Categories
Tips & Advice Trends & Technology

How does the use of construction project management software contribute to your risk management strategy?

Construction project management is often more about preventing and mitigating risk than actual project execution. While workers in the field concentrate on executing the work and quality control, management teams are looking ahead to see what potential problems they can identify before the next phase of the project.

Teams must work together to ensure project safety, schedule maintenance, and budget control. Communication and documentation are two of the most important tools available to do this. Construction project management software can help teams better track and respond to anticipated risk.

Before we get into how project management software helps teams with risk, we’ll look at the potential areas of risk on a project and how construction teams go about managing risk.

Potential Areas of Risk

Project manager stressing about the risks associated with commercial construction project job

There are many potential areas of risk on a construction project. Teams must identify and be aware of them all so they can work collaboratively to address them.

Safety – Construction is dangerous work. There are lots of physical dangers on a project that must be either prevented or managed. These days there are also health risks to consider. Additionally, if a project is being performed in a public space, public safety and health also have to be protected.

Financial – Contractors are vulnerable to financial risks such as unplanned costs and lower production rates. Tracking work costs and daily production, including delays and obstacles, is important to quantify these risks.

Contractual – Most construction project contracts push responsibility for costs and delays down to the next tier of contractor. GCs and subcontractors must read their contracts carefully, so they know what they’re responsible for.

Project – Projects are subject to delays and additional costs due to poor work management, scheduling issues, and unavoidable external conditions. Sometimes these problems can be avoided with better management and planning.

Stakeholder – Poor owner communication and delays in getting necessary information can lead to additional costs and schedule delays. There’s a higher chance of this happening when the owner is a public entity or there are several stakeholders involved in the project.

Environmental – Events such as natural disasters, weather, and fire can lead to damaged materials and work. This can set a project back and cause additional costs and delays.

Labor – Finding skilled workers is becoming more and more difficult, and trade subcontractors are scrambling to keep up with workloads and schedules.

Competition – Especially on hard bid projects, contractors are under pressure to be the low bidder, meaning there’s a chance they will cut corners to reduce project costs or cut scheduled time.

Construction Risk Management Process

The risk management process most contractors use is simple and straightforward. It involves three steps:

  1. Identify risks – First, the contractor must become familiar with all aspects of the project, including the scope of work and timeline for completion. Once they’ve done that, they’ll be better able to identify potential risks for the project. This is done by analyzing the flow of work, the individual tasks that must be completed, and the scheduled time, looking for potential conflicts or issues like those listed above.
  2. Prioritize risks – Next, the project management team will look at each of the risks they’ve identified and determine the probability that it will happen, potential severity of the risk, and its potential effect on the project. Risks with the highest probability and potential severity will be prioritized ahead of those with lower probability and severity. This allows the project team to make strategic decisions about how to address these risks, addressing the most probable ones first.
  3. Manage risks – Once the risks have been identified and prioritized, the team develops a plan to mitigate or prevent them from happening. They focus on the higher priority risks first, ensuring that they are addressed before moving on to the lower priority ones.

The risk management process detailed above is repeated many times as the project moves along. Risks that were present in the initial stages of a project may not be of concern later on. Additionally, new risks may be identified as work progresses and additional information comes to light. Teams need to be ready to respond to these risks proactively, so they should be constantly assessing the job for potential issues.

How Construction Project Management Software Can Help

Manage construction projects and submittals using Premier Construction Software

Construction project management software can help project teams reduce or mitigate many of the risks found on a project. Although it can’t address all potential risks, it does provide a way to speed communication and document what is being done to address potential issues.

Reporting – Project management software allows teams to quickly see overdue tasks and documents that may delay the project. Teams can run reports that show items outstanding as well as who is responsible for responding to those items. For example, tasks such as completing punch list items need to be addressed quickly so owners can move in. Also, documents like submittals and RFIs require timely responses to keep the project moving. Knowing who needs to do what helps teams keep the project on schedule.

Tracking – These days construction companies need to track health checks and other safety-related inspections more closely. Daily recording of inspection results and health checks in project management software allows team members to see their status and predict potential problems. Recording the number of crews and where they’re working can also help with contact tracing, should that be needed.

