Vice President & Chief Information Officer
W.M. Jordan Company
Businesses frequently prefer, and sometimes even require, the ability to finance equipment. However, the process of progressing from application to underwriting to approval to funding is still predominantly manual and requires a lot of time, effort and resources.
Use technology to help manage risk. The objective of any risk management process is to minimize the impact of unplanned events by identifying and addressing them before significant negative consequences occur. And the use of technology to assist with this has exploded in the construction industry.
With tech, you can scrub a specification or set of plans for items that are outside the normal or that may have changed. And you can integrate a model with an estimate to produce more accurate results. With building information modeling (BIM), you can build projects virtually to assist in identifying potential conflicts before you encounter them in the field. You can also build your schedules and manage lean planning efforts.
Tech tools help you document and update progress, as well as identify and share unforeseen conditions you may encounter. And now, you can use artificial intelligence and machine learning to help perform lower-level tasks and analyses, so you can focus on the critical items.
Construction Industry Consultant
Risks are part of every organization and can include contractual, environmental, employee, cyber, safety, auto, property, reputation and many others. They must be mitigated.
Work with an insurance agent or brokerage firm to identify and classify your exposure to certain risks, and make decisions to manage them, such as:
- Avoid—In some cases, avoidance may be the best solution. Don’t engage in the activities that created the risk for the company.
- Transfer/Reduce—Some risk situations are better handled by reducing risk via transferring or assigning some portion of that risk to others.
- Insure—Many risks can be managed by obtaining the correct insurance. The scope of coverage and limits of protection can vary significantly for different exposures.
- Accept—In some cases, coverage may not be available, or the costs of coverage may not be desirable. In those cases, the company is essentially self-insuring and accepting the risk.
Glenn M. Bestebreur
Vice President, Project Development
Bestebreur Bros. Construction Inc.
The last time you can make money on a project is just before you turn in the bid. The pen that writes in the bid numbers is the most valuable piece of equipment you’ll ever own. Use it wisely. Remember that you are ultimately in control of your company’s destination. With that in mind, you can control your risk by choosing your clients and subcontractors for each project wisely.
When was the last time you fired a client? Some of the best jobs are the jobs we never got but let our competitors get instead. When it comes to getting paid as contractors, we need to remember that we are contractors, not banks. The 90-days-same-as-cash philosophy is not acceptable. We need to remember that the quickest way to get out of a hole is to stop digging.
Choosing your team members for a project may affect more than just that project. If they perform well, then you have no worries. If they don’t perform well, not only will it affect that job, it will also cost you more in the long run by taking away supervision and resources from other (profitable) jobs. Choose your team members with their past experience in mind, not just their bid amount, and factor that into your total bid. Don’t forget to pay your subcontractors on time, as they are a major part of your success.