The Power of Project Controls

In the current construction landscape, project controls are increasingly vital to successful project management. It’s undeniable that the last couple of years have brought about a significant shift in our lives. This shift is characterized by an array of challenges, such as supply chain disruptions, recurring waves of a global pandemic, difficulties in securing skilled labor, and increasingly severe weather patterns. As most of us are aware, unexpected risks seem to plague the industry.

Nowadays, winning the bid for a multi-million or even billion-dollar project may result in a feeling of unease instead of feeling like the great victory that it should. That poses quite a problem, as it should still feel like a victory. But, how do you successfully deliver a beautifully built project on time, on budget, and still make a profit?

One solution, and quite frankly the best, is Strong Project Controls.

What are Project Controls?

Project controls are the data gathering, data management, and analytical processes used to predict, understand, and constructively influence the time and cost outcomes of a construction project or program through the communication of information in formats that assist effective management and decision-making. In other words, project controls are analytical processes and outputs that are used to understand and communicate project information.

While some believe that project controls live within a department, they don’t.  They are a mindset that should make up the fabric of a construction organization in effort to support overall project management.

The Construction Industry Institute helps emphasize that project control systems are an important part of the overall project management effort. They support the achievement of project objectives. In other words, project controls streamline efficiency by exposing and highlighting risk or mismanagement through the key metrics.

Therefore, project controls allow for performance measurement with planning metrics and checkpoints to ensure standards are met. Even though the seeing the benefits involves a relatively simple process, project controls continue to be underutilized in the construction industry.

The Challenge with Project Controls

It is very fair to state that, in commercial construction, project controls aren’t a top priority for a large percentage of construction companies.  For many, contingency budgets and padding the schedule are the extent of their “project controls.

I know this because I’ve analyzed thousands of commercial construction projects. Here are some important takeaways:

• <4% of General Contractors have a dedicated project controls team and/or process in place on their projects.
• The only companies investing in and embraced project controls reside in the upper half of the ENR’s top 400 CM firms.
• Many Commercial Construction Companies in the United States leverage project management tools. However, they do not invest much in any project control functions.
• The lack of project controls contributes to significant overruns, delays, and disputes.

This poses yet another unfortunate reality: the lack of project controls has a great effect on the global economy and the environment. According to McKinsey, the construction industry wastes $1.6 trillion dollars annually in overspending, usually resulting from project mismanagement, delays, and overruns.

Take a moment to imagine the potential of what almost two trillion dollars could have been spent on every year…

A Broken Record

If hearing “construction delays & overruns”  sounds like a broken record, it’s because it is. It’s what every technology claims to solve.  Project management systems, mobile apps, BIM, drones, and document control tech all claim to help eliminate delays and overruns.  But if the goal is to systematically optimize construction, project controls are the only real answer.

The reality is that delays and overruns have the ability to be negated wholly through analytics designed to support project controls. Project controls provide ample opportunity to fix these issues, but the answer is at the crossroads of “Project Controls” and “Technology.”

Project Controls Key Metrics

Any given construction project has a world of data behind it, which project controls help bring to light. As mentioned above, there are many different avenues to achieve an effective project control process, but here are five we believe to be most helpful in delivering the highest quality project:

• Schedule Quality- is an assessment of how well a schedule is built and whether or not best practices are incorporated.
• Earned Value Analysis (EVA)- measures a project’s cumulative progress at any given point. This serves as an early warning sign for potential progress challenges.
• Critical Path Delay and Recovery- tracks the number of days that have been delayed due to impacts on the critical path. Recovery entails the processes and changes made to overcome critical path delays.
• Compression- is a gauge of how much work is being fit into the remainder of the project duration and how that work compares to the plan.
• Forecasting- utilizes historical performance to predict future end dates of key milestones.

Project controls offer infinite possibilities to retake control of projects. The metrics above track actual insights by assessing activities required against budget or volume of material. But how do you begin using project controls as part of your daily practices? This is a tall order; definitely easier said than done.

Implementing Project Controls 

The easiest way to implement project controls to measure accurate project performance is with software. This way, all stakeholders quickly gain access to action items in ways they never have before. Imagine having an eye on subcontractor performance, risk, impacts, delays, inefficiencies, predictions, etc… The result?  Objective, fact-based decisions.

Furthermore, the metrics offered by automated project controls have a lot to offer the construction industry, such as:

• Reduce costs- using Key Performance Indicators (KPIs) reduces the overall cost of projects by allowing critical decisions to be made quickly.
• Increase Productivity– effectively manage team members by providing checks and balances on project activities.
• Higher visibility– project controls allow team members across the board to be up to date on the construction schedule.
• Mitigate Risk– implementing mitigation strategies allows risks to be avoided, accepted, reduced, or transferred.
• Improve Margins- by optimizing construction schedules properly, many projects are able to finish under budget by executing best planning and actual practices.

By using an automated process, like SmartPM’s project controls platform, more visibility into actual project processes becomes clear. Additionally, critical decisions concerning end dates and budgets have the accurate data to back them up.

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