How to Leverage Construction Schedule Analytics to Improve Communication and Profitability
Part II: Construction Analytics: The Critical Step on the Path to Operational Maturity. (See Part I of this two-part series: “The Construction Project Productivity Mandate”)
Data and construction analytics have begun to play an essential role in many industries over the last several decades. The construction industry is no exception. With chronic schedule delays and ballooning budgets, it’s safe to say that the industry is in crisis. 98% of construction projects incur cost overruns or schedule delays. Shrinking profit margins, chronic waste, and inefficiency, plus high customer expectations mean that many construction firms are struggling to find their footing in this challenging industry. In fact, many startup construction companies fail in their first four years of business because of these challenges.
Against this backdrop, project management software and real-time data analytics have become critical tools for construction companies of all types, ranging from small residential companies to big commercial corporations. Knowledge is power, they say—and this adage especially rings true for today’s construction foreman, project managers, or company owners.
But construction analytics are not just becoming essential tools; they’re poised to revolutionize the construction industry. According to McKinsey and Company, a global consulting firm, “By enabling E&C companies to leverage the vast amounts of data they already collect, analytics can uncover critical insights that both speed up and improve the quality of management decisions.” Improving the quality of decision-making is an important step in the journey toward “operations maturity.” In their recent global research, “Future-Ready Performance,” Accenture Consulting concludes that while only 7% of industries currently achieve the highest level of operational maturity—“future-ready”—those organizations that do achieve future-ready performance enjoy “50% productivity and efficiency gains” that lead to a “2.8x boost in profitability”:
"Achieving the highest level of maturity possible means some organizations become “future-ready.” These leaders benefit from greater productivity and efficiency today. They also gain the agility and resilience to keep generating greater overall business value. "
While the path to becoming future-ready isn’t necessarily linear, construction firms can use specific tactics to accelerate their journey. Firms that commit to data-driven decision-making and leverage robust, high-quality data via analytics have the potential to leapfrog into operational maturity. Accenture’s research reveals that more than half of all organizations that had reached future-ready performance were all using analytics at scale.
Contractors experience 50x ROI from construction schedule analytics.
Learn more in our “ROI Guide"
Likewise, builders that increasingly leverage construction analytics to interpret the multiplying complexities in today’s construction projects will reap similar rewards. When it comes to the vast amount of data firms already collect, there is no better data source than the project schedule itself. The construction schedule is the single source of truth (SSOT) of any construction project—the source of data that everyone working on a project agrees is the real, trusted number for operating data.
Accordingly, the construction schedule data not only holds the answer to many questions those in construction management must answer, but also includes diverse data streams that facilitate a 360-degree view of a project's health. How much should this project cost? What needs to be done to ensure a successful project completion? How long will it take? Which materials need to be ordered? How many employees or subs will be needed to complete the work? Although these are just a few of the important questions every Director of Project Controls needs to ask, what they really reflect are key decisions a firm must make to ensure every project is a successful one.
Gaining visibility into critical project schedule data can help construction companies streamline processes, cut waste, save money, and increase profit margins. More importantly, construction schedule analytics that provide this critical visibility will enable better business decisions across a project lifespan, resulting in better project outcomes and planning in the future. In short, adoption and mastery of construction schedule analytics may very well be the first milestone construction firms complete to leapfrog into operational maturity, experiencing an almost 3x profitability boost from future-ready performance.
If you're a construction firm thinking about integrating construction schedule analytics into your project management workflow, for the remainder of this post we provide everything you need to get started: a brief definition of construction analytics and a list of the benefits firms can expect to receive when they begin to adopt and use construction analytics for better project outcomes.
Construction Analytics 101
Construction analytics software brings together information that helps construction managers, owners, and consultants make smart choices on their construction projects.
