Month: November 2020

KPIs Project Managers Should Be Tracking

Post author By Vanja Likic
Post date November 30, 2020

Laptop displaying a dashboard for a construction job

Everyone wants to be successful, but how do you know what success looks like to your company? Many companies use KPIs—that is, Key Performance Indicators—to outline expectations and define what they consider measures of success.

So, what exactly is a KPI? According to Construction Financial Management Association (CFMA), KPIs are “vital signals that help indicate if your business is functioning according to plan” and can be further understood by breaking down each word in the acronym:

Key: An important or vital aspect. It means you have to prioritize. However, it doesn’t mean you can leave everything on the list and just shift the order of priorities. Everything you measure can’t be considered a key metric. Start with a manageable number. We typically see organizations effectively use 3-7 KPIs. (CFMA)
Performance: The manner in which something operates, functions, or behaves. Just like an engine’s performance can be measured by more than its miles per gallon, a company’s performance needs to look beyond profit metrics. (CFMA)
Indicator: A sign that gives information about and draws attention to a condition. This is usually a number, percent, or color code that quickly conveys favorable or non-favorable status. (CFMA)

From a construction standpoint, KPIs help gauge the success of a project and to assess performance against strategic and operational goals. KPIs are typically established and agreed upon at the beginning of a project in order to solidify responsibilities and to ensure everyone understands what’s expected of them. Factual data is essential in order to build value and achieve sustainable growth.

To effectively analyze project performance, it’s necessary to prioritize which KPIs will be weighted most heavily, as well as which will most accurately reflect the status and health of a project. While many of us are quick to rely on financials as the leading indicators of success, it’s important to understand that success can’t always be measured strictly within a quantitative framework and there are other essential construction KPIs that need to be considered as well.

Hard numbers and facts are often what precipitate and drive change. Without relevant and timely data, it is difficult to gauge how companies are faring.

So which KPIs should project managers be tracking? Below are five critical categories to consider when developing your construction project KPIs:

1. Safety

Arguably now more than ever, worker safety needs to be a top priority for construction companies. Safety incidents can lead to costly project delays, increased insurance premiums, or other unexpected costs—and, therefore, investing in worker safety will save you money in both the short- and long-term.

Safety KPIs may include:

Safety/incident rate
Number of safety meetings/communications
Number of accidents per supplier
Number of time-loss claims
Number of serious injury claims

2. Quality, Reliability & Environment

Keeping a pulse on these is critical to ensuring a project stays on-track and within budget as it reduces the likelihood for changes, rework and holds businesses accountable to the environment. Quality KPIs will also help you evaluate how the project has progressed if it’s passing required inspections, if the work is being done to satisfaction and if you can rely on this performance for the long-term.

Quality KPIs may include:

Number of errors/defects & callbacks
Time to rectify defects
Incident reports
Total cost of rework
Number of total site inspections
Number of passed site inspections
Community complaints
Corporate social responsibility policy
Consultant-contractor construction coordination
The quality and performance of the building at substantial completion
The quality and performance of the building at the end of the 1- year warranty
Reliability – Percentage of projects (by number and value) that are “on budget” and “on schedule” at substantial completion.
Building energy use
Construction waste diverted

3. Performance

Performance metrics help measure worker, equipment and economic productivity and how the project and business are developing. By paying attention to how much time and effort is required to complete each portion of the project, teams can reallocate resources to the areas that need them most to keep the project on time and within scope.

Performance KPIs may include:

Average revenue per hour worked
Percent of wasted time (equipment and labor)
Amount of waste/recycling per job
Economic performance
Characteristics of businesses
Productivity measured in terms of GDP contributed per worker
Business Size & Formation

4. People/Employees

In addition to tracking employee performance, it’s important to also measure their development and satisfaction. Happy workers are more likely to perform better, and to stay with the company longer. Not only does employee satisfaction lead to improved quality of work, it reduces the likelihood of churn and therefore also saves on hiring and training costs.

Employee KPIs may include:

Turnover rate
Worker satisfaction
Training completion rate
Workforce
Education
Youth/Gender/Diversity
Wages
Unionization
Qualification

5. Budget & Forecast

Knowing how and where a project’s budget is being spent is one of the most important roles of a project manager. It’s also crucial for them to be able to identify and understand any deviation from the budget in order to improve future planning and job costing, in addition to limiting waste and reducing inefficiencies.

