By Michael Pink CEO Construx Solutions Advisory Group
I am a construction consultant who is often hired to help companies in commercial construction understand why their respective projects are delayed and over budget. This type of analysis is typically performed later in the project lifecycle, as part of a closeout or dispute setting. The use of this analysis can vary, ranging from a project-level Change Order Request all the way to a litigation scenario working its way through the Court system. We, in the “Biz”, call this type of analysis a “Schedule Delay Analysis.”
Schedule Delay Analyses can be time-consuming and expensive, sometimes taking a team of consultants months or even years to produce depending on the complexity of the project/case. As a participant in this process, I have always been fascinated at how much money companies are willing to spend to figure out why they were delayed.
As I forensically reconstructed the history of a project one document and schedule update at a time, I cannot help but think, “Weren’t there people there the whole time that should have this history already recorded? If not, how were decisions being made with such limited knowledge?” That being said, I completely understand the company’s need to protect itself, defend itself, and educate itself on the history of the project, in an effort to make critical business decisions.
In reality, however, the forensic Schedule Delay Analysis is a “post-problem solution” and is done in an effort to recoup funds that were lost during the construction process. This does not solve the root of the problem that resulted in the significant overrun. In my experience, I’ve observed that most schedule delays and impacts, and their corresponding cost overruns, could have been significantly reduced, or outright avoided, had the stakeholders known the magnitude of the impact and corrected the issue in real time. It is common to see small problems snowball into big problems because they were either unknown, ignored, or glossed over because it was easier than having the difficult conversations and taking the intrusive steps needed to confront the issue. Nonetheless, under these conditions, time and money is still lost, never to be recovered again, rather argued about with ultimately one or more project stakeholders left holding the bag.
Why Do Construction Delays Continue to Occur?
In my opinion, claims consultants like me get hired to perform Schedule Delay Analyses because there is a flaw in the construction management process. Moreover, budget overruns and delays don’t occur simply because “that’s the way construction is.” These things can be avoided, if not for the procedural flaw. This procedural flaw typically renders a construction schedule unusable or irrelevant leaving Project leadership with a minimal understanding or control of a construction project’s schedule. Consequently, those leaders have a very limited understanding of the severity of project impacts, why they have occurred and how much they cost. So, the real question is – why does the culture in the construction industry allow for this blissful ignorance? I have some thoughts….
- Most construction projects are extremely resource constrained, particularly from the management side, leaving each person involved with a tremendous amount of responsibility and many hats to wear. Project managers, superintendents, and non-working foremen are scrambling to manage many processes simultaneously, while advancing the project AND responding to a myriad of issues as they arise. This makes it very hard for project management personnel to sit down and study performance, correct issues, update the schedule frequently, and understand and document impacts to the plan. These are the steps and exercises that are really required to mitigate, overcome, or outright avoid, delays and budget overruns.
- The situation is often exacerbated by project management being almost completely separated from the scheduling process. Let me repeat: The people who are actually experienced in construction and are ultimately responsible for the managing the successful construction of a project often remain completely separated from the scheduling process. This often leaves the responsibility to external or internal schedulers to prepare the project’s construction and resource plan. That’s a little backwards if you ask me.
- The “monthly” schedule update that is generally required by contract is just too long of a period for management to wait to know the status of the job – there are just way too many impacts going on every day for this to be effective. A construction site is a dynamic place and the schedule process should reflect that pace.
- The project management personnel who are managing the construction often do not have access to the schedule in its native form, nor do they know how to use the software that produces it. Rather they receive the schedule as a stack of papers or a giant PDF file that misses all of the logical data and metadata contained in the native file – thanks for those high license fees Primavera and Microsoft.
- I find schedules getting more and more complicated with more and more activities, making it nearly impossible to be effectively managed by anyone. I just saw a schedule the other day with 20,000 activities spread across 20+ intertwined ongoing schedules. What a nightmare. What is the point if no one in the field can even digest the schedule? It becomes an academic exercise at that point. I truly believe the construction schedule is the best tool out there to manage resources and project flow, and if effectively managed will result in optimization of time, resources and cost. If it is too difficult to comprehend or manage, it becomes a pointless effort.
- I wholeheartedly believe that people in construction do not understand the value of daily reports and the data they contain – by the way, this is the super-secret document that allows me to build an amazing as-built schedule that will tell me everything I need to know about the project, including impacts, delays and budget overruns.
I can go on and on, but instead, let’s talk about how we might be able to correct these issues. I have some thoughts on that too. But let’s first summarize the problem that I just described:
Construction Delays: Diagnosing the Industry-wide Problem
The root of the problem is that project managers do not have enough time to manage the schedule and study performance with all the other stuff they are responsible for. They certainly don’t have enough time to digest all the information in the daily reports either in order to make well informed decisions. That’s really all that consultants do when analyzing delay. In addition, it often doesn’t make financial sense for construction companies to throw bodies at this problem because it will completely deplete profit margins. As a result, schedulers parachute in once in a while to update the schedule, with minimal thought or input from project management. After a few months of this, the schedule becomes incorrect, unusable and irrelevant. After a couple more months, it will be time to discuss the infamous “re-baseline” of the schedule while an even more difficult discussion about extra time and money will likely ensue. Depending on how that conversation goes, consultants like me may get a call.
Now for my thoughts on the solution:
How to Keep Your Construction Project Timeline on Track
If we circle back to what I am often hired to do at the end of the construction project, which is to recreate the history of the project and study it, and we establish a process that constructs the “as-built” schedule in real time, the problem could probably be solved, right? Project managers would have a comfortable place to go to study information as it relates to impacts, delays, inefficiencies, budget overruns, interruption, etc. – in real time. That would be very helpful. But the challenge of finding the time for anyone to manage this process still exists, so we now have to think about automating this process. People are filling out daily reports, but those reports somehow need to be tied to the schedule to generate an as-built. Further, it will only be effective if this system is seen by all people involved on the construction side. So knowing all of that, how do we get the schedule and daily reports into a single place where Project Managers, Field Managers and Subcontractors can study it? I bet the internet would work, through some sort of schedule based dashboard and a place where all the daily reported data is organized, stored and actually utilized.
In the past I have thought that maybe someone should develop a program that loads the schedule online, thus allowing everyone to see it. Next, the program should allow field personnel to submit their daily reports directly into the schedule electronically, whereby updating the schedule automatically every day. Imagine that, an up-to-date schedule every single day allowing managers to pinpoint, address issues and manage the schedule in a minimal amount of time every day, while simultaneously enabling field management to know EXACTLY where the project schedule stands every day. Also, by inputting “daily reports” electronically, I know for certain the data could be stored, organized and analyzed automatically every day too – the way a consultant would do it! This data could definitely be used to produce meaningful performance metrics for Project Managers to review in real time. Now that would be pretty cool, right?
Anyway, I have thought about this so much that my company has already developed and launched this product – it’s called SmartPM and its simple, inexpensive and very effective. Check it out here: www.construxsolutions.com.