Five Solutions to Common Project Cost Management Challenges

Transcription

1 Five Solutions to Common Project Cost Management Challenges

2 Construction projects that come in under budget are the exception, not the rule. In fact, many projects, particularly in infrastructure, have cost overruns. Wouldn t it be nice to eliminate project surprises and instead have project confidence? Built on a history of construction and engineering excellence, InEight solutions help you stop the surprises. They are customizable, integrated and field-tested, and they help you visualize, estimate, manage, control and connect all aspects of your capital and maintenance projects. During everyday conversations, with construction experts just like you, we ve identified five common project cost management challenges that can lead to project delays, cost overruns and overall inefficiencies. And we have the tools you need to overcome these challenges. InEight Simple Bundle empowers, providing you with the confidence needed to address your challenges. With estimating and project management at its core, InEight Simple Bundle s integration and simplified, yet accurate, estimating helps you win bids at the right price. And performance and project management tools help you build at the lowest cost and highest quality. Available bundles include the InEight Estimate Bundle, with its powerful cost estimation platform and the InEight Estimate and Control Bundle, which adds the ability to control and forecast costs, revenues, man-hours and productivity, ensuring successful project completion. Learn what can cause these construction challenges and how our InEight bundles proactively solve these problems.

3 Challenge #1: Slow Estimating When we talk with people in the construction industry, we hear a common refrain: Estimating a project is a time-consuming process. It hurts our ability to cost-effectively bid on more work. These days, an app seems to exist for even the most mundane of tasks. So not having an integrated estimating tool may come as a surprise to many. And, while some companies do track metrics around the bid value per man-hour, that number is generally not where it needs to be in order to maximize profits. The only way for you to really keep up is to bid on more jobs. But most estimating teams are already putting in overtime to keep things going as is; the thought of bidding on more jobs is overwhelming. In the end, overstressed estimators may inadvertently win the wrong bid, only increasing the pressure. 3

4 Solution #1: Leverage Technology and Integrations Make it easier to reproduce data: Use systems that make it easy to copy, multiply and split data elements (e.g., equipment, manpower, hours, production, materials) to reduce efforts and streamline tasks. Eliminate manual entry and re-entry. Ensure changes automatically flow through documents. This enables estimators to structure bids in a way that makes logical sense. Build estimates based on standard cost libraries: Industry cost libraries that contain details about productivity rates are readily available. Make use of them, or your company s own norms data, to quickly generate estimates. Top estimating solutions should embed cost libraries so that key elements are generated with the touch of a button. By eliminating guesswork and instead relying on standard libraries, you can create estimates much more quickly. Use design models to quickly build more accurate estimates: There s no sense in unnecessarily duplicating work. lnstead, integrate with systems that include electronic takeoff, to easily bring assemblies, quantities and components directly into new estimates. This also allows a project to quickly transition from design to estimation. Integrate estimating and scheduling: Make time-phased costing a part of your bidding process. The ability to flow data between an estimate and schedule, from bidding through project execution, minimizes manual tasks that typically slow down an estimating team. What slows estimating? Generally, it s process problems, such as: Outdated or manual systems Too much reliance on manual effort Duplicated effort for new bids Slow estimating can result in bidding fewer jobs, winning significantly less work and, ultimately, lowering overall profits. The Aiken team has tripled the amount of work it can bid. Aiken Group Limited The InEight Estimate Bundle provides a quick and easy way to create more accurate estimates, as well as benchmark them through an integrated cost estimation platform, giving you the ability to bid on more jobs, obtain more work and realize higher profits. 4

5 Challenge #2: Disorganized Bidding Process Another common refrain heard when talking with industry professionals is: We need to standardize our bidding process and stop missing things, but we don t know how. Many companies lack any sort of structure in their estimating and bidding processes. Structure ensures consistency and minimizes the chance of missed deadlines. If your team struggles with these elements, you likely also lack visibility into best practices and miss an opportunity to implement lessons learned. Generally, it can be: Disconnected systems Not using templates or consistent coding Lack of structure Point solutions 5

6 Solution #2: Unify and Streamline Here s how winning construction companies solve this challenge: Unify your estimating platform: A single solution allows your company to fully leverage best practices and improve visibility across the project portfolio. Standardize coding structures: Standardization simplifies data flow between systems and provides common codes for consistency in reports and operations. Embrace benchmarking: Being able to compare previous estimates and as-built actuals from similar jobs improves, simplifies and speeds up the bidding process while increasing accuracy and building confidence. InEight bundles provide you with project confidence, so you know what to expect and can avoid project surprises. The precision we get provides the confidence we need. In today s competitive market, there s no room for errors in our estimates. Hunter Contracting Co. Deploy common reports and management dashboards: Ensure all project stakeholders are leveraging the same accurate, consistent information to make better decisions, faster. Estimating is time- and labor-intensive, but then, you know that. We ve got a simpler way. The InEight Estimate Bundle and the InEight Estimate and Control Bundle let you quickly and accurately provide estimates, and control and forecast costs, revenues, man-hours and productivity to ensure successful project completion, making your job a lot easier. 6

7 Challenge #3: Inability to Benchmark Estimates We hear it all the time: We have no way of knowing if we are even getting OUR best estimate! How do you know if you ve created the best estimate for a job? Your estimating database holds a wealth of information about other similar jobs. If you can t quickly and easily compare historical data, it s difficult to build on successes and correct missteps. Not being able to quickly identify problems and make changes slows business down. Way down. Not to mention working with outdated spreadsheets that don t have the latest job information, and keeping estimating notes with pencil and paper. These don t equal project success. 7

