Enterprise Project Performance

When millions are on the line in a construction project, avoiding costly mistakes becomes priority number one. Bound by strict time parameters and financial constraints, you must account for every detail and contingency.

Construction project management helps you do just this, whether you’re erecting oil and gas refineries, building power plants, or working on state-of-the-art infrastructure. From planning and design, to resource management, budget allocation, and more, construction project management helps you keep the entire construction process efficient and on track.

Read on to discover how you can get started with construction management today.

What Is Construction Project Management?

Construction project management involves directing and organizing each part of the project life cycle, from ideation to completion. It’s a holistic practice with the goal of delivering projects on time and under budget. Construction project management is a complex discipline that requires addressing many important concerns, including cost control, scheduling, procurement, and risk assessment. Project managers interact with all team members involved in a construction project, from architects to owners to contractors.

Who’s Responsible for Construction Project Management?

Construction project management involves team members from financial planners and C-suite executives to contractors, engineers, on-the-ground crew members, and others. None are as critical to the process, however, as the project manager. The role of project manager may be filled by a contractor, an owner who handles projects in-house, or even a dedicated construction manager.

The project manager’s goal is to ensure the entire construction process goes smoothly and according to plan. They’re responsible for maintaining a tight schedule, staying within budget, allocating resources, avoiding scope creep, and ensuring quality. They assess risks in real time and keep stakeholders informed. By centralizing information and streamlining communication, the project manager enables efficient processes that otherwise wouldn’t be possible.

What are the 5 Stages of Construction Projects?

Understanding the five major stages of construction projects is a must for successfully managing them.

1. Planning and Development
Determining whether to pursue a project is the first and most important part of the construction process. Halting projects after they’ve begun is costly, and the further they progress, the greater the potential losses become. Feasibility studies, capital budgeting, pro-con lists, and extensive input from stakeholders are staples of this stage. You can use these practices, and others, to answer key questions about the project:

• Will it yield a positive ROI?
• Are the associated risks manageable?
• Does it fit into your company’s portfolio?

To answer these and other relevant questions, use a combination of insights from robust data analysis and feedback from the key stakeholders on your team. Analytics provides decision-makers with an objective perspective on the proposed project, while wide-ranging input from team members can help identify potential issues that might otherwise pass unnoticed.

2. Design
Once you’ve decided on a project, it’s time for the creative juices to start flowing. The design phase involves developing everything from the basic concept of the project to detailed blueprints that show the final design. Your design will evolve from initial sketches to finished drawings and specifications, but each iteration should meet the project’s requirements while keeping the timeline in mind and costs under control.

Once the design is finalized and approved, it’s time to move on to the preconstruction phase.

3. Preconstruction
Preconstruction involves creating a roadmap that will guide you through the construction process. It’s about building a game plan for the project that shows everyone what they need to do, when they need to do it, how they should accomplish it, and what it should cost. If all parties stick to the plan and execute their roles to perfection, they’ll deliver the project on time, to standard, and within budget.

Presconstruction involves a wide variety of critical tasks. Here are a few of the most important:

• Define and allocate resources.
• Set up mini-budgets.
• Create timelines and deadlines.
• Distribute tasks.
• Map out work and operations through work breakdown structures (WBS), organization breakdown structures (OBS), and other tools.

Risk assessment and contingency planning are also a major part of preconstruction. Things rarely go just as planned during a construction project — often due to factors outside your control — so project managers and stakeholders must prepare for things going awry. The more proactive you are, the less time, money, and resources you’ll lose trying to get back on track if and when hiccups occur.

4. Procurement
Procurement encompasses sourcing, purchasing, and transporting the materials and services you need to complete a project. Procurement and supply chain managers should provide input in the planning stages to keep unexpected cost overruns to a minimum during this stage. Even so, some volatility is inevitable, as prices are subject to shifts in the market. You should account for this risk to the extent possible through robust preconstruction planning.

There are benefits and drawbacks to sourcing materials from local, regional, or global markets. Local procurement may take less time, but it may come at a greater cost, while less expensive materials shipped over long distances may be more subject to delays and supply chain interruptions. Engage in thorough research so you can choose the right options to meet budgetary requirements and stay on schedule.

Choosing when to perform procurement is another major decision. Rather than completing procurement before the construction project begins, you can obtain the resources you need as the project progresses to meet evolving requirements. While this strategy provides additional flexibility, reduces holding costs, and preserves liquidity, it risks delayed shipments or shortages that may slow the entire project. It also exposes you to potential price increases. Whatever approach you choose, try to align purchase orders with your construction plan and have contingencies in place to preserve your budget and schedule as circumstances change.

5. Construction
You’ve made your plan, everyone knows what their jobs are, and you have the resources you need to get started. Now construction can commence. All your preparation and planning pays off in this stage, helping the construction process move along smoothly and finish successfully. Even the most thorough plans can’t anticipate every hiccup along the way, of course, so regular monitoring and evaluation of progress during this phase is vital for staying on course.

When you have to make adjustments due to new circumstances or goals, change management comes into play. Project managers must adapt as needed while remaining within the parameters of the project’s plan. Look for a change management solution that can help analyze the impact of changes and minimize their impact on the project.

Four Core Construction Project Management Processes

Now that you know the major stages of a construction project, let’s take a look at how construction management fits in. These construction management processes are the key to keeping a project running smoothly from start to finish.

1. Ideation and Research
Ideation is part of front-end loading (FEL), the planning and design portion of the project life cycle. It’s when every detail of a project is scrutinized by stakeholders to see if it aligns with your company’s current and future portfolio of projects. The proposed project must make sense in terms of ROI, applicable regulations, integration with existing projects, risk, and other factors.

During this process, ideas are refined into project proposals through rigorous research and data-driven analysis. Capital budgeting, feasibility studies, brainstorming, and financial breakdowns are just some of the practices involved at this phase. While considering the project, actively solicit input from as many team members as possible to ensure that it comprehensively aligns with your organization’s portfolio.

One of the primary goals of ideation is ensuring a steady stream of high value projects while keeping risk at a manageable level. A project that has the potential for a significant ROI but comes with major risks may not fit in with a portfolio of safe, stable investments. Even if it does, it will require greater attention and maintenance throughout the project life cycle.

2. Define and Plan the Project
Once you