Many construction companies are stuck in an endless pattern of responding to emergencies and scrambling to keep projects profitable. It’s time to end the cycle.
If you want to escape the repetition of facing an unexpected project event, enacting a construction resource management plan in response and hoping you can keep a project profitable, you aren’t alone. The rise of digital technologies in business has left many companies realizing they can use data to shift from reactive operational models. The construction industry may be behind some other sectors, but it isn’t too late to adapt.
Shifting from a responsive project resource management practice into proactive resource planning can empower firms to maximize their assets and get more value from projects. To start, you need to cement the distinction between the two into your mind:
Resource management vs. resource planning
We could go through a bunch of analogies and metaphors to tell you why management is different than planning, but let’s keep it simple. Here’s a hypothetical scenario similar to what builders face all the time, and how the situation varies in each setup.
Here’s the scenario: You have a team working on a multi-unit dwelling project that begins with demolition of an old building. From there, the plan is to analyze the site post-demolition, create the foundation for the new structure and construct the property. Demolition goes smoothly. With the previous home out of the way, you are able do a deeper site survey and find that the foundation will need stronger reinforcement than you initially anticipated. You find out you can tweak the plans to use a reinforced material in strategic locations to make the change with minimal disruption, but you have limited supply of that material on hand.
How to respond with resource management:
In a traditional operational model, a construction firm would respond to this problem by analyzing what’s available relative to what is needed. There may be assets available at another site, after all. Your site manager notifies the project lead, who then contacts other sites to see if they have excess supply available to borrow from.
From there, you’re looking at multiple projects from the top down, trying to identify which timelines can be tweaked and which supplies can be repurposed to solve this problem. You now have to scramble to project adjusted timelines, see how long it will take vendors to ship replacement inventory, recalculate project costs and adjust revenue expectations. All of this is further complicated if you don’t have the budget space to deal with the cost overage.
Sure, you could just order new supply and put your multi-unit residential development on hold, but if you do that while you have available supply unused at another site, you’re wasting time. A good resource management strategy can optimize what’s available at a given time, but it comes with a great deal of overhead and relies heavily on coordination across teams. The potential pitfalls are plentiful.
How to get ahead with resource forecasting:
In this same scenario, an organization engaging in forecasting will have analyzed past projects and anticipated potential supply or financial shortfalls in advance. Your team may know that a project involving demolition and rebuild can introduce complications, but until you dig into historic data trends, you can’t really project the precise cost and material bills that can come with those complications. Furthermore, the business will have visibility into company-wide resource availability at the project’s outset.
An organization that is proactive about resource forecasting won’t necessarily anticipate every contingency, but they will have created flexibility in the budget, project schedule and materials strategy to accommodate for reasonable unexpected issues. In this scenario, this could play out in having extra reinforced beams in place from the start, knowing that unused materials can be passed on to a future project anyway, for example. If the capital isn’t immediately available, creative scheduling and project management could help to sidestep the issue.
Embracing a proactive approach
Resource planning is often overly complicated for construction firms because organizations can’t easily see what they have available at a given time and report on historic data trends. Modern enterprise resource planning solutions are changing this by combining user-friendly visualizations with intuitive dashboards so site, project and business leaders can easily get the information they need to make decisions based on the entire organization’s resource plan.
When these organizational resource planning tools are combined with collaborative project management systems that extend to the field, all stakeholders are left with the ability to generate and access the information they need to get ahead of resource challenges. Shifting from managing emergencies to getting ahead of problems before they arise.
To run a profitable operation, your resource managers and schedulers strive to achieve as close to 100% utilization as possible. Estimating resource supply and demand with a high degree of accuracy is key to your success. When resource planning estimates are reliable, they materially enhance a firm’s ability to optimize utilization and to quickly adapt to changes.
In construction, your productivity determines your bottom line. As a result, it becomes easy to fixate your firm’s efforts on time—the most quantifiable measure of productivity—but is this focus coming at the expense of other components of your enterprise? In other words, are you considering the effect of resources—and their management—on your overall productivity?