Document control – Given the number of documents that are created and distributed during a project, having a central hub where they are stored is a must. Document storage, version control, and distribution can easily be managed by project management software, ensuring everyone is working from the latest documents and has access to them from wherever they are.

Communication – Just like for documents, having a central location for all your project correspondence is a necessity. Team members then have only one place to look when it comes to searching for an email or notice. In addition, all communication is tracked and documented within the project management system. Specific items can easily be researched and recalled in minutes.

Budget – Having an integrated system where costs are instantly updated in the field allows teams to respond to potential budget issues quickly. Project managers can view and manage the budget and costs from the project site, without having to request a report from the office. They’re also able to predict future costs based on commitments, allowing for early detection of over budget items so they can adjust them as needed.

PM Software Helps Project Teams Assess and Prevent Risk

Laptop displaying a reporting dashboard for a construction project managers

Construction project management software allows project teams to create processes to help them plan for and mitigate risks on their projects. These processes, combined with documentation and tracking, help ensure that teams are prepared for and respond to risks.

The ability to get up-to-date information, including contract documents, correspondence, and status updates, allows teams to see where they’re vulnerable to risk and take action to control or mitigate it.

Premier’s job dashboard allows project managers to assess the status of their jobs from one screen. Whether the job is running overbudget or there are pending items that require their attention, an all-in-one construction management solution can help your team identify at-risk items before it’s too late. To learn more about Premier Construction Software, schedule a demo today.

 

Author Biography:

Dawn Killough is a construction writer with over 20 years of experience with construction payments, from the perspectives of subcontractors and general contractors. Dawn has held roles such as a staff accountant, green building advisor, project assistant, and contract administrator.  Her work for general contractors, design firms, and subcontractors has even led to the publication of blogs on several construction tech websites and her book, Green Building Design 101.

Categories
Features Tips & Advice

How to manage RFIs to increase the success of your construction projects

We have all heard the saying time is money. This especially holds true in the construction industry where one small setback has the ability to derail an entire project off course, both financially and time wise.

Requests for information, or more commonly known as RFIs, are more than just inquiries about a current project. They are a formal written process that documents the clarification of plans, drawings, specifications and agreements between contractors, designer, supplier, subcontractors etc. It can be used to discuss construction items, timing and schedule, design change or clarification, change in process, omissions in specs or plans, material change, value engineering, utility conflict and or any other issues.

RFIs are a project management tracking tool to keep all these documents traced and recorded for both legal and organizational purposes so you can build correctly and deliver high-quality projects on time and on budget.

However, when it comes to managing RFIs, many construction businesses struggle to do so effectively. There can be hundreds of pending RFIs and if there isn’t a process in place to manage them, information might be missed, or documents might end up lost.

With the help of construction management software, this process has become a lot easier for construction businesses to control. To fully optimize your process, here are a few best practices to keep in mind.

Best practices for sending an RFI in construction management software

  • Before sending an RFI, you should be able to answer the 5 W’s & H.
    • Who will be impacted and who should be involved?
    • What is the issue and what tasks must be completed?
    • Where on the job site/drawings/is the budget impacted?
    • Why is this important- is there a time, cost or legal implication?
    • When is the response required and when are the impacted parties to be informed by?
    • How will the issue be resolved? How are you proposing it be resolved? How does this impact the job? Is there a change order, budget transfer etc.
  • Provide enough detail. If there is not enough information this can cause confusion and delay the project, as more time will be required for clarification. Avoid vague and generic comments and clearly identify the issue or inquiry that must be resolved. Provide some background information but ensure you only include relevant facts that pertain to the question you have asked.
  • Provide relevant documentation such as images, drawings or other documentation. Do not include unnecessary documents or information as this can confuse the recipient.
  • To avoid further delays, send requests as soon as you discover the need for additional information so this way, you have all the supporting documents. 
  • Limit each RFI to 1 topic. This will prevent questions from slipping through the cracks. If there is information overload and too many topics in the RFI there is a risk that no answer will be received and the project could become delayed.
  • When choosing recipients to include, ensure you are not including the wrong person. Only those who are directly involved should be included. This means anyone who was not involved or will not be impacted by the request should be excluded to avoid confusion.

