Let’s face it. Despite your tireless work creating and updating complex, thoughtful construction schedules, most projects still end in delay. Why does this keep happening? And more importantly, how do we fix this broken process? Do we fix it with CPM scheduling tools? Do we need to hire consultants every time a project appears to be at risk of ending in delay? Or is there a third option, one that involves using automated schedule analytics to avoid future delay? Let’s examine these three approaches, one at a time.
Option #1: CPM Scheduling Software
As a scheduler you are likely familiar with the way CPM Scheduling software transformed the construction industry. With scheduling software, a process that had once taken months could now be completed in days. In spite of these clear productivity gains, the industry in large part didn’t advance from a productivity standpoint. To put a finer point on it, a recent McKinsey report states that the construction industry “has an intractable productivity problem.” (FYI - I looked up what intractable meant and found out it means: hard to control or deal with). The report goes on to tout the way the manufacturing and retail industries “have transformed themselves and their productive performance” by embracing digital technologies. These two industries are hardly the poster children for technology adoption, but nonetheless, whatever they’re doing appears to be working! In fact, according to this report, they are leaps and bounds ahead of construction. Over the past ten years, more than 75% of construction companies have grown at a slower rate than the economies in which they work. And as further validation of what I have seen over the past 20 years in the industry, the report goes on to say that “many construction projects suffer from overruns in cost and time” regardless of whether the companies involved use CPM scheduling software or not.
This is because scheduling software was not designed to solve the issues that plague the construction industry. Scheduling software was designed to be a planning tool, one that speeds up the process of building and updating a schedule. It does not check for mistakes, errors, or bad logic. It does not analyze the data to make sure it’s reasonable from a construction standpoint. It simply assumes what is put into the system is accurate and achievable, always – and multiple businesses rely on these potentially infeasible, poorly constructed and sometimes completely unrealistic schedules. To top it all off, at the surface most people can’t tell the difference between a good schedule and a bad schedule.
You may be wondering why the companies making scheduling software don’t just add construction-specific analytics to help their users? Good question. My best answer is because they are not construction tech companies and therefore have not invested in the in-house expertise required to do this well. They have built horizontal products they can sell to as many industries as possible for as long as possible. Fixing the construction industry is simply not on their product road maps.
Option #2: Outside Consultants
Given that over 75% of construction projects end in delay or overruns, the inevitable path for most construction projects is one of finger-pointing, blaming, and ultimately, some form of dispute resolution. In fact, delay is considered so inevitable in the construction industry that most stakeholders have built-in contingency funds ear-marked for these inevitable delays. In many cases there are line items in the actual budget for consultants and lawyers – and we are talking about hundreds of thousands of dollars on a medium-sized commercial project. I know this, because for twenty years, construction companies and owners hired me on a regular basis to make sense of, correct, supplement and analyze project schedules to help them understand where things went wrong with their projects.
Working with consultants is a long, expensive and backward-looking road. It’s not a cost-effective way to run a business or sustain an industry and it lacks the forward-looking capabilities companies need to avoid delay in the future. You would think that with so many construction companies and owners finding themselves on this highly-trafficked road, there would be a willingness to try something different. You know what they say, “Insanity is doing the same thing over and over and expecting different results.” Yet here we are, still plagued with the same issues. Some experts attribute this industry-wide epidemic to things like planning fallacy, over-optimism, human driven biases, and fear. (Source: http://freakonomics.com/podcast/project-management/).
But optimism is human nature and you can’t blame human beings for being human. The fact is that starting a new project with an optimistic attitude is a good thing, but it must be paired with a sound risk management process. Blindly planning for best case scenarios and then hiring consultants to fix expensive, complicated messes when projects inevitably blow up is not a long-term solution. So, what other options do we have?
Option #3: Advance Schedule Analytics Technology designed for Construction
Given the industry statistics, I think we can all agree that there is a problem here. Scheduling programs don’t cut it and consultants are not a viable solution. I firmly believe that the only way out of this mess is for everyone to have the ability to analyze and understand their schedule data – like an expert consultant, but without being an expert. And technology designed for the unique challenges of the construction industry, is the only thing that will get us there. What is so unique about this industry? Four key things:
- The Pace – Construction is a fast-paced industry with a lot of moving parts, one that is constantly changing based on loads of activities occurring in tandem. This reality, if not managed effectively via the schedule, can cause a project budget and timeline to spiral out of control without anyone knowing.
- The Margins – With such thin margins in the construction industry, making a profit demands tight controls on time and budget. As a scheduler, you are being asked to do much more with less – this directly impacts schedule quality and feasibility.
- The People – Most people in Construction are optimistic by nature – which is a good thing, except in scheduling. On the contrary, schedulers need to have their eyes wide open from the start, considering a variety of possible scenarios, planning for every potential risk, and building schedules that reflect real progress and accurate forecasts. And they can’t give into the pressures of over optimism, and in some cases, manipulation.
- The Number of Stakeholders – Each construction project has many stakeholders, each one involved in thousands of critical and interrelated activities. At the same time, they have their own businesses to run outside of the project. Managing this reality is difficult and requires regular, dependable and transparent data analytics.
Welcome to Option #3
Five years ago, I started thinking about what a technology like this might look like, and what would be required for it to work well. I had a pretty good idea of what the output would need to be – after all, that is what I was hired to do manually for 15 years. Getting a computer to perform these functions was the tricky part. But we did it, and I couldn’t be prouder of our team. So, welcome to Option 3. We call it SmartPM™ and it sits on top of P6 and MS Project to analyze things like schedule quality, delay, risk and feasibility. It is designed for and usable by both non-schedulers and schedulers alike. Sounds pretty cool, right? Check out what some of our customers are saying about SmartPM™.