8 Solution #3: Develop a Common Ground for Data Here s how many winning companies are solving this problem: Estimators and managers need performance visibility to more quickly identify problems and make changes that keep the business moving forward. Tracking relative performance from job to job is vital to ensure more predictable project outcomes. Establish quantities as the base unit of measure: When reporting key data, our recommendation is to focus on quantity not cost as the common denominator. When it comes to operational measures, precision counts and quantities are a better denominator. By working with quantities, you can avoid accuracy issues, which commonly occur with historical comparisons, such as regional cost variations, material price fluctuations and inflation over time. [We now have] an enterprise solution platform for all of our American and African business units that standardizes our estimation and controls processes. J.S. Redpath Limited Standardize your coding structure: You can more easily identify and compare productivity rates by standardizing, which helps in establishing the best performance for each given activity. Identification of top productivity rates can feed back as benchmarks into the ongoing use of tools, allowing for quicker and more accurate estimates, greater confidence in estimates and an ability to instill continuous improvement, beating your best performance, on subsequent jobs. Once these best practices are established, estimators can more easily make true apples to apples comparisons across regions and time frames based on previous estimates, as-built actuals and performance. The InEight Estimate and Control Bundle provides four key project controls: budget management, progress measurement, change assessment and forecasting. Now you can accurately measure project developments, effectively track and manage budget and contract changes, and forecast performance and progress. Act. Don t react. It s a proven blueprint for success. 8

9 Challenge #4: Updating Outdated Systems We re sure you ve heard this at least once or twice: We don t really want to change systems because we have our secret sauces in there. We ll lose them. Organizational change can be difficult, especially with all of the deadlines you face. Few estimators and project control specialists want to lose the trusted tools they ve relied upon over the years. Many times, their spreadsheets and other systems contain secret sauces built on the experiences gained executing projects, establishing productivity rates and building custom calculations in the process. Many companies resist adopting more advanced systems, fearing loss of these custom approaches. However, holding on to outdated or inefficient practices creates far greater long-term issues that can lead to slow estimating processes, inconsistencies, poor performance and scalability issues during improved (and difficult) economic times. Fifty-two percent or more of project managers and estimators continue to use pen and paper to conduct estimating, takeoff, bid management and other processes. JB Knowledge, Construction Technology Report 9

10 Solution #4: Ease the Transition to a Modern Project Cost Management Platform Here are key ways to streamline your move: Leverage don t replace spreadsheets: Bidirectional integration with scheduling, takeoff and accounting solutions enables you to keep important institutional knowledge and custom calculations built up over the years. Find systems that seamlessly integrate with your existing accounting, enterprise resource planning (ERP) and scheduling tools. Integration ensures consistency for tracking performance across the project life cycle. You ll be able to enter data once, in one place, to increase productivity and reduce risk. This also increases the confidence of all stakeholders, by being able to provide more accurate project numbers. And finally, you can reduce the number of project surprises with clarity through performance visibility. We identified the link of cost and schedule as the next significant step in achieving stronger project controls. Bradken InEight Simple Bundle seamlessly integrates your existing accounting, ERP and scheduling tools into a precise project cost management platform. It speeds up your estimating processes and performance, eliminates inconsistencies and increases your ability to meet deadlines. All without pen and paper. Of course, to effectively integrate systems, you need some of the elements we ve discussed previously namely, they need to speak the same language via a standardized coding structure. 10

11 Challenge #5: Communication Gaps Between Office and Job Site We ve all heard this one: What are those guys doing all day? Nothing matches the plan. What starts as a clear plan for construction quickly changes once actual work begins in the field. In some cases, crews perform tasks out of order or critical issues arise that aren t communicated to the project managers until long after they occur. $ $ $ $ $ $ $ $ $ $ Miscommunications and limited visibility into field activities typically result from slow and inaccurate paper processes. Combine these with manually prepared, hard-to-read time sheets that lack integration with project control systems, and you have a recipe for communication breakdowns, project delays, cost overruns, inefficiencies and project surprises. The Construction Industry Institute reports that only 30 percent of projects are completed within 10 percent of planned cost and schedule. 11

12 Solution #5: Implement a Unified Cost Management System Extend your cost management system to the job site Deploy a unified platform instead of point solutions: implement digital daily work plans, time sheet reports and quantity claims, and use ruggedized tablets designed for tough job site conditions. A good day at the construction site is a result of up-to-date information shared between the office and job site, with no surprises. InEight Simple Bundle helps to make every day a good construction day. InEight Simple Bundle provides a unified platform that lets you implement digital daily work plans, time sheet reports and quantity claims. You can make better decisions based on current information and without paper. We make better project execution decisions because we re working from the most accurate and up-todate information from the project site. Blois Construction Inc. InEight Simple Bundle s proven cost management eliminates paper processes and allows for greater efficiency and accuracy. You ll better optimize on-site work per your defined project execution plan and save time on time sheets, allowing you to make better decisions based on the most current information. Drive project certainty through best practices In today s challenging environment, project-driven companies must leverage the best tools available to maximize performance. While the industry shows no signs of slowing down, implementing solutions to these five common challenges can enable you to bid more jobs, win the right work and increase overall profits. The InEight bundles will help you win work at the right price. And performance and project management tools will let you build it at the lowest cost and highest quality. InEight lets you work efficiently, accurately and confidently. That s empowerment. 12

13 If you want to maximize performance, you need the best industry products available. InEight Simple Bundle enables you to be more competitive and make your projects more successful from assessment to action. Bids won, work done. A simple way to do it all. InEight Simple Bundle empowers, maximizes and allows you to be more competitive. Time after time. That s success you can build upon. Give us a call Send us an info@ineight.com Visit us today ineight.com 2017 InEight Inc. All rights reserved.