“Time and cost overruns are the norm, and overall earnings before interest and taxes (EBIT) are only around 5 percent despite the presence of significant risk in the industry.” -McKinsey
That’s not a lot of money in exchange for the risk construction companies assume.
Precon as we know it today needs to change. Because those who can manage risk successfully can grow and prosper in the construction industry. Standardizing the way we do precon through integration and utilizing cost history data will make the industry more profitable, as well as help us build better buildings.
The likelihood that risk is introduced is highest earlier in the life of the project. If a mistake isn’t caught in the preconstruction phase of a project, it can become a big issue in the field. When we catch mistakes later in the life of a project, the more that mistake costs, opening yourself up to legal issues and damage to your reputation.
There are four primary risks we need to manage in the construction industry:
- Cost
- Quality
- Time
- Safety
General contractors who don’t put in the effort to mitigate these risks run the chance of damaging their reputation, retaining good employees, and losing projects.
Specific to preconstruction, you take on risk through the duplication and manual entry of information, the time it takes to count and measure quantities and to search for information, the lack of standards, sequential activities, and silos of work. Treating every project like it is a one-off means you never learn from the past.
Deliverable-Centric
In preconstruction, there is the constant pressure of managing these risks. Precon teams tend to focus on deliverables only. Because of inefficient processes there isn’t any time left to devote to making decisions that would improve the quality of the project. Without an integrated estimating system, low value tasks like measuring, counting, copy and paste, manually moving information, and formatting reports, though vitally important, they don’t make buildings any better, like adding more classrooms in a school or more beds in a hospital.
One of the problems is that precon teams historically start a project with little to no information, like every single project is brand new because the multiple tools you use to complete an estimate don’t integrate. Using anywhere from 4-15 different tools that don’t integrate means that the data doesn’t flow naturally from one tool to the other. Any time we manually move data, we introduce risk. Stewart Carroll, Beck Technology President says, “We’re not really helping ourselves with trying to reduce the risks. We spend a lot of time measuring, counting, recounting, and remeasuring.”
So, how can we fix it?
By introducing integrated preconstruction and capturing and utilizing data.
Integrated preconstruction means implementing a single source of truth to complete our estimates. This:
- Minimizes the number of tools we use.
- Reduces manual data entry.
- Automates the hand-off from GMP to the field.
- Eliminates reformatting data.
- Gives you more time to spend on adding value to the project.
When we can capture data and benchmark at every major milestone, we can use that data to make better, more informed decisions which reduces the risk of time, cost, quality, and safety.
If you can manage risk, your company benefits greatly, and it begins with preconstruction. The goal of your preconstruction team is to minimize risk throughout the life of a project. The earlier you can catch risk, the less it costs you.
Estimators spend too much time collecting data from multiple locations, duplicating information, and creating multiple alliterations of an estimate. Unlike estimators that use DESTINI Estimator, teams without a single source of truth tend to focus on deliverables instead of high-value activities like data analysis. Manual manipulation of data and information and having to start from scratch on each new estimate leaves no time for cost history comparisons or understanding how to make the process more efficient.
When an integrated preconstruction tool is introduced, preconstruction teams can benchmark each phase of the project and:
- Minimize the number of tools we use.
- Reduce the amount of manual data entry throughout the design phase.
- Automate the hand-off from GMP to the field.
- Stop copying and pasting and reformatting data.
DESTINI Estimator gives estimators the time to, “Proactively find ways to either build the building more effectively or efficiently and spending more time with subs to understand how they build it right the first time, so they do not have to come back to the project to fix things,” says Stewart. In turn, contractors can become more profitable and deliver a better product.
Stewart discusses the four major risks in preconstruction—cost, quality, time, and safety—and how to solve them in the following webinar.
In this webinar, you will learn:
The risks in preconstruction:
- Duplication of information and manual entry of information
- Time taken to count and measure quantities.
- Time searching and finding information.
- Lack of standards
- Sequential activities
- Silos of work
- Every project is a one-off and we never learn from the past.
- Minimize the number of tools we use.
- Reduce the amount of manual data entry throughout the design phase.
- Automate the hand-off from GMP to the field.
- Stop copying and pasting and reformatting data.
If you are an estimator who works in multiple tools to complete an estimate, manually enters data, and has no set standards across offices, click the button below to learn how to estimate smarter today!
