According to KPMG’s 2021 Global Construction Survey, almost 40% of construction firms say that COVID-19 caused their companies to miss budget and/or scheduled performance targets. And even though the pandemic has receded, it has left significant economic wreckage in its wake: soaring inflation, continued supply chain disruptions, and ongoing labor shortages, especially for skilled workers. For construction project owners determined to make up ground after 2 years of COVID-enforced slowdowns, the reality is that the sailing may be far from smooth for the foreseeable future.
Here are just a few statistics to reckon with:
- 72% of construction firms say projects are taking longer than anticipated.
- 84% report that construction costs have been higher than anticipated.
- 78% of engineering and construction companies believe that project risks are increasing.
- 62% of contractors report high levels of difficulty finding skilled workers.
- 44% of construction firms indicated that labor shortages caused them to lengthen completion time for projects already underway.
- 92% of contractors report being concerned about their workers having sufficient skill to actually do the job.
If you just scanned past those numbers, go back and read them again. Carefully. And then take a beat to consider what they might mean for your construction project.
The reality is that, even in normal circumstances, construction is filled with risk. Right now, that risk is even larger. Relying solely on your AEC stakeholders to protect your interests means you might be in for a nasty surprise at some point during the project when unexpected costs or schedule delays throw off your closeout date.
So as a construction project owner, what can you do to mitigate that risk?
Not knowing is asking for trouble. You need to be able to see project progress for yourself, not just rely on third-party updates. The right construction management software should give you insight into all stakeholder actions, from communication to daily job site activity. You should be able to track real-time balance to finish to see if your budget is being spent as anticipated; if your project timeline calls for you to have spent 40% of your construction budget by a certain milestone date and you’ve only spent 20%, it’s time to ask some hard questions about what’s really going on.
All of that information also needs to be stored, organized, and easily accessible. Changes to any project are inevitable, and a clear approvals process for ASIs, RFIs/RFCs, and Submittals is important. Being able to retroactively track those changes is even more important, especially if fingers start being pointed about who’s to blame for delays or overages. Documentation equals accountability, and accountability is key for getting an honest assessment of your project’s true status from your stakeholders.
Own your data.
Studies have shown that about one-third of project data is lost by closeout. That represents significant wasted value . . . and significant risk for owners. The solution is to use a construction management platform that protects your interests, not one designed for contractors’ convenience. Robust data reporting, airtight security, and cloud-based accessibility are all important, but what’s really key is that the owner owns the license and has full control over everything on the platform. And of course, the benefit of even the best software is compromised if the AEC stakeholders on the project aren’t compelled to use it with fidelity.
There’s no silver bullet when it comes to risk management. And ultimately risk can only be mitigated, not eliminated. The best strategy is ultimately multi-pronged: assemble the right people for your construction team, create consistent processes, and leverage the right construction project management software to maintain visibility and accountability from planning through close-out.
Owner Insite’s secure, cloud-based software can be your secret weapon in the never-ending battle to mitigate project risk. No other platform offers the same level of owner visibility or control — essential for making data-informed decisions. With Owner Insite’s intuitive, owner-focused tools, you can better anticipate project challenges or more quickly recover from unforeseen setbacks. There’s no better tool on the market for safeguarding your interests and maximizing the value of your investment.
See for yourself by contacting us today to find out more or to schedule a free demonstration.
In these risky times, it’s a tool you can’t afford not to have!