How to eliminate risk by adopting a project management framework

How to eliminate risk by adopting a project management framework

Discover how harnessing technology enables subcontractors to control spend, reduce errors, increase efficiency and deliver profitable growth.

Controlling costs and running projects efficiently, whilst simultaneously ensuring you make a decent profit, is something every specialist subcontractor strives for daily. We all know it’s challenging – tight margins, an ever-changing project scope and pressure to deliver everything yesterday.

Having worked in construction software for two decades, I’ve seen the good, the bad and the ugly in how projects are run, with the majority of subcontractors struggling with a lack of standardised processes, multiple systems that don’t talk to each other, and no reliable data on which to make critical decisions. All these factors combined make it difficult to deliver optimal profitability and de-risk contracts.

More recently I’m seeing a shift, with subcontractors investing in and leveraging technology to give a structured framework to manage projects. Forward-thinking subcontractors are no longer willing to use one software for take-off, another for estimating, a different one for procurement and spreadsheets for the bits in between.

Instead, they’re opting for all-in-one platforms to manage costs. In doing so they’re eliminating over-ordering and over-paying, standardising business-wide processes and reducing the inevitable errors that arise when duplicating data across multiple systems; all of which has led to increased efficiency and reduced risk. Let’s explore why.

Standardise systems & processes

The construction industry is notorious for running highly complex projects using disjointed systems and spreadsheets. As a result, key project data is held in silos, making it difficult for stakeholders to share information in real-time and collaborate effectively.

There’s also plenty of error-prone duplication and rekeying of data, plus a lack of transparency often leads individuals to develop their own uncontrolled documents and processes in Excel. With personalised worksheets it can be difficult to transition staff between projects, as it’s time-consuming to decipher the information and there’s no real-time data help you making informed decisions.

Then let’s throw into the equation the Forbes’ statistic – citing that 88% of spreadsheets contain errors – and it’s abundantly clear that using Excel for project processes and systems can expose a business to risk.

By standardising on a single cloud-based platform for project financials, subcontractors adopt a framework for creating, sharing & managing cost information at every stage of a construction contract, from tender to final account. Everyone works in a consistent way, using the same software, standardised documentation and processes. Handovers from pre-construction to production teams are seamless, with project data being presented in a consistent and familiar way.

And because all the cost information is available in one central, accessible location, the project team can view and edit real-time data regardless of whether they’re onsite or in the office. There’s no waiting to see the status of an order, or for spreadsheets to be updated with site progress; all project information is always up-to-date and available.

Reduce risk

Using a single platform also reduces risk considerably. As an example, one of our client’s core drivers for adopting technology was to eradicate information silos and in doing so, prevent the recurrence of a very costly mistake. A well-meaning employee had returned from furlough and, in good faith, placed an order for a bespoke item. However, because the business used many different systems for purchasing, he was oblivious to the fact it had been already ordered. Without realising, they placed the exact same £60k order again, destroying their profit margin on that contract. Had they been using a single system this mistake would have been avoided as it would have been clear it had been ordered.

“Lack of systems cost a client £60k”

The right time

So, when should you consider adopting a structured project management framework? PWC recommends being proactive rather reactive, regardless of business size. Indicators that it’s the right time include:

  • If your existing methods have failed
  • You recognise you need better processes as you struggle to retain control
  • Increased risk or complexity is emerging e.g. Covid and the associated challenges
  • There are looming internal processes changes within your business
  • You want to scale the business or pursue a new direction

If any of these indicators ring true for your business, act now, as there is a solution. Those subcontractors who use a structured project management framework ultimately run their business with reduced risk and improved productivity, which leads to increased profits and scalability.