There may be scenarios when you receive an RFI such as when you’re working with subcontractors. It’s important that you also respond accordingly to ensure there are no confusions or delays.

Tips for responding to RFIs in construction project management software

  • Always provide a definitive response and leave nothing to interpretation. When multiple options are presented there is a risk that different approaches will be followed by multiple recipients. Clearly state your recommendation I.e. use clear verbiage such as “We will paint the room blue”, instead of “We can paint the room red or blue. I like blue”.
  • Do not guess at what the issuer is trying to ask. Ensure you research the issue or ask relevant questions via a documented email. Verbal conversations are okay, but bear in mind paper trails such as emails between recipients can hold more credibility in case of a dispute.
  • Respond in a timely fashion. The rule of thumb is to respond back within a week. The longer the questions go unanswered, the bigger chance of delay.

Managing RFIs in Premier Construction Software

subcontractor completing an RFI using Premier's RFI request portalPremier Construction Software makes it easier than ever for construction companies to manage RFIs all from one platform.  Premier allows you to create RFIs, track responses, and view all applicable RFI’s for specific jobs.

By sending emails directly from the software, Premier helps minimize the no-response rate which is a likely cause of disputes in contracts. You can efficiently and conveniently track who you have received responses from and send reminder emails to those who have not. The system will automatically update the status of the RFI once the user responds. Users also have the option to manually add responses that could have taken place verbally over the phone. 

Premier also offers the flexibility to attach documents and drawings to RFIs. This ensures everyone involved has the information required to effectively make a decision and no documents are lost. For a quick audit on the status of all RFIs, users can easily generate reports for different jobs to review outstanding responses, and address pending items as quickly as possible to help avoid delays.

To learn more about Premier Construction Software and how it can improve your RFI process, get in touch with us today.

Categories
Tips & Advice

What Are Punch Lists in the Construction Industry?

A punch list—also sometimes referred to as a snag list, deficiency list, or punch out list—is a document prepared during the project closeout process to outline tasks that have yet to be completed, or items that need to be corrected, before a project can be considered finished. 

Punch lists are typically created when a project reaches substantial completion, a legal term used in construction to signify when responsibility for the project shifts to the owner rather than the contractor. More specifically, the American Institute of Architects (AIA) defines substantial completion as “the stage in the progress of the Work where the Work or designated portion is sufficiently complete in accordance with the Contract Documents so that the Owner can occupy or utilize the Work for its intended use.”  

Although punch lists aren’t considered mandatory, it is a traditional part of the construction process as it gives key project members—for example, the general contractor (GC), subcontractors, architect and owner—an opportunity to double-check the work to ensure everything has been completed to satisfaction before project closeout and final payment. 

What’s included in a punch list? 

There are a number of items that can be included on a punch list, but most of the time it’s limited to minor items that need to be completed or corrected before a project can be closed out. The fixes addressed in a punch list should be small in scope as any major changes were likely resolved earlier in the process through a change order

A punch list will typically include the following:

  • Mechanical issues
  • Incorrect installations
  • Interior/exterior issues
  • Damaged items
  • Uncompleted/unaddressed work outlined in the original contract

Because no building project will ever be perfect and there will always be some level of error(s), the GC must determine what is (or is not) considered a reasonable deficiency. Reasonable deficiencies—like a small ding or a little paint splatter—are minor flaws that should be outlined and explained, but don’t necessarily need to be corrected as the work still satisfies the project requirements. Unreasonable flaws—like the walls being painted an incorrect color, or the wrong fixture being installed—are errors that must be fixed.

Who’s responsible for a punch list?

General contractor completing a punch list near the end of project

While it’s typically the GC’s responsibility to ensure all the line items are addressed and resolved before a completion certificate is issued, everyone on the project team has a role in the execution of a punch list—especially because it’s tied to final payment.

A punch list is usually developed after the GC and owner (or the owner’s representative) do an initial walkthrough together to identify incomplete or non-conforming work. If there is an architect on the team, they may join the GC and the owner for the job site assessment; otherwise, the GC will send the architect the punch list so they can do their own walk through to ensure work has been completed to their design specifications. The architect then updates the punch list and sends it back to the GC. From there, the GC distributes the punch list to the subcontractors and is responsible for ensuring the work gets completed. 

