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How to cut project costs: Business Intelligence VS cost overruns in construction
Cost overruns have always been one of the major issues for the construction industry. The main reasons are weak management, inaccurate estimates, design flaws, and changing orders. Ignoring these problems is definitely a dead end while addressing them is your chance to take the lead in a highly competitive market.
Plainly put, going over budget is a direct cause of ineffective processes. Less reworking means savings, more productivity means savings, truly efficient decision making means… guess what? Right. Savings as well. Technological advancements make it possible to have real-time data that accelerate the decision-making pace, lowers the likelihood of redoing a design, and boost the productivity of a team.
So, if the first thing that crosses your mind when you think about your project budget is an “OMG” abbreviation, it’s time to use another one – BI. Business Intelligence is changing the construction industry helping companies to effectively handle managing equipment and manpower, which are pivotal for profit margins increase.
Let’s take a closer look at how it works.
Predictability becomes a critical notion when it comes to construction. It’s far easier for the team and less painful for the budget to deal with the changes at the pre-construction phase. BI dashboards provide users with the capacity to quickly evaluate the metrics of design development. If you can better track the design progress, then there will be little-to-no surprises in design deliverables.
The pre-construction teams can leverage real-time design data, tracking design progression in real-time. It empowers all parties to have the most current design information, allowing everyone to do their best work.
Moreover, with dashboard data readily available, the pre-construction team can suggest alternative solutions reducing material costs during the construction phase.
Besides, complete and detailed designs will also prevent you from major change orders, which entail substantial spendings as well.
Keeping an eye on KPIs
Key performance indicators (KPIs) help to measure the current state of the project and what your team needs to meet the goals. Does your project run on time? What’s your actual project cost to date? Are you keeping to your budget? What’s your current reworking cost? Are your labor costs steady? You can find answers to these and many other questions on BI dashboards. They are proved to be indispensable to control completion time, costs, and support executives in their decisions.
Automation of some aspects of the job and interconnection of the office, trailer, and the field
BI software can reduce time spent on the most tedious tasks, like daily reporting, unleashing human resources for actual work. Moreover, when all your data is in a single place and is available for all your team members – no matter where they are, it becomes easier to keep up with the immediate changes and turn lagging indicators into leading ones. As a result, teams will complete projects faster – reducing your labor costs not to mention the need for rework.
Relying on manual monitoring methods of the machines increases the probability of downtime occurring. As a consequence, your project activities cease owing to the backlog in tasks that can’t be executed until the machines are back in working order. Meanwhile, monitoring heavy-duty construction equipment digitally prepares you to schedule repair in real-time. Besides, detecting faults in the line, BI tools can predict and diagnose issues early on and optimize the performance of equipment.
Although the connection between site safety and BI might seem less than obvious, it still exists. Real-time updates on the state of the equipment can prevent your project from damage and, more importantly, protect your staff from injures. Needless to say, timely security measures will keep your project assets where they belong.
Failing to have proper insight and control on how you’re using materials could create a huge waste of resources. Up-to-date technologies help to track, manage, and control your inventories in real-time, keeping material waste to a minimum and reducing costs.
Retaining a risk management strategy through all construction project phases is crucial if you want to avoid serious cost overruns and stay ahead of potential problems and change orders. Having the data at hand, you can manage risk effectively and experience financial savings from all the improved productivity and enhanced decision making.
To be continued… by you
Although there are plenty of ideas for cost-cutting in construction, that’s not all. Having deep insight into your data, you’ll definitely come up with so many more. Also, historical data from other projects will help you identify and gain efficiencies in current work and displace over-the-top spendings by increased productivity step-by-step, project-by-project.