Budget KPIs may include:

Budget variance
Cost Performance Index
Line items in budget
Project Pipeline – Total value of proposed projects
Total Number of Building Permits Available
Capital expenditures
Cost to build
Interest rates
Product price
R&D spending
Total NUMBER of projects within +/- 5% of the tender price: • Total VALUE of projects within +/- 5% of the tender price
Total NUMBER & VALUE of projects that were completed on or before the predicted date:

How to Choose the Right KPIs for Your Project

Measuring, reporting and tracking KPIs can be a complex endeavor. KPIs need to be introduced deliberately and in small steps. Ensure the set of KPIs provide tangible data that can help construction businesses understand their company, industry and the market better. While action not data drives improvement, KPIs cannot tell businesses what the “right” thing to do might be but they can help illuminate and uncover new or poorly understood factors that can help inform decisions.

Because every project and business is different, KPIs should be developed on a project-by-project basis. When developing future KPIs, a good place to start is by examining past projects to reflect upon successes and failures. As the saying goes, “hindsight is 20/20” and evaluating past mistakes gives you the opportunity to plan better for the future.

Remember that while financial KPIs are most commonly used to measure success, there are other critical KPI categories that also need to be considered to fully understand your project and to provide you with the information needed to improve operational efficiency.

Conclusion

Every construction project has a number of moving parts and KPIs that need to be monitored closely, and we’re here to help you keep track of the information that matters. Today, technology and the practices that exploit them are becoming a greater factor in competitiveness and profitability. The degree to which businesses invest in R&D is an indicator of how ready they are to adopt new technologies and how resilient thy might be to unforeseen events.

To learn how our all-in-one, cloud-based construction management software can ensure your project’s processes are clearly defined and optimized through automation, click here.

Author Biography:

Kathryn Dressler is a content strategist with more than 10 years of experience across the spectrum of marketing services, including blogging, social media, public relations, copywriting and editorial services.

Tags budgeting, forecasting, project management, reports

Tips & Advice

5 Ways Construction Software Can Help You Save Money

Post author By Vanja Likic
Post date November 22, 2020

Close up view of an accountant utilizing the AP approval screen in Premier Construction Software to process ap invoices for subcontractors

You’ve reached a point where you’re wondering — “Is investing in construction software really worth it? Can it really save me time and money? How?”

Whether it was caused by a project delay or miscommunication resulting in costly mistakes, something prompted you to start researching and considering the potential benefits and savings construction software can offer.

Who Can Benefit from Construction Software?

Well, the short and simple answer is: everyone. But for our purposes, we’ll focus on the benefits to project members and project managers (with the inherent understanding that any time and money saved at the project level will ultimately benefit the company owner, too).

When you start to consider savings, here’s an easy way to think about it: direct cost/monetary savings, and “everything else” (meaning, everything else that may indirectly save you money).

So, what are some ways construction software can help you save money? Below are five examples:

1. Construction software improves communication and collaboration between all project members.

According to The 2020 National Construction Payment Report: Spring Spotlight on Jobsite Coordination, “nearly 70% of contractors surveyed said that poor jobsite coordination often causes projects to run over budget or past deadlines” and “over half of contractors (54%) blame delays on poor coordination between subcontractors.” Another key finding from the report, which is arguably the most important: “Survey answers reveal that most of the time, delays on a construction project are entirely preventable.”

You read that right. Most of the time, these costly mistakes (that are happening frequently) can be avoided with improved communication. Construction software offers a centralized location where critical project information can be saved, stored, accessed and updated—in real-time, and anywhere, by everyone who needs it.

2. Construction software puts the project managers (PMs) back in control.

An all-in-one, cloud-based construction software that offers both accounting and job costing solutions is the crème de la crème for project managers. With accounting and job costing in sync, project managers know they can trust the data to make informed decisions.

Here are a few key ways an all-in-one solution puts PMs in control:

Detailed Reports: Project managers can get the reports they need to make faster and smarter decisions in seconds. This means PMs can spend more time analyzing the numbers instead of preparing them. Additionally, PMs can easily view their jobs and drill down into the accounting information to view invoice or payment details.
Dashboards: Consolidated dashboards make it easy to digest and consume multiple reports at once by displaying high level KPIs, at-risk items, an approval section, pending items and summarized cost and revenue summary with full drill-down capability. In seconds, PMs can view a high-level overview across all jobs, and then quickly drill down into any of the details to view the contract details, what has been billed and if payment has been released.
Change Order Management: PMs can send, track, and approve of change orders all from one place—and, best of all, approved change orders will automatically be reflected in reports.