Typically, the final payment to the GC—referred to as retainage or retention—is contingent upon completion of items on the punch list within the specified time frame. This amount of money (usually between 2-10% of the total contract value) is deliberately withheld to ensure all the work gets completed and in accordance with the contract documents.

How can you improve punch list management? 

The term punch list gets its name from the historical process of punching a hole next to a line item in a document once it was completed, with the goal being to get to zero before the project reaches substantial completion. It’s an ambitious goal, but there are steps companies can take to improve their chances of going for zero-punch. 

Utilizing construction management software is one of the most effective ways to improve communication and collaboration across project stakeholders, securely store and maintain construction documents, and establish responsibility and accountability between team members—all of which reduces the likelihood of errors and rework, therefore also helping companies get closer to a zero-punch.

For more information about Premier Construction Software and how we can help improve your processes, click here to schedule a personalized product tour. 

 

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.

Categories
Tips & Advice

KPIs Project Managers Should Be Tracking

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

People working in construction site. Young men at work in new house inside apartment building. Latino manual worker helping injured co-worker after accident on duty

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

Two male engineer looking commercial building structure, blur image

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.

Manage construction projects with the job dashboard in Premier

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.

Categories
Industry Insight Resources

Best Practices For Software Implementation

Beginnings are always messy and this is often true in the Construction Industry. Especially at the start of a new project, which can make the entire project messy from day one. Through proper planning, possible pitfalls can most definitely be avoided.

The same can be said for implementing new construction software. Contractors often hesitate investing in a more efficient system – typically not due to the cost, but rather the anticipated stress associated with change management.

By applying your skills and know-how of running a successful and profitable construction project, you can avoid these common missteps when implementing a new construction software. Below are some of the most common roadblocks and related best practices to curb them.

1. Begin with a Plan

When you purchase a new construction software package, approach the implementation process the same way you would approach a new job – with a solid plan. Tap into the resources of your software provider in order to develop a logical and effective implementation strategy in order to be successful. They have helped thousands of clients before you, so with an open mind, allow them to be your trusted partner throughout the process.

2.  Define Success

Success is more than simply having the system up and running. Look deeper into defining what success is. What procedures have you found that haven’t worked with your current software and how can those procedures be improved? Identify these measurements of success at the onset of implementing new software.

3.  Assign a Project Manager Lead

Typically, you wouldn’t begin a new job without a Project Manager, so do not start a software transition without one. Ensure you have a dedicated Project Manager on board from your company and ensure they play a substantial role during the implementation process. Ultimately, the Project Manager will be one of the champions during start to finish of implementation and further on.

4.  Review Old Procedures

The main reason for changing software packages is to increase productivity and profitability. In order to increase this, it is important to review old procedures in order to make the necessary adjustments. Spend the time up front to establish a more standardized structure for all of your jobs and overall operations within your company.

5.  Review Outdated Information

Before switching over to your new software provider, review all of your records. By eliminating duplicate vendors, evaluating outstanding items and updating employee information – you can start with a clean set of data, which will help you when developing new procedures or tweaking existing ones.

6.  Approach Implementation in Phases

Transitioning over to a new software package should be approached in phases, just like a job. Map out each phase along with your software provider and share this with your team leads. By approaching this in phases, it will keep your staff from feeling overwhelmed as you move throughout implementation because you are giving them time to learn the basics before adding more complex functionality.

7.  Stay Positive and take Advantage!

Implementing new software can come with a bag of changing emotions – excitement, dread, frustration and impatience. Change can be difficult but remaining positive and taking advantage of the support your software provider is arming you with, will make all the difference! Keep an open line of communication between yourself and your team, as well as the software provider. Increase your knowledge base and overall efficiency by taking advantage of any additional resources, webinars and much more. Most importantly, take a hands on approach to training in order to utilize the software to is maximum ability.

Change is necessary for growth. Set expectations early on and approach the brand new implementation process with a solid strategy!