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Examining tech's role in project changes & risk management on a construction site

From the beginning of a job, project managers can always count on continuous change and the risk associated with it. Mainly driven by owners, architects and trade coordination, delays associated with change can affect a contractor’s ability to profitably deliver superior project outcomes.

Although mother nature and other unexpected events can spur change, several market trends within the industry are creating additional pressures for stakeholders to manage change and risk effectively.

This includes the continuing labor shortage of highly skilled construction workers and the coronavirus pandemic. COVID-19 has presented additional challenges for the construction managers still having difficulty filling the 600,000 construction jobs left vacant due to the Great Recession.

 

 

Before new work regulations were put in place to limit the spread of the virus, 29% of firms were already putting longer completion times into their bids due to the lack of workers. The shortage of skilled workers and the reduction of personnel allowed on-site has put future commercial and capital infrastructure projects at risk. Additionally, the ecosystem of shareholders faces the following challenges: 

  • The vital need for construction companies to have better cost controls in place due to the combination of understaffing and the lack of experienced workers
  • Increased complexity, competition and higher expectations from owners causing additional margin pressures on already low-margin businesses
  • The need to properly address the increase of documentation and auditing requirements
  • The use of new technologies deployed by subcontractors to safeguard their own interests

For contractors to efficiently address these challenges, technology needs to play a major role. Many contractors today rely on traditional software-as-a-service (SaaS) point solutions, which assist with common project tasks, including requests for proposal and requests for information.

Still, the software remains disconnected from the change management process. As a result, contractors lack the visibility, flexibility and efficiency needed to effectively mitigate project risks.

By utilizing an integrated, collaborative approach to construction project management technology, construction business owners and their project managers can drastically reshape the way the construction industry approaches and manages change. The following are three comprehensive concepts of collaborative change management.

1. Document Management Integration

Throughout the construction process, project managers need real-time visibility to the potential impact of change. The earlier they understand the impact of a potential change, the more options they have to mitigate the risk.

 

When a construction document gets created or modified, project managers need the ability to immediately understand what risks it presents to scheduling and the budget. Additionally, on the back end of the change management process, documentation and audit trails can justify why a change occurred and can assist with being paid on time.

2. Change Management Workflow Flexibility

The processes and workflows that have been developed to manage change are an essential competitive advantage for companies. For example, how organizations manage the transition from a document to a potential issue through the request-for-quote process, to a change request, and finally to a change order, can have an enormous impact on margin.

Traditional technologies force companies to conform processes to that which is defined in the software. To truly be agile in today’s environment, companies need the ability for the software to conform to its current best practices and have the flexibility to continuously evolve in response to customer demand and changing market conditions.

Change management is also an inherently collaborative process. A company’s technology should give it the ability to effectively and efficiently manage down to its subcontractors, and up to the owner, sharing data where appropriate and eliminating the inefficiency of any duplicate data entry.

3. Integration with Cost Management

The final core concept of collaborative change management is the need for integration—of change management to cost management and company financials. The difference between efficient and poor change management can be the difference between being in business or not.

 

As changes are identified and resolved, organizations must provide a complete view of their project finances to those within the organization. A project team can benefit from financial data in change management. In contrast, the finance team needs real-time visibility into the economic impact of project activity to effectively and profitably run the business. It is well understood how critical effective change management is in the industry, and market trends are creating even more challenges for construction project managers.

As recent events have proven, it is a given assumption that the pace of change will only continue to accelerate, which is why it is so vital for contractors to effectively leverage technology to help manage the complexity of change.

 

Emerging technologies designed to provide integrated, collaborative change management offer the opportunity for contractors to greatly enhance their competitive advantage through more effective change management.

By integrating change management with both document and cost management, and enabling flexible, collaborative workflows in the change management process, these technologies enable contractors to deliver superior project outcomes while improving their profit margins.