The effect of inefficient processes and profits in construction

[edit] Introduction

In construction, a sure fire way of throwing hard-earned cash away is through bad processes and inefficiency. They are the main reasons companies experience poor productivity, missed deadlines, higher costs, and ultimately reduced profits. It has become such a major issue that research states that a staggering 98% of large-scale construction projects go over budget and experience delays.

Manual data entry, poor communication, and missing information fall within a wide range of inefficiencies that are rife throughout construction and make a huge impact on the bottom line. And the longer a bad process continues, the more it costs a company.

Thankfully, the emergence of user-friendly construction enterprise resource planning (ERP) software signalled a breakthrough in the construction industry, so the inefficiencies and bad processes that plagued an outdated sector are fast becoming a thing of the past. Construction ERP software enables companies to automate workflow, improve project management, and streamline day-to-day tasks that once upon a time would gobble up resources and chip away at profit margins.

A project manager’s worst nightmare is when working days are lost because teams have failed to communicate properly. Unavoidable errors of this nature not only hinder everyone on the job, but inevitably result in expensive downtime and cost money to fix. A simple way to improve communication and collect and share real-time data is with ERP software, so that inefficiencies and bad processes are avoided or overcome.

[edit] Common inefficiencies

Some of the most common inefficiencies in the construction industry include:

[edit] Poor Communication

Clear communication lines are essential for the smooth running of any construction project. Poor communication leads to on-site confusion, project uncertainty, and a general lack of understanding among workers. Ultimately, this all adds up to work delays, missed deadlines, and profit losses which no construction company can afford to absorb.

[edit] Weak Planning

A construction project involves a multitude of moving parts from general contractors and suppliers to designers and inspectors. Getting everyone to smoothly align and on time using just email and phone can be a monumental challenge. One simple scheduling glitch can quickly escalate into huge, costly problems such as when a materials delivery is late arriving, and a team of sub-contractors is prevented from working.

[edit] Aversion to Technology

Before the arrival of ERP software and other cloud-based resources, the construction industry was synonymous with its unwillingness to adopt new technology. While other industries embraced digital automation, construction remained stuck in the past, in a world where paper, pen, and hand-drawn plans remained the go-to tools of project managers.

Luckily, construction has undergone dramatic modernisation in recent times, with technology delivering better processes, communication, and information streams so that projects are delivered on time and for maximum profit.

[edit] Solutions

Digital tools such as fully integrated construction ERP software are supporting the industry in several ways, including:

[edit] Smart automation

The biggest problem with manual tasks is they are prone to human error. By automating the most mundane tasks, construction teams can focus on delivering a project on time and in the most efficient way. Even day-to-day tasks such as time sheets and payroll can be streamlined and automated with construction software so that teams can focus their attention on developing creative solutions to problems that may arise. It is estimated that 75% of companies that leverage workflow automation believe it gives them a competitive advantage over those that don’t.

[edit] Enhanced reporting

With construction ERP software, companies can gain a clear picture of their past practices and gain a better understanding of the way they work. Automatically updated reports including budgets and job costings help companies track projects more accurately, identify areas for improvement, and allow companies to forecast their futures more accurately and reduce risk.

[edit] Real-time data

Construction companies are using real-time data to improve communication between operational, commercial, financial, and on-site teams. Utilising cloud-based software speeds up processes and makes real-time data instantly accessible at any time and on any device. It ensures everyone on the project is always working with the same data and that all teams are aligned. As a result, the days when a call to the site office would go unanswered or an important email would take days for a response are over, and companies can work quicker, smarter, and more efficiently.

There was a time when doubling up on tasks, taking too long to finish a project, and paying too much to get something done would take a significant chunk out of a company’s wallet. However, construction ERP software has helped eradicate these clunky processes by changing the way the industry works through improved efficiency and communication. With greater visibility across all teams and immediate access to real-time data, construction companies can look forward to a boost in productivity and bigger profit margins.

This article was issued via press release from mrs digital as "REVEALED: The Cost of Inefficiency: How Bad Processes Are Draining Profits in Construction" dated February 13, 2024.

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