3. Construction software reduces risk by ensuring data is saved safely and securely.

One reason that construction companies may be reluctant to switch to a cloud-based solution is because of security concerns. For some, the idea of maintaining physical control over documents somehow seems safer than having everything stored on a server. However, reliable cloud-based applications will have strong safeguards in place to ensure your information stays protected.

Additionally, document controls can be set up to restrict company, job and menu access to individual users or by group/role. Administrators can also set read or write access for each module, as well as restrictions on who can post, approve, edit, delete, upload, or revise documents.

4. Construction software saves time and money by reducing employee wages and training costs.

In the business world, time is money—and construction software can save time in a number of ways. Training new team members can come at a great cost, but construction software can cut down on training time by providing one place where new team members can easily access and view all the pertinent project information, as well as the project timeline and details about next steps. This allows them to become familiar with the project in a fraction of the time, and serves as a very valuable training device. Using a software solution to train new team members translates into savings by reducing the cost of paying another team member or employee to do it.

5. Construction software saves money with lower upfront cost structure.

On-premise systems tend to cost more upfront because of the required software and server installation, cost of software licenses, as well as the cost of an IT team to configure the system and provide ongoing maintenance. Additional cost considerations include physical space to store an on-premise system, monthly maintenance fees, backup software systems, and electricity consumption. With a cloud-based, SaaS solution, all you need is an internet connection and a device.

Why Doesn’t Everyone Use Construction Software?

Despite the many benefits and savings, there are still companies that haven’t gotten onboard with a construction software solution? Why, you may ask?

The answer usually falls into two categories:

It’s hard to change. Implementing a comprehensive software solution requires time investment upfront in order to save down the road. Many construction company owners are so strapped for time and resources they simply feel they don’t have the ability or willingness to change the way things are done.
Not everyone has felt the urgency to implement a construction software solution. Sure, maybe you (the project member or project manager) have recognized the need for a new solution to an ongoing problem, but maybe the company owner hasn’t. Or perhaps there isn’t someone on the team who’s willing to be a team advocate to rally for change.

What Can You Do?

The good news is: anyone can become a successful advocate for change! While you may feel nervous to propose the implementation of a construction software solution, you may be surprised at how well received the idea is if you provide sufficient information to support your proposal that construction software can—and will—save time and money.

It’s pretty safe to assume all company owners want to reduce costs and save money, they just need to understand how. So if you’re looking for ideas about how to approach this conversation with your boss or company owner, you can use this blog as a guide for which key points to include in your discussion, or click here to contact us for more information.

Author Biography:

Tags cloud construction software, save costs

Industry Insight

5 Trends to Watch for in the Construction Industry in 2021

Post author By Vanja Likic
Post date November 16, 2020

Large construction site including several cranes working on a building complex, with clear blue sky and the sun

In an earlier blog, we covered the top construction industry trends in 2020 and discussed why trend monitoring is critical in competitive markets. This week, we’re going to look ahead and provide our predictions for five construction industry trends to watch in 2021.

As a result of the unprecedented global pandemic, the construction industry has been hit with a torrent of unexpected challenges which has led to shifts in the way everyday business is done. With looming uncertainty about if and when a vaccine will become available, we expect many of this year’s trends to carry into next year, especially as it relates to safety and adopting practices that enable projects to be completed with low worker density.

Below are our predictions for five of the top construction industry trends to watch in 2021:

Safety

Let’s begin with the obvious. Worker safety has always been a priority in construction, but the COVID-19 pandemic brought it to the top of the list by creating the need for new requirements and protocols in order to allow work to continue while mitigating the risk of spreading the disease.

Unlike other industries that could largely shift to work-from-home models, the construction industry is highly collaborative and requires laborers to be physically present on the job site. Currently, there is not a vaccine available to cure or curtail the coronavirus, so we expect social distancing, sanitization and PPE requirements to carry into the new year.