This eBook is an opportunity to explore how a proactive resource planning tool is the key to addressing both your firm’s—and the construction industry’s—wider productivity challenge. Use this guide to audit your own firm’s resource planning practices by weighing them against the best strategies and latest technologies in resource planning.
Breakthrough growth created the need for Moss & Associates to scale rapidly: they needed a more ecient system that could scale along with them. Before CMiC, Moss used two separate systems for operations and accounting—information had to be re-keyed, wasting time and money. The firm was looking for total unification of capabilities into a system that could adapt as they grew. They wanted an easy-to-use web-based software platform that could save time. The firm soon met with two CMiC representatives who, according to Moss & Associates’ Sasha Seco, “showed confidence without the bells and whistles.”
To learn more about CMiC Field—The Solution That Empowers Your Field Organization with Total Visibility—download the brochure.
To learn more about CMiC Enterprise—Your Construction ERP for Growth—download the brochure.
Take a tour of the CMiC BI dashboard! Presented by Gord Rawlins and Oliver Ritchie.
You have a site manager facing a dilemma: A shipment of supplies just arrived damaged, making it impossible to work on the next stage of the project. There are a few options: Order replacements and delay work, change the plans to allow for alternative materials that local suppliers have on hand or adjust project strategies to allow for alternative work to be done while the supply issue is dealt with.
How would your site managers go about deciding which choice is best for this specific project? If you’re like most firms, your decision-maker will spend a couple of minutes thinking about the problem and make the choice based on anecdotal experience. Maybe the site manager knows that the vendor has a tendency to respond quickly to supply problems, for example, and determines that an immediate delay would be short and lead to less disruption.
This kind of instinctual decision-making is workable in small scale, but when you have a portfolio of projects running at once, you need your leaders to be able to make choices based on accurate data. This is where business intelligence tools come into play.
How BI works
It’s important to understand where BI fits within a broader analytics strategy. Big data is often approached as the process of gathering large amounts of structured and unstructured data and finding ways to put that information to use in day-to-day operations. For construction firms, the structured data can be transaction records, vendor performance profiles, and estimated and actual costs. Unstructured information can take the form of plans, equipment handbooks and similar forms of documentation.
As organizations engage with big data, they need to develop strategies to organize that information effectively and communicate it to end users. An enterprise resource planning (ERP) system provides the backend database for all of this information to reside, making it accessible to users across teams. BI technologies then take the data within your ERP system and translate it into reports, visualizations and similar user facing formats that let individuals act on the data.
In simplest terms, BI saves users from having to sift through large quantities of information to find out what is relevant by automatically presenting them with what is most important.
Where BI fits in construction
BI enables stakeholders within an organization to quickly access the information they need to inform decision-making in real time. Going back to our hypothetical site manager, that user could leverage BI to:
- Create a custom report for vendor shipment records and prices to identify which vendor is best suited to provide replacements and pin down the timeline for the day. This can be done in minutes, combining data from across the business.
- Chart the average cost of supplies to determine if local hardware stores or similar sources could provide a cost-efficient alternative.
- View big-picture financial details on how the business is performing to identify whether the organization can afford delays, possible overtime work or rush shipment of replacement parts.
With “embedded” BI at her fingertips, the site manager can go beyond making an estimate on the optimal decision based on experience and use real-world data to make the best choice relative to the specific set of circumstances in play at a given moment.
While these benefits are powerful in the field, they’re also extremely beneficial at the home office, where leaders can quickly ascertain business performance, monitor potential impacts to profitability across all projects and perform similar analyses in real time. CMiC makes these capabilities particularly powerful by embedding our BI capabilities into our ERP platform, creating a unified system that provides complete and timely visibility into a full range of actionable insights.
The CMiC BI advantage
Most BI solutions exist as specialized software systems that are designed to integrate with your back end databases and pull data at intervals. In many cases, this leads to limited functionality in terms of both the types of information the BI system can gather and the frequency with which it can do so. CMiC overcomes these limitations by embedding our BI solution into our ERP and field operations platform, allowing for seamless and complete access to real-time data across the enterprise. This results in a variety of benefits, including:
- Greater adoption and usage of BI capabilities because users don’t have to jump between their ERP and a separate BI tool — BI exists within the ERP.
