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By Duane Craig
March 29, 2017
Construction software and data analytics can provide you with detailed insights that will help you catch problems before they happen. But, that’s just the beginning. You will also find new ways to innovate and increase efficiency. In short, data collection and analysis is set to revolutionize your construction business.
Here are five areas where data analytics is going to be a game changer.
The biggest problem for most construction company estimates is inaccuracy. Estimates that don't take all costs into account often happen simply because costs are overlooked. And it's not uncommon for the same costs to get overlooked from one project estimate to the next. There are many sources for these estimating errors, but the ones that are the easiest to fix are those related to contractual terms.
Many construction firms work on projects that have the same delivery method. That's because once they are established, construction companies tend to work for the same clients, or work on the same types of projects. Similarly, once clients get comfortable with a particular delivery method, they are very likely to stick with it. And, certain types of projects often have well-established delivery methods.
It's very likely you work predominantly with one or two types of delivery methods. Each delivery method uses a particular type of contract that has its own unique terms and conditions. Within those terms and conditions are the variables that you must consider when preparing the estimate. For example, under the General Conditions section of a design bid build contract is the contractor’s general responsibilities and duties. Those outline specific duties and responsibilities for each phase of the project. These responsibilities and duties will be different for different types of delivery methods, but will be quite similar from one design/bid/build project to the next.
So when you work mainly with one or two types of contracts, you can analyze project performance across contracts to find areas where estimating always comes up short. One place to start is with your general responsibilities and duties. You can then extend your analysis to other often-overlooked items not directly related to construction. For example, the contract terms under General Conditions often include costs you will incur that support construction activities. These are often overlooked during estimating, or they are not estimated at a deep enough level. Once you know where your estimates consistently come up short, you can put checks in place that will prevent the errors.
It's very rare that a construction schedule does undergo changes based on change orders and the like. There are just too many variables and projects rely on too many players to make the initial schedule set in stone. Of all the processes used to deliver a construction project, the scheduling process is where you have the greatest opportunity to catch problems before they happen. But, to get the crystal ball working well with your schedules, you must harvest all the data you can about those schedules. Once you have collected it, you then have information you can analyze that will provide insights.
Suppose you analyze just the changes made to schedules on three different projects. Gathering that data is something you can do in real time as each project unfolds. When you analyze that data you might see there are activities within all three project schedules that required changes at twice the frequency of other activities. Just knowing that information is very powerful because it clearly shows an area where you have the opportunity to make improvements. Then, when you expand your analyses, you have the potential to find other opportunities for improvements to other activities and even overall project functions.
For most small to medium-size contracting businesses there is a huge opportunity for reducing the cost of project inputs while still maintaining high quality standards. One place where that is increasingly evident is in the management of materials. Even companies working on very small projects at the local level are going through a global supply chain. That material supply chain introduces a huge number of variables to material quality, as well as to availability, and timeliness of delivery. Harnessing insights from data about materials orders, deliveries, and use rates can show you ways to manage materials more effectively.
When you do this regularly throughout a project, you will see trends in the ways your materials supply chain affects activities, right down to the task level. With this new found knowledge, you can make sure potential materials problems get addressed before they affect the schedule or the budget.
Your quality efforts meet their ultimate test when held up to the quality requirements of the contract. Some of the quality requirements are very quantifiable and in the form of calibration, tests, or inspections. Other quality requirements are sometimes more obscure. They could come down to quality as in the “eye of the beholder.” That's why doing a thorough job of collecting and analyzing data related to quality has a very good chance of reducing rework, reducing punch list items, speeding up project closeout, and improving customer satisfaction.
A very basic way to start doing this is to begin collecting data about the frequency that certain items end up on punch lists. At a very minimum you will discover areas where people need more training. Insights you get from collecting and analyzing data on quality will also help you make decisions about items you include in estimates, and changes to contract documents that would be good to pursue. You will probably also discover new insights on which subcontractors and third party verification consultants are more beneficial for you to work with.
Since labor is usually the second biggest input on most construction projects, it stands to reason that you would want to try to identify and fix potential problems related to it. These issues include availability and the skill levels of the people who are doing the building. Analyzing labor data that you collect from projects will tell you a lot more than just how much various activities cost.
When you collect and analyze data about how long people spend doing particular activities, you will have more accurate data to use in your estimating. You will also gain insights into the most effective mix of skills to include on crews, and you will see trends in productivity related to time spent working on tasks, management experience, and the effects of variables like weather.
The construction industry is undergoing the most disruption
it has ever experienced in its history. That's because new technology is offering new ways of imagining and managing construction projects. A big part of that new technology is the availability of data that's never before been easy to capture and analyze. Today's construction revolution is driven more by data than anything else, and those companies that capture and analyze data the best are going to become the construction leaders of tomorrow.
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