Prefabrication & Modular Construction

Already on the rise in 2020, the modular construction market is poised for continued growth in 2021 and is projected to reach as high as $157 billion by 2023. This anticipated market growth can be attributed to several key factors, including its suitability for the times in the post-pandemic era.

Manufactured buildings are typically built in a way that requires low worker density, and in large buildings that make social distancing easier. Additionally, the equipment used for these processes—for example, conveyors, lifts and cranes—is already designed to allow fewer workers to get the job done in order to save on labor costs, which also happens to be beneficial in times when social distancing is required.

Green Construction & Sustainability

Every year, the shift toward green construction and sustainability practices continues to grow as businesses and clients alike are recognizing the long-term benefits. Sustainability and low-impact processes form the foundation of green construction, in addition to the wise use of materials at every stage to reduce waste.

While these practices are important to preserving the environment and its limited resources, saving the planet isn’t the only motivating factor for businesses to get on-board with the green building trend. It’s becoming more common for clients to request sustainability specifications in order to reach eco-friendly designations (like LEED certification) or to receive tax credits. Additionally, the durability, longevity and efficiency of eco-friendly building materials like timbercrete, hempcrete and bamboo are other compelling reasons companies are adopting more environmentally-friendly practices.

3D Printing

The coronavirus outbreak has unlocked a huge potential growth opportunity in the 3D printing technology market, with some estimates predicting the global market will reach $0.12 billion in 2023 at CAGR of 147.79%. Given its ability to build complex structures within a set timeframe, and at a reasonable cost, 3D printing in construction is becoming more and more attractive as it’s also one of the most efficient ways to reduce worker density.

3D printing’s ability to produce parts on-demand, as well as its inherent cost savings and flexibility, are unleashing creative new solutions that will drive construction technology forward and toward greater sustainability practices.

Design Technology

Building Information Technology (BIM) has already transformed the construction industry by changing the way design, construction and project management is handled—and it’s predicted to continue doing so as the technology becomes more advanced and new opportunities are created. A recent study predicts the global BIM market will reach $10 billion this year, and then grow at 13% CAGR over the next four years.

BIM has been instrumental in the digital transformation of the sector, and it’s become even more widely adopted this year following lockdown protocols because of its ability to allow projects to proceed in the digital space when project members were unable to meet in person. As BIM technology continues to advance so, too, will the industry’s reliance upon it in the coming year.

Final Thoughts

While no one can predict the future with certainty, we can look to history to make educated guesses. Based on what we’ve seen so far this year, we expect the trends outlined above to continue to drive change within the construction industry into next year, as well as the foreseeable future.

For more construction industry insights and resources, click here.

Author Biography:

Tags Construction

Company News Press Release

Jonas Premier Named Best Construction Management Software of 2020 by Digital.com

Post author By Vanja Likic
Post date November 13, 2020

Markham, ON – Digital.com, a leading independent review website for small business online tools, products, and services, has named Jonas Premier to its list of the best construction management software (CMS) of 2020. The top solutions were evaluated based on project scheduling, tracking, finances, and document management.

Premier Construction Software was named the best construction management software in 2020 by Digital.com

Jonas Premier and other software companies were required to offer project management and job costing capabilities that can monitor estimates and track change orders, submittals, purchase orders and subcontract agreements. Additional qualifications include built-in financial capabilities such as tracking and processing of accounts payable invoices and billing. The guide also prioritized software with efficient project documentation that provides reporting tools, file sharing, and real-time updates.

Digital.com’s research team conducted a 40-hour assessment of over 110 companies from across the web. To access the complete list of best construction management software, please visit https://digital.com/construction-management-software/.

ABOUT JONAS PREMIER
Jonas Premier is a true cloud, all-in-one accounting, job cost, project, document and drawing management solution designed to meet the needs of GCs, Developers, Design Build, and Homebuilders. Trusted by thousands of companies, Premier partners with forward thinking, progressive construction companies to provide a fully integrated solution for office and field staff operating on Mac, PC and any mobile device. Premier operates in North America as well as Australia, providing a true cloud solution that meets the needs of both markets today.

ABOUT DIGITAL.COM
Digital.com reviews and compares the best products, services, and software for running or growing a small business website or online shop. The platform collects twitter comments and uses sentiment analysis to score companies and their products. Digital.com was founded in 2015 and formerly known as Review Squirrel. To learn more, visit https://digital.com/.

