraints are especially challenging in the face of cost and time pressures. The industry is always expected to do more with less.

So, what does proper construction project management look like?

An efficient construction project manager resembles a conductor leading a symphony orchestra. This person keeps track of all project details, including cash flow and costs, and constantly moving project components. They keep each stakeholder in the communications loop with the ability to view project progress in real time.

Inaccuracies creep up when managers don’t have the capacity to supervise labor output. This also occurs when there are delays in filing timecard information. This is why efficient labor assignment and correct workflow processes are so imperative in good construction project management. Additionally, precise and proactive tracking of labor hours, including overtime, is vital to the financial success of a project.

Effective communication enables active collaboration and avoids the domino effect of costly mistakes down the line. When everyone is in constant contact, or can at least access the same updated information, they clearly see how the pieces fit together. This avoids changes in one design aspect that can complicate the approvals process down the line.

Good construction project management saves money

Efficient construction project management saves money. Here’s how:

  1. It facilitates efficient collaboration. Everyone on the team, accountants, field representatives, designers, architects, and city planners, access the same data, so there’s no room for miscommunication. This saves time and money.
  2. It provides real-time project updates. Efficient construction project management closely monitors all aspects of accounting, including job costing and committed costs. Checking carefully against assigned budgets helps keep projects on track without wasting money and prevents unanticipated expenses.
  3. It spots potential problems early on. Since good project management requires visibility into processes throughout all stages of construction, stakeholders can nip problems such as uneven cash flow, in the bud before they blossom into full-blown catastrophes.

In summation, efficient project management drives effective communication, collaboration, and proactivity, all of which translate to savings in both time and money.

Processes and tools for construction project managers

Construction management software, designed to meet the unique needs of the industry, helps all the various teams work together efficiently. Equally important is the use cloud technology, which enables remote collaboration, granting access to team members regardless of whether they work in the field or the back office.

Software designed specifically for construction can track contracts, cash flow, and labor hours, allow for more accurate estimating, and help manage change orders. Builders shouldn’t have to rely on a piecemeal approach to the problem. Workers on the job site can synchronize work orders and administrative work through mobile apps, improving productivity.

Construction projects can’t afford to let spiraling costs and time overruns get out of hand. Using the right technology, efficient construction project management can save construction companies time and money every step of the way.