Major construction projects usually have a 5-10 year timeline, making it difficult to accurately assess the true scope of a project and the kind of complexities that will reduce construction productivity and lead to delays and disputes. In fact, the sheer amount of information that a firm may require to create an accurate bid for a major project is overwhelming—and it's even more of a challenge to analyze that data in a way that produces actionable insights that will result in profitable outcomes. In a climate where contractors are blind to the true scope of their project and drowning in a sea of unmanageable data, it's even more difficult once the work actually begins for contractors to keep their schedule on track and their projects out of the red. This is where construction analytics software comes in.
What Is Construction Analytics Software?
Construction analytics is the process and tools used to collect, analyze, and monitor relevant data to optimize project outcomes. Construction analytics software is designed to gather and analyze the most important information for any construction project. The software then organizes this information in a way that allows project managers and others overseeing construction management to gain the visibility they need to make smart decisions.
Why Is Construction Analytics Software Important in Construction?
At its core, construction analytics software can help the industry produce less waste, make better use of resources, and operate more efficiently. In this way, construction analytics will play a huge role in driving the digital transformation necessary to move the construction industry to operational maturity as a whole.
What Are the Benefits of Construction Schedule Analytics Software?
The benefits of construction project analytics software are numerous:
- Improves jobsite productivity—Contractors naturally learn from their previous experiences, but the right software allows project managers in construction to more deeply analyze previous experiences to make smarter choices on future jobsites. Construction schedule analytics allows contractors to answer questions such as, How long will this project reasonably take? Which workers must be scheduled to work on this project in order to move it forward? and so on.
- Reduces or eliminates time-consuming manual processes—Project analytics software automates processes to help builders reduce time running reports and other tedious, manual processes.
- Enables complete, up-to-date data—The best schedule analytics software keeps builders up-to-date with the most timely, accurate data available, providing not only 360-degree visibility, but also serving as a single source of truth.
- Boosts efficiency—Many construction professionals are skilled in their trade, not in data analytics. Construction schedule analytics software quickly and easily analyzes data and generates insights contractors need to manage their projects from start to finish. With schedule analytics, you can optimize your project schedule effortlessly for better project delivery.
- Ensures more accurate schedules—Contractors rely on project analytics software to accurately produce information quickly—far more quickly than most project managers would be able to do on their own.
- Keeps schedules on track—Delays, which are far too common in the construction industry, are often the result of poor planning. Construction analytics can prevent this problem.
- Mitigates risk—Project analytics helps contractors avoid risk and lost profits through proper planning by proactively identifying issues pertaining to schedule and materials before they become a problem. The right software also allows contractors to course-correct early in the process, to ensure a smooth construction experience from start to finish.
- Prevents claims and disputes—Claims and disputes occur when a project falls behind schedule. Good schedule analytics software can stop problems before they happen.
- Saves money and increases profitability—With best-in-class analytics tools that streamline operations and eliminate overhead, SmartPM analytics helps construction professionals save time and money, increase revenue, and grow their business--protecting margins while increasing overall profitability
Good for contractors, good for customers. Ultimately, construction firms are able to grow their business when they're using the right analytics software. Project analytics allows contractors to do their job more easily and efficiently, and that efficiency is passed down to clients as an added benefit.
Find the Right Analytics Software for Your Company
Whether you're a new builder just learning to schedule and manage projects, or you represent a seasoned construction business, now is the time to embrace construction analytics software and make the leap toward operational maturity and future-ready performance.
SmartPM offers the best construction schedule analytics software for enterprise and mid-market construction firms. Our Schedule Optimization Platform, which transforms construction data into objective, clear and accurate visuals, can be easily understood by any project manager and stakeholder, providing a 360-degree view of schedule health at a glance. Armed with actionable insights, builders can start making better decisions today to ensure better project outcomes tomorrow.
Why not take the first step toward reducing inefficiency by scheduling a free demo of SmartPM? When you start using an analytics platform that's intuitive, straightforward, and effective, you’ll be well on your way to operational maturity and all the rewards that come with it.