Trends & Technology

How is AI & Machine Learning Transforming the Construction Industry

Post author By Vanja Likic
Post date November 9, 2020

Machine learning , artificial intelligence, ai, deep learning blockchain neural network concept.

In recent years, more and more construction companies have started to utilize artificial intelligence (AI) and machine learning in various ways to optimize efficiency, reduce costs, mitigate risks and improve safety. We often hear the terms used interchangeably and while they are closely linked, they’re not quite the same thing. Let’s begin by defining and differentiating the two concepts, and then we’ll discuss how their applications are already being used to transform the construction industry as we know it.

What is Artificial Intelligence (AI)?

According to McKinsey & Company, artificial intelligence (AI) is typically defined as “the ability of a machine to perform cognitive functions we associate with human minds, such as perceiving, reasoning, learning, interacting with the environment, problem solving, and even exercising creativity. Examples of technologies that enable AI to solve business problems are robotics and autonomous vehicles, computer vision, language, virtual agents, and machine learning.”

Simply put, AI is used to describe technology that is capable of performing, or augmenting, cognitive tasks that once had to be done by humans.

What is Machine Learning?

Machine learning is a type of AI in which “algorithms detect patterns and learn how to make predictions and recommendations by processing data and experiences, rather than by receiving explicit programming instruction. The algorithms also adapt in response to new data and experiences to improve efficacy over time.” (McKinsey & Company)

The four types of machine learning are: supervised learning, unsupervised learning, reinforcement learning, and semi-supervised machine learning.

Examples of AI & Machine Learning in Construction

The possibilities of utilizing AI and machine learning in construction are vast, as are the benefits. Below are five ways construction companies are already implementing these technologies to improve processes and recognizing the benefits:

1. Increased productivity on job sites

Self-driving construction machinery is being used to perform necessary but repetitive tasks like bricklaying, concrete pouring, welding and demolition in lieu of human labor given the technology’s ability to complete the tasks quicker and more efficiently. Autonomous or semi-autonomous bulldozers can be programmed to exact specifications to perform excavation and prep work needed to get a site ready for construction. Project managers are also able to track progress in real-time using cameras, facial recognition software and other technology to assess productivity and adherence to protocol.

2. More efficient project planning

Some companies are already using AI-powered robots to capture 3D scans of construction sites, which are then uploaded into a deep neural network that can classify the status of various sub-projects. This allows for early intervention if something seems off-track, so the team can handle small issues before they turn into more complex problems.

3. Risk mitigation

Every project phase has inherent risks associated with quality, safety, time or cost. Today there are AI and machine learning solutions that can be used to assess risk and automatically assign priority to complex issues or areas most prone to threats. Time and resources are limited, and this helps project teams understand where to focus their time and effort in order to mitigate the most high-risk situations.

4. Prevent budget overrun

Even with careful planning and skilled project teams, it’s not uncommon for projects to run over budget given the number of variables that can change and directly impact costs or the schedule. Artificial neural networks—brain-inspired systems intended to replicate the way humans learn—can be employed to predict potential budget pitfalls by assessing factors like project size, contract type and performance of team members, as well as analyzing other patterns too complex for the human mind, to reduce the likelihood of budget overruns.

5. Improved worker safety

The construction industry is witnessing a rise of machines and sensors that are capable of increasing jobsite safety and reducing risk—for example, sensors that can detect worksite weather conditions to assess risk factors. These tools, when combined with AI, are able to intelligently monitor job sites by analyzing data in real-time to predict the likelihood of problems or malfunctions that may occur and translating that data into actionable insights. AI-enabled surveillance systems with facial and object recognition software also make it possible to detect unsafe behavior and alert team members of potential hazards.

A Look to the Future

According to a recent Research Dive report, “the artificial intelligence in construction market size was $408.1 Million by end of 2018, and is anticipated to reach $ 2,642.4 Million by 2026, growing with a CAGR of 26.3% during the forecast period.” The continued growth will largely be driven by the cost efficiency and availability of advanced AI products, as well as the ability to more accurately predict needs, assess risks and improve safety.

For more construction industry insights, click here to check out our other blogs.

Author Biography:

Tags AI, Machine learning

ADDITIONAL INFORMATION

FEATURES

USE CASES

HELP

CONTACT US

FOLLOW US