by Jim Flynn
March 26, 2012

How to achieve operational efficiencies and cost reductions with an all-in-one soution that takes a construction project from take-off and estimating through job costing and project management.

Operating a construction business can be extremely complex since each project has so many moving parts. The obvious challenges include weather, site conditions, material specification changes, owner preferences and coordination between other on-site contractors. The complexities increase dramatically once you consider other risk and accountability factors.

To be successful, contractors must mitigate construction risks and ensure accountability. By reducing risks (such as missed deadlines, lack of profit, safety and environmental violations and damaged reputations), more time can be spent accomplishing strategic initiatives instead of putting out fires. 

Complete construction business management software solutions provide one way to handle the complexities of the entire project lifecycle. This software can help contractors minimize risks and hold all appropriate parties accountable. With more end-to-end control and seamless workflows, contractors can achieve operational efficiencies and cost reductions to guarantee profitability.

Ensure Accurate Estimates

Construction projects begin with the takeoff and estimate. The more accurate the estimate, the greater potential for profit. Project managers will be held accountable for errors and over-budget projects, which make it essential to begin each job with an accurate estimate. 

A construction software solution offers features to perform fast, accurate takeoffs and then automatically pull the data into the project management and accounting processes to prevent errors and eliminate the need for duplicate data entry or recalculations. 

Better estimates also result in better negotiating power with subcontractors. General contractors who have confidence in their numbers can challenge subcontractor and vendor quantities on high bids and confirm low-bid quantities—this reduces risks associated with bidding too high or low.  

Estimators can also use assemblies available in software solutions to easily swap materials for revised estimates or value-engineer a project. With these capabilities, estimators not only save time but can use the same assemblies repeatedly to prevent future errors and develop tighter bids. 

The efficiency of a complete solution makes it easier to accumulate bid details and produce proposals quickly. Sending out more proposals can result in winning more work. And with more accurate proposals, the probability of winning more jobs and the profit potential on each project increases.   

Schedule Labor and Equipment with Ease

Accurate estimates also play a critical role when scheduling labor, materials and equipment for a job. For example, accurately estimating materials will result in less waste and reduced over-orders, under-orders and re-supply delays. With a complete solution, the project manager can automatically create job budget and billing schedules and automate purchasing processes off of the estimate details already in the system. This electronic “job folder” that has all project-related data in one location eliminates the risk of data not being passed from the estimator to the project manager.

A more accurate estimate also provides better site management. Project managers will have the necessary labor, materials and equipment at the site, and material deliveries will be more timely leading to less site storage and handling. 

More materials and equipment at the jobsite usually results in an increase in damaged and stolen goods. But this risk (often extremely costly to a construction company) can be mitigated with the ability to schedule just-in-time deliveries.

Simplify Document Management

With an all-in-one solution that takes a project from takeoff and estimating through job costing and project management, contractors can also better manage project documents, RFIs, transmittals, submittals, submittal packages, daily field reports, checklists and project plans. 

With an online paper trail, contractors can have all documents and related email messages in one place, set alerts to meet deadlines, have an audit trail to hold individuals accountable and have the documentation on hand if they face litigation down the road.

A software solution’s construction document management capabilities can help with managing hazardous jobsite materials as well. These materials must be tracked, tested and appropriately moved to handling sites. Between government agencies and overzealous building inspectors or even disgruntled neighbors, you must ensure proper procedures have been followed and that you have complete, accurate documentation available to prevent a lawsuit. 

End-to-end software solutions also provide safety benefits. OSHA continues to become more stringent about their requirements and pursues litigious actions against companies that do not conform. Completing required jobsite training and maintaining jobsite safety conditions can easily be overlooked. But if something goes wrong or OSHA performs an inspection, noncompliance can become extremely costly. 

With workflow and audit trail capabilities in a complete solution, contractors can create assignable action item lists with due dates that backtrack to their critical path schedule. The system then sends reminders throughout the process allowing contractors to stay ahead, prevent delays and avoid potentially devastating situations.

Reduce the Complexity of HR Issues

Human resources also poses a huge risk to contractors. And certified payroll and prevailing wage projects require significant coordination. If you work on a publicly-funded project and do not properly complete the required forms, payment requisitions can be rejected. 

If public funds are withheld, owners can lose money and withhold retainage to the general contractor, who will then withhold retainage from the subcontractors. This creates cash flow issues for all involved. Noncompliance with various regulations and late and inaccurate reporting can result in fines, withheld payments and project delays. If you knowingly report fraudulent information, this could result in legal action. 

A construction management solution can help contractors efficiently manage workforce reporting and construction payroll, including government, state, Davis-Bacon certified payroll reporting, union, workers’ compensation and benefit tracking for merit shop contractors. With automated functionalities to meet the ever-changing government and construction regulations, construction business owners can reduce risks to their business. 

Increase Profit with Less Risk

A construction management software solution can help every aspect of a construction business. By reducing the amount of paperwork and streamlining processes, contractors have more time to fix or prevent problems in the field. Instead of spending an extra hour each day putting out fires, a complete solution will enable contractors to spend that time preventing problems and finding ways to increase operational efficiency and profitability.