- Simpler — and more effective — automation because the ERP can trigger automatic processes when the BI system identifies prescribed data conditions.
- Better decision-making as BI is built into existing workflows, allowing users to make better- informed choices.
Choosing an ERP with embedding BI takes away the chaos of decisions made based on anecdotal evidence and creates a structured process in which choices stem from real data and established best practices. CMiC makes this possible by making BI “pervasive” — it builds data analytics into everyday processes, ensuring users get the insights they need, where they need them, and when those insights can have the greatest impact on decision-making. It’s a whole new way of thinking about — and using — business intelligence … and it’s only available from CMiC.
What happens in your organization when a site manager runs into an unexpected condition that wasn’t accounted for in the plan? Perhaps the schematics for existing piping were wrong and the site manager is now contending with an old sewer line where the crew is digging for the foundation. Does your team have the tools needed to quickly communicate the project change, assess options for adjustments and make a decision before work gets too far off schedule? If you’re like most organizations and lack a dedicated construction ERP, you probably don’t.
We’ve been exploring the signs indicating that builders need to make an ERP upgrade, and the example we just discussed highlights our theme for part four in the series: What happens when your existing construction project management systems can’t offer you complete visibility?
Unpacking Visibility Problems in Action
Let’s look back at the scenario we presented in the introduction. When finding unexpected piping at the job site, builders will generally have to complete a few processes before moving forward:
- Double check site surveys to identify if there was a misinterpretation during planning.
- Connect with the relevant land managers or municipal officials to identify if they know anything about the piping.
- Perform tests to identify what the pipes are actually being used for, assuming there isn’t a clear answer during the first two steps.
- Analyze blueprints and project plans to see if there’s a simple work-around.
- Connect with other project stakeholders to identify and enact the next steps based on this background work.
All of these tasks require communication with some combination of internal and external project stakeholders. When you’re dealing with either paper-based records or isolated digital designs, you then have to send materials back and forth and move between locations based on where information is stored. Creating a central database for project information can minimize the paperwork that goes into solving this type of problem.
According to Construction Executive, the complex nature of construction projects creates an environment where easy data access and sharing is critical. A shared data environment allows those involved in an initiative to update components of the system and have that data automatically be passed on across the team.
For example, the news source explained that architects and engineers creating 3D models of a building can upload these schematics into a central database, allowing site and project managers to easily access that data in the field. This gives the people involved in putting plans into action all of the background materials that went into the project.
Centralizing information throughout the project simplifies collaboration and ensures everybody involved can easily assess performance and status updates, the report explained. This type of visibility is critical in construction project management, and ERP systems can make it possible.
How ERP Platforms Create Transparency
In its simplest form, an ERP setup will take information that is owned by different parts of the business and make it accessible through a single connected database. This is done without creating excess complexity, because those separate solutions operate as dedicated modules within the platform.
For example, the CMiC ERP solution features a suite of ‘native’ field applications that enable a variety of key functions that site and project managers need when away from the office. These include:
- Change management tools to ensure information accuracy and make it easier to manage schedules and costs as projects go through disruption.
- Site management systems that let users enter key information in real time, giving executives immediate visibility into what is happening in the field.
- Vendor relationship management capabilities that integrate details on subcontractor activities to stabilize the project environment.
- Communication tools that track updates and notifications from stakeholders across the team.
This represents a few of the key capabilities in our field management platform, but they highlight the ways an ERP solution can drive visibility. Managers in the field use these tools to connect to the office and vice versa. CMiC also offers connectivity through a full mobile-enabled suite, taking convenience and connectivity to another level. If your ERP can’t give you the visibility you need, contact us and we can offer more details on how our solution can help. If you’re still not quite sure it’s time for an upgrade, then be on the lookout for the final part of the series, where we’ll discuss the issue of ineffective change management.
A few years ago, I found myself tasked with leading a complex project with a clear, 15-month plan of action. After only six months, the project was running behind schedule. The main reason: I didn’t have good visibility into how much work was being done outside of the formal meetings. The project ended up a success, but it took more than two years and a complete restructuring of the original processes.
Construction projects are often the same—you set a strong foundation for the effort, but communication gaps along the way cause delays and cost overruns. Poor visibility into operations is often a major culprit in why projects fail to meet budgets and timeframes. There are two bits of good news. First, technology that helps you manage projects better is more accessible—and affordable—than ever. Second, the entire construction industry is grappling with the same challenge.
The Construction Sector’s Great Project Management Dilemma
Any number of hiccups can derail a project: Customers can change their minds on the design, key contractors can get sick and push off work streams on the critical path, weather can slow early outdoor work. These headaches are normal; what makes a difference is a construction firm’s ability to learn about the changes, understand the full set of repercussions, and adapt their approach to maintain forward momentum.
KPMG International found that recent innovation in construction has been exciting, but has also fallen short of its potential. The industry has generally gotten better at operating more efficiently and improving risk management.
Even so, just 25 percent of people responding to the KPMG survey said they think the construction industry has reached acceptable standards for completing projects on time and on budget. Projects that fail to meet timeframe and cost expectations are still way too frequent.
KPMG’s advice boiled down to three ideas:
- Take a fresh look at how you govern projects and adjust to changes.
- Make time to develop a quality staff at all levels of the organization.
- Create a plan to use digital technologies to bring together operations.
This guidance puts the idea of visibility into perspective. Governance creates clear expectations. Well-trained workers are more likely to communicate effectively. Digital technologies make it easier to ensure that all stakeholders are on the same page—all the time. Making these adjustments in isolation isn’t enough, KPMG explained. All three are required to create a cohesive, high performance operation.
If you want better visibility into your projects, you need to re-think how you work. Here are five tips to help you do just that:
- Make Communication Easy
Don’t force workers in the field to jump through hoops to update somebody in the office. Use a central ERP system as a dedicated hub so everybody can access key information in real time, simplifying construction management.
- Automate Tedious Work
Sending out new vendor requests, confirming invoices or checking on shipping can all distract your leaders from more important project management tasks. Automating these processes through ERP-based updates and notifications saves time and cuts down on stress.
- Enforce Compliance Automatically
Imagine you set a lumber budget for a building add-on, but prices change. Now you have multiple workers making phone calls to a bunch of stakeholders just to get approval for what amounts to a minor change. With an ERP system, you can set boundaries for spending that allow for a degree of variance, and when you do need to approve something manually, you get a notification and related information in one place.
- Create and Communicate Customer Expectations
People change their minds. They take too long to make important decisions. This uncertainty is normal in construction, so plan for it. Set clear deadlines internally and with customers. Discuss the consequences of missing those deadlines realistically; don’t scare your customers, just make sure they know what a delay will mean. Then, ensure that all of your stakeholders understand the situation and any changes that arise.
- Leverage Digital Technologies
Asking a vendor for a replacement component because a shipment arrives damaged can be a nightmare when you have to manually take a photo and upload it through multiple systems. If your worker can snap a picture with a smartphone, upload the image directly to your ERP software and send it to the vendor, it’s fast and simple. Let technology make your life easier.
Now you may be thinking, “Sure, this sounds great, but I don’t want to deal with a big ‘horizontal’ ERP solution.” That’s what we at CMiC think, too. We’re not alone. CIO magazine reported that mainstream ERP systems might not be a fit for many industries because most of those solutions fail to support specific use cases and process types. The CMiC platform—designed from the bottom up for construction firms—supports the unique workflows, assets and data that you deal with every day.
When I ran a two-year project, I learned that the greatest barrier was understanding what the team was doing at any given time. I wish I could have easily gotten updates and checked in with stakeholders on an ongoing basis. If you want the kind of visibility that can transform your ability to deliver projects profitably every time, contact CMiC today.