Construction firms need to manage a wide array of risks to deliver projects successfully. There are inherent project risks introduced throughout the course of site work, such as safety issues, non-compliance, poor quality, delays, overruns, and miscommunication. With less than 36% of global developers being well prepared for the pandemic, technology is a critical solution that can help alleviate the determinantal effects of unforeseen risk.
Risk reduction is also vital within the budgeting and cost management sphere, as several projects experience overruns due to delays, quality issues, site work mismatching, and labour unavailability. Leading project management software platforms offer comprehensive budget preparation tools that can be used by project managers to capture all cost items with greater detail. These solutions can map any budget changes, approvals, inputs, and revisions, through their collaboration and workflow management tools as well.
Another important risk factor that can strain key aspects of managing a construction project successfully is scope change. Approved designs, submittals, and official documentation can go through varying levels of changes as projects progress through multiple stages. Manual methods of capturing change can introduce the risk of mismatching, miscommunication, and unaudited paper trail. The introduction of dynamic changes via verbal or non-automated methods can also be lost over time. Technology solutions offer a deep audit trail and data access rights to team members that can perform scope changes synchronously.
Understanding how to manage rising risk factors is one of the most important aspects of executing a construction project. Let us review the role of software and hardware solutions that can radically improve visibility while providing the right solutions for risk reduction.
Mitigating risk of cost overruns and budget mismanagement
One of the major benefits of adopting a project management software solution is better budgeting and cost control. This can be performed through dedicated estimating, BoQ, and cost identification tools that can fully optimize the planning stage for any construction project. In fact, BoQ tools have widely delivered satisfaction rates of around 89% in cases where they have been adopted to refine budgeting. These solutions provide highly detailed insights to managers enabling them to reduce the risk of lower profitability during the planning stage itself.
With overruns being a significant factor in introducing risk into construction projects, managers need the right tools to maintain daily cost control. Cost overruns risks also arise when expenditures are not managed closely on a regular basis. There are risks of mismanaged variable costs, disconnect between site work and proposals, as well as chances of rework caused due to delays. As all construction work is connected to a cost factor for every project, it is important to have a dedicated solution onboarded that can lower the risk of capital mismanagement.
Centralization of all risk factors, controls, and mitigation strategies
Technology plays a vital role in helping construction project managers understand the impact of various types of risk events. The best construction project management software platforms, such as Zepth and others, offer highly technical features to map all risk events via a centralized dashboard. These events can be analyzed during the planning stage and collaborated upon for the best strategies.
Technology solutions also allow for better tracking and monitoring of risk events, with multiple checkpoints, milestones, and mitigation strategies built-in. Managers can set the right risk targets and flag any events that may be extending beyond risk limitations. Various controls can be added, along with multiple team members integrated to ensure consistent follow-ups across key areas. Risks in critical processes, such as inspections, labour safety, equipment, and material quality, can be instantly detected and remediated when using a synchronous technology solution.
Additionally, construction firms can also automatically set risk reporting and heat mapping measures within a centralized software solution. This reduces the burden on multiple stakeholders having to individually report on potential risk items during various stages of execution. Managers can directly engage with the right parties via the project risk management solution and track mitigation plans during daily reporting.
Technology’s role in reducing site risk through better monitoring
With around 26% of global firms focusing on adopting workflow-based digital solutions, developers are eyeing the technological benefits of better site visibility. Ensuring that the right materials are delivered at the right time and the right equipment is being used by the right workers is a risk-based endeavour. The best project management software solutions offer site visibility and monitoring tools, with direct communication lines to all workers for the most updated insights at any time.
The use of technology is also expanding to autonomous drones, site robots, and hardware-based integrations as well. Of those enterprises that have adopted technology integrations, the satisfaction rates are significantly high. UAVs/drones implemented by nearly 33% of global firms have delivered satisfactory results for 76% of enterprises. Similarly, e-DMS document solutions have peaked at 92% satisfaction levels as well for several companies. Once companies take the right steps to improve site visibility through technology, they can experience the compounding benefits of digitization at scale.
Risk of low productivity levels addressed through technology
The industry is widely known to be hovering around the 1% annual growth mark in terms of productivity, being significantly behind other sectors within the global economy. Construction firms also experience significant delays of multiple years, which is a key problem that has been exasperated due to the ongoing COVID-19 pandemic. The critical risk of lower productivity can be addressed intelligently by adopting the right project management software solutions.
The leading solutions within the construction project management domain offer built-in solutions to improve workflow tracking, collaboration, transparency, and data access. These benefits accumulate to improve the productivity of all levels of employees working within a common project environment. Teams can easily access the right project insights, update their team leaders, and communicate with vendors, engineers, and contractors for expedited execution. With nearly 13% of a worker’s time being spent on finding the right data and information, centralization of insights can significantly boost productivity.
Productivity is also impacted by technology integrations in the form of people management software solutions. The leading project management platforms offer resource insights, labour management, and team mapping capabilities to improve scheduling, allocation, and resource locking. In fact, nearly 23% of global firms are focused on implementing a digital solution to optimize schedule analytics.
Overcoming procurement challenges via material manager tools
Managing the bidding and procurement process is time and resource-intensive, which is why several firms are opting for digitization as a solution to expedite the stage. Additionally, a critical role that technology plays within procurement optimization is reducing the risk inherent within the process. Vetting vendors, comparing bids, ensuring delivery, and inventory checking, are some of the major risk areas that project managers need to be mindful of when executing projects.
Digitization is the way ahead for several enterprises, with close to 21% of them investing in a procurement management solution. These solutions are designed to introduce scale-driven efficiencies, track material levels, and manage reissuances, indents, and allocation seamlessly. Project managers can also upload GRNs and supporting documents to connect offline and online activities for better risk reduction. While there are several challenges to overcome within procurement, project managers can tackle them through software solutions while minimizing material acquisition risks.