Back to the Basics: Where to Focus for Success in Construction

If you ask leaders in the construction industry what areas to focus on to be successful, you could get an array of different answers depending on who you ask. If you ask a general contractor, he will give you a different answer than the head architect, and she will give you a different answer than a construction software provider.

On the cutting edge of construction technology, we see automation, efficiency, and data management becoming essential to all projects. These advances mean fewer mistakes, fewer safety issues, and fewer unforeseen budgeting snags.

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But really, that boils down to three basic necessities.

Successful, profitable construction projects all have three things in common, we have come to realize.

Successful, profitable projects are on time. Delays can be unavoidable due to weather, unforeseen breakdowns, or the like. However, these events must be proactively planned for. Some easy areas to focus on are project management and data management.

Project management should build in time for weather delays. No project is unaffected by weather delays. Unforeseen breakdowns can be managed through collecting data on all machinery to anticipate maintenance work.

Successful, profitable projects are under budget. Keeping to your budget is a huge influencer of success. Projects that go over budget can have significant consequences. Project budget can be influenced by every operating aspect of the company. To avoid later hiccups, it is important to ensure your review and approval process is clearly defined and easily followed. Change orders and RFIs should pass across the right desk to keep rework at a minimum.

Several tools exist to keep track of budgeting and help a project stay on track from that standpoint. Integrating software applications is one way to make sure all of the information is shared a visible to keep the budget on track.

Successful, profitable projects are safe. Safety is absolutely key in the construction industry. Incredible strides have been made over the last century to ensure that all employees stay safe on the job. Your job safety can also contribute to the labor morale and retention. Your labor force should be skilled and educated on safety precautions. This will help to boost your reputation and efficiency.

Read more about how technology has played a role in creating safer worksites.

Way before we were integrating software or even using walkie talkies on the jobsite, keeping construction projects on time, under budget, and safe have always been three keep attributes of a successful project. Technology has raised the bar and aided in making these very basic goals more achievable.

Job Costing Best Practices

Job costing is a pretty basic requirement for all construction projects. You have to track and account for all costs associated with a project. To take it a step further, you should also categorize these costs based on their relationship to the project. Common examples of these include labor, materials, equipment, subcontract charges, and burden.

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The best way to track these costs is by categorizing them based on the phase or task within the project because this will give you a more granular understanding of your costs. This alone will give you deeper insights and help you to modify your process to better account for costs related to a job in the future.

Modification in labor and schedule are benefits that can be directly driven from a more granular look at costing. Over time, collecting this data will help create more efficiency for your firm. In the future, you will be able to better plan for what it will take to successfully budget for labor from a financial standpoint and a time standpoint as well.

Understanding of profitability is another important part of job costing. Knowing if you have been profitable on a particular job is vital to a firm’s longevity. Proper job costing gives you that. You can also fine-tune individual phases and tasks based on your findings. Data will be available on your profitability, because of proper costing efforts, to aid you in making these decisions. Future projects of a similar nature will be directly impacted because of your ability to tweak your approach.

True job costing should not leave out what is usually chalked up as “overheard,” however. Keeping your numbers competitive is important, and that is why items like office supplies and expenses are often left out of job costing. To give your firm a real handle on estimates for the future, however, adding some of these costs, such as printing costs which can be quite large, makes sense. Printing costs include the plans, subcontracts, owner agreements, and schedules. The total for this can come in at the thousands. Categorizing this as part of your job costing helps you plan for the future, offset some overhead costs, and even generate income for the project.

Last but not least, technology is not always accounted for in job costing. Having up-to-date technology gives you a huge advantage, but the cost is not always cheap. Although many see technology as a black-hole, it should not be considered overhead. The technology used includes the iPad used by the superintendent, a laptop used on the job, project management software, accounting software, and the like. A firm should account for the work done in the background. Reporting on it is a great way to start, but taking it into your job costing will

As projects and technology both continue to evolve, it is important to evolve your processes as well. Reevaluating areas of your business, like job costing, with a fresh perspective, could help you streamline your approach and achieve greater efficiency.