Applying insights gained from your construction project data to fuel continuous improvement activities is a great strategic move that can boost the productivity of your business. But you need to be 100% confident in the accuracy of your data…
Common Data Challenges in the Construction Industry
The construction industry produces huge quantities of data every day. It’s a trend that’s set to continue, with ever-increasing demands for construction data capture and analysis.
The UK government has turned to legislation to address the urgent need for a ‘golden thread’ of building information, for example. And then there’s the growing requirement for detailed carbon data as part of net-zero initiatives. All of which add to the data provision burden.
That burden is compounded by poor construction data management and governance practices that can have a negative impact on productivity and profitability. Below we highlight three of the most common data challenges experienced in the construction industry.
Lack of visibility
In construction projects, there are multiple opportunities for information bottlenecks and silos that delay the input of data to the system.
The goods received note (GRN) that was temporarily ‘filed’ in the site foreman’s back pocket, then put through the weekly wash. The payment application that’s awaiting approval from the Commercial Director who’s on a beach in Tenerife. The manual call-off sheet for bricks. The expenses form that’s in the post. The electronic accident report form will be emailed to the head office at the end of the week.
In each of these examples, the data is temporarily hidden from view – in a back pocket, an in-tray, a site office, a postman’s bag or a laptop folder. This lack of visibility presents a major barrier to efficiency and accurate financial planning. It can result in companies paying for goods that don’t match up with the purchase order (PO), are damaged or haven’t arrived.
Broadly speaking, construction involves two types of costs. Hard costs include things like materials, labour, equipment and contractor fees. Soft cost examples include permits, professional fees (like engineering, design, consulting and legal), insurance and financing.
In theory, once you’ve gathered all your cost estimates, quoted the amounts to the client and won the business based on those figures, you’re good to go. But the reality is often very different. An ‘estimate’ is exactly that: an approximate cost, not a fixed amount. And as all construction companies know, variations can wreak havoc on even the best-laid plans.
For example, groundworkers may need to use more aggregate during wet autumn weather than would have been the case in a hot, dry summer. Poor-quality products may need to be replaced. Shortages of steel and copper have been causing serious delays on site. And budgets have been blown apart by the recent price hike in fuel and construction materials. Many construction companies that have issued fixed-price contracts are feeling the strain – and sadly a large number have already gone to the wall.
Variations are essential construction cost data, yet they are often overlooked. It’s fair to say that they are every project manager’s nightmare. Fail to keep track of them and there’s no way of knowing if you’re going to make a profit or not on completion.
Illegible, incomplete, incorrect and out-of-date documents
When forms are completed carefully and in full, they provide a rich seam of construction data on topics ranging from costs and quality to health and safety. However, forms that are filled in manually without due care and attention can be problematic. Rubbish in, rubbish out, as the saying goes…
Paper forms may get lost or damaged and some responses may be illegible or difficult to decipher. To get the data onto the system, all hand-written responses must be keyed in, which introduces the risk of human error.
On paper forms – or poorly structured electronic forms – requests for specific information may be ignored or overlooked, leading to gaps in the data being collected. Codes may be entered incorrectly, resulting in costs being allocated to the wrong job, for example. And users may describe products differently (eg ‘cement’, ‘bag of cement’ or ‘big bag’), resulting in bad data.
Tight version control is essential in construction project management. When multiple revisions of a document are in use by different parties (and each believes they have the latest revision), you’re playing with fire. Relying on an out-of-date construction drawing can end up costing millions in rework fees.
How to Improve Data Management in Your Construction Company
Provide a single source of truth
The benefits of good construction data management are irrefutable. To introduce it in your construction organisation, your starting point should be to create a secure, structured repository for all company information – everything from blueprints and cost estimates to timesheets and personnel files.
Your teams and stakeholders will always be confident that the data and documents they access on the system are the latest versions available. There’ll be no need to cut and paste figures from one spreadsheet to the next, and no risk of duplicating information.
It’s the only surefire way to provide a single source of truth that your teams and stakeholders can fully rely on.
Introduce robust data governance practices
Having set up a structured system to hold your data, you should establish clear data governance practices and make sure all your employees understand and apply them consistently.
Promote the value of construction collaboration and information sharing. Explain the drawbacks associated with silo working; the lost opportunities when spreadsheets are maintained outside the system; the time wasted on duplicating data that’s already in the system – with the risk of introducing keying errors; and the dangers of relying on out-of-date documents or manual reconciliations.
Change working practices so that all data is entered into the main system once only. Make sure that only the latest version of a document is available to users (but store previous versions securely so that they can be retrieved quickly if needed).
Set up automated workflows and approvals for items like expenses, timesheets, POs and subcontractor payments, to speed up delivery and prevent unnecessary delays. If an approver is out of the office, on leave or off sick, the task will be allocated automatically to their nominated stand-in. And if a subcontractor payment request exceeds an approver’s threshold, it will be redirected automatically to a more senior member of the Commercial team.
Define precisely the access levels for the many different layers of information within your system. Make selected data accessible securely from any location and at any time by users who have the appropriate authority. And set up regular, automatic back-ups in the cloud to prevent a catastrophic data loss.
Use digital tools to collect data
Technology and tools are now widely available to help you collect and store construction data digitally. They include automated processes that minimise risk, save time, reduce the need for rework and improve overall efficiency. Here are two examples.
- Optical character recognition (OCR) technology can dramatically reduce your manual keying requirements and improve accuracy.
It’s ideal for invoice automation. The system ‘reads’ the invoice, extracts the information (whether from a Word document, pdf or scan) and uses it to populate an on-screen form automatically. Typical details include the supplier address, company registration number, VAT number, date, invoice number and amount owed.
The more you use the automation functionality of invoicing software, the more the software recognises invoices from certain suppliers and the faster the overall process becomes. Once it ‘knows’ your supplier invoices, it will populate your on-screen form in under a second (far speedier than keying in the data manually). All you’ll need to do is give it a cursory glance before it goes off for approval.
- Mobile forms technology can dramatically boost the accuracy of your data. Choose a construction forms software that enables you to customise your forms, to suit your business needs. You might decide to model them on the original paper versions – their familiarity may encourage your teams to embrace your new, digital approach.
Incorporate mandatory fields, to prevent users from creating data gaps. Build-in dropdown boxes with options for users to select – this will standardise the data that’s collected and reduce the risk of keying errors.
Users can complete the forms on their mobile, laptop or tablet. The data is then uploaded to the system automatically and stored securely. If a user is on a remote site with no internet connection, the upload will happen automatically as soon as a connection becomes available. Both types of upload require no user effort.
Provide rapid access to robust information
Don’t make decisions based on last month’s data. Your teams need fast access to reliable construction management information, based on current data.
Choose a construction software with user-friendly dashboards that provide an invaluable, at-a-glance view of key metrics and early alerts on potential problems, such as costs exceeding the budget or an item of plant that’s due for off-hire.
Make sure your system allows you to create customised reports, to get the most out of your construction software data analytics. You’ll want to be able to run these at the touch of a button, whenever you need a real-time overview, whether that relates to an annual order of a particular stock item, subcontractor timesheets on a specific project or a quick heads-up on company performance.
Real-time visibility of all construction costs is vital, to inform your cost value reconciliation (CVR) process. Ideally, your chosen system should include integrated CVR functionality. Because if you’re relying on multiple spreadsheets pulled from different sources outside the system, you’re setting yourself up to fail. It’ll take forever to compile, by which time you’ll have no idea if the figures you’re using remain current.
All you really want to know is whether you’re making money or not. That’s the bottom line.
Set Your Construction Company Up For Success
A wise investment
Few would deny that digital transformation is necessary, long overdue and inevitable within the construction sector. The ability to access robust, timely information that’s trusted by all parties will be a critical enabler of this transformation.
There’s certainly a strong economic case for investing in a system that will enable you to unlock direct productivity gains and deliver built assets that combine quality and sustainability.
One of the most effective ways to achieve all the data-management improvements detailed in the previous section is to implement an enterprise resource planning (ERP) system.
Do your homework
Don’t go for an off-the-shelf, one-size-fits-all solution. Choose a management software that’s been designed specifically for the construction industry. A construction management software will save you time and money in the long run… and probably the short run too. There’s a bewildering away of systems, products and promises out there, so do your homework, take your time and make the right decision when investing in your construction organisation.
RedSky’s award-winning construction software is proven to improve data management across construction and contracting projects of all types and sizes. Our in-house developers are continuously introducing software innovations that enable our customers to make cumulative improvements to their construction processes.
Our unique functionality – including key features like Business Analytics, Invoice Automation, Workflows and Approvals, CVR, Payroll and Plant Management – can result in significant improvements in efficiency and overall performance.