If you’re like many construction contractors who use multiple systems and spreadsheets to manage all the financial aspects of their projects, you’ll understand that managing huge volumes of business-critical data efficiently can be a burden.
With inadequate cost and project management systems being cited in the top 5 contributing reasons as to why contractors fail, we examine how traditional systems and processes for managing vital cost data can leave a business and project open to risk, inefficiency and unnecessary cost. And more importantly, we explore the solution.
“Multiple, unconnected systems are the norm”
The 2016 Construction Technology Report states that 76.8% of the construction industry uses 2 or more systems and 58% use 4 or more. Not only is there a cost associated with maintaining several systems, it means that business-critical cost information is held in isolation within different systems and spreadsheets. And with 41% of companies surveyed stating that critical company data is trapped in legacy systems that cannot be accessed or linked to the cloud, it’s fair to say the construction industry suffers from multiple information silos that hinder the efficient sharing of real-time data.
So how does this impact on your projects?
Unnecessary & costly administration overhead
Information silos mean that data is fragmented and difficult to share. If the project team cannot access the information they require when needed, the administration bill goes up. A lack of data leads to many necessary but timing-consuming fact-finding conversations reconciling orders and invoices, lots of reworking of estimates and pricing iterations, and time spent cross-referencing project information such as rates, measures and progress.
According to the High Cost of Disconnected Data Report, the average business user spends 34 minutes each day moving data to other systems. Not only does this represent a huge waste of time, there is considerable risk associated with duplicating and rekeying information, from accidental data entry errors though to concerns over version control and what information in which system is the latest or most accurate. Also, when data is fragmented, it’s often the more expensive staff who spend time manually recreating and collating information for reporting purposes.
“The average business user spends 34 minutes each day moving data to other systems”
High Cost of Disconnected Data Report
Spreadsheets at risk of errors & corruption
Spreadsheets are often the default tool for managing construction projects, from estimating through to managing variations onsite and project reporting. However, according to Forbes spreadsheets carry great risk, as 88% of spreadsheets contain ‘significant’ errors and there are mistakes in over 1% of all formula cells.
Often the way in which the spreadsheet is set up is known only to the author, making it hard for others to understand, especially when transferring information cross-team from the tender stage to the live project. And because spreadsheets are typically not connected to each other, the sharing of information can be compromised.
There also is a major risk that spreadsheets containing financially sensitive information are vulnerable to costly data errors, file corruption, and data security breaches.
“88% of all spreadsheets have ‘significant’ errors in them.”
Inability to make informed decisions using real-time data
Tracking project performance accurately and in real-time can be extremely difficult if information is held within silos and by multiple owners. Given how many systems are typically used in the construction industry, it’s not surprising that 36% of the survey respondents in the 2016 Construction Technology Report end up tracking performance using manual methods, and that 31% rely on spreadsheets for the same purpose. This means a whopping 67% of the industry is tracking performance manually and/or using multiple systems, which is both error-prone and an administrative burden.
Combine this with the constant and inevitable project changes, across multiple projects running simultaneously, and establishing the performance of any project, let alone the entire business, in real-time is problematic. There is a serious risk that key business decisions will be made based on out-of-date and inaccurate information.
“67% of the industry is tracking performance manually and/or using multiple systems.”
2016 Construction Technology Report
Introducing the integrated solution
Developed specifically for contractors, Chalkstring offers a single platform through which the whole project team can manage the entire project from tender enquiry through to final account. It streamlines activities that have typically been spreadsheet based, like estimating, supplier management, value engineering and variation orders, and it automates manual processes, such as procurement, progress and valuations, applications for payment and subcontract labour payments.
Chalkstring’s integrated approach eliminates the need for multiple systems and complex spreadsheets, with all project data available from within a single cloud-based system. This unique approach has been proven to increase margins, reduce waste and improve visibility of project performance. Integrated software provides the project team with everything they need to run the project efficiently, and management with the real-time insight into key financial metrics, at any stage of construction.