Are you doing your part to increase productivity in the construction industry by avoiding these 7 deadly project control sins?
According to McKinsey, “A 1% reduction in costs would save the construction industry approximately $100 USD billion annually.” In an industry where margins are typically as low as 3%, and there are few avenues available to reduce the cost of delivery, leaders are turning toward upgrading their project controls to address the one percent opportunity.
These are some of the ‘sins’ of project management that I see most often, and that contribute to some of that $100 USD billion being left on the table.
1. Multiple versions of the truth
Companies tend to accumulate multiple tools over the years but seldom evaluate their effectiveness overall. Projects start quickly and go with whatever solutions are available because there is no time to try something new. But when it is time to report out – to find information to support a dispute or to make a decision – reality sets in; there is no single place to search and the true cost of disparate systems becomes clear.
It is at that time when the benefits of a single, flexible project controls system (that also supports collaboration of an entire project team) become evident.
2. Disconnected schedule and cost
When schedule and cost are isolated to their own silos, visibility of the true effect of change is impossible. It makes for incomplete processes, exposing the possibility of errors due to reliance on manual links between departments, groups, and teams. The handoff between departments – even in a single company – typically consists of email, report, or paper. Aside from the pure inefficiency, teams frequently do not receive all the information needed, leading to more back and forth communication. For example, to evaluate the potential impact a change order might have on the overall project schedule, the scheduler often needs additional context and related documents.
Capturing the entire lifecycle of a process and eliminating manual exchanges reduces the risk of error and increases efficiency.
3. Inconsistent standards
Individualism is a terrific quality but not in managing projects. Doing your own thing on a project-by-project basis makes the impact on a project ecosystem difficult to see and reduces the ability to make course corrections early. Working with non-standard data makes it impossible to discover patterns – things that need to be changed or things that should be incorporated into the best practices that make your project run efficiently.
Data is the new currency and leveraging your information to drive performance requires standard, agreed data formats and processes.
4. Inflexible & rigid systems
When discussing standards and best practices it is not uncommon to hear “that’s not our process, we do it this way because the software doesn’t support how we should be doing it”. Simple, “out-of-the-box” tools are good for a quick start, but they will not support your business as you grow. For example, training wheels serve the same purpose when it comes to helping you learn how to ride a bike, but they will not be beneficial when you are ready to compete in a race. The same goes for project controls. You cannot scale and grow your operation without flexible, easily configurable systems. Leaders are always on the lookout for ways to improve, to incorporate lessons learned into future projects, to pursue new types of work, and they rely on mission critical systems like project controls to have the flexibility to move with them.
There is no one size fits all option for project controls – there are too many unique variables that require flexibility.
5. Uninformed decision making
How can you make the best decision when you don’t have all the facts? A project has thousands of decision points along the way that combine to make it either a success or a failure. The same goes for a company. Everyone agrees that it is best to have the most accurate and complete data to make good decisions. But getting that data is often a complex and time-consuming process. Business does not stop to allow information to be gathered and compiled. True efficiency lies in instant, real time reporting from a single source of truth.
6. Lack of collaboration
It is no secret that engineering and construction projects rely on a vast team – internal and external – for delivery. But for an industry that relies on effective collaboration to reduce risk, methods are often lacking communication. Too many firms spend valuable resource time distributing documents, ensuring the correct versions are used, and simply communicating information. It may seem inevitable that key information slips through the cracks, but in fact that does not have to be the case.
Systems that support efficient collaboration have higher adoption rates and ensure the right information is delivered to the right person at the right time.
7. Ineffective change management
The best run projects plan for change – from the initiation to resolution – and good documentation is critical to avoid disputes. Effective change management requires integration of cost, schedule, and processes, as changes affect the entire project and not just one area. Change does not occur in a vacuum; tracking its origin is just as important as managing its impact on cost and schedule. A single change can involve a trail of drawings, meetings, RFIs, submittals, quotes, and negotiations along with other correspondence. ERP systems are not effective tools when it comes to managing change – they record the impact but not the process that led up to the change.
Successful projects depend on a standard approach to change management, supported by a system that is robust, yet flexible enough to support multiple project types and scenarios.
To learn more about how leading construction companies are upgrading their project controls and avoiding the 7 sins, register for our upcoming webinar.
Latest posts by Krista Lambert (see all)
- How E&C is leveraging the power of project controls to tackle giga projects - January 18, 2018
- 7 Deadly Project Control Sins - April 26, 2017