As companies rev up their projects in capital intensive industries such as Engineering, Procurement and Construction (EPC), construction cost overruns, or unexpected cost increases due to an underestimation during the budgeting process, can lead to devastating impacts.
But, the vast majority of construction companies face overruns. In fact, nine out of ten projects experience cost overrun, and large projects take 20% longer to finish than expected and can be up to 80% over budget.
Luckily, turning to technology and investing in solutions such as concrete and construction equipment management systems can reduce costs and reign in your budget. In many cases, avoiding cost overruns comes down to better management, planning and communication.
Here are simple tips to avoid delays and overruns:
Ensure accuracy within the bidding process: Inaccurate estimates can put your company out of business. By utilizing a construction management software with powerful financial features such as predictive forecasting, you can accurately project costs for materials, labor, and equipment. Plan ahead for business with a system that utilizes AI insights to improve business intelligence in supply chain management.
Be realistic about project deadlines and costs with specialty contractors: There are so many moving parts involved in construction projects that effective communication goes a long way. While that means at the very basic level utilizing software that makes it easier to collaborate and communicate changes, that also means working closely with specialty contractors to outline goals and expectations and make sure everyone understands their roles. House agreements, contracts, agreements, invoices, and payments in one system so contractors can pull them up at anytime. When you utilize systems that feature task tracking and checklists, contractors know exactly what they need to complete the project.
Prepare for change orders: Change orders are inevitable. Document scope change with written documentation and automate your processes so that change orders go to the appropriate parties instantly. Being proactive and utilizing a software that can handle and route change orders ensures good project planning and digitizes the paper trail to avoid legal battles and disputes. Also, clearly define a change order to specify procedures and budget needed, should a change occur.
Eliminate administrative errors: There’s no need to cross reference data and numbers across various spreadsheets or rely on guesswork. When you integrate your equipment across a powerful ERP that streamlines data and automates the process, you reduce the risk of making human errors from manual data entry. Utilizing systems within a data-driven culture that integrate with a construction management software can help play the role of administrator and guarantees the accuracy of projects and deliveries.
Know what you have on hand: Efficiently order material quantities and gain greater control on equipment usage and equipment allocation. When your equipment management software or concrete management solution can track your material delivery or equipment based on in-use, idle or surplus statuses, you add efficiency to your decision-making in the field. Utilize a daily equipment usage log and run time logs on a periodic basis to track equipment usage hours and cross-reference with equipment maintenance due dates so you can manage your machinery and equipment across all of your construction projects. When you use cloud-based solutions, contractors also make notes about equipment or track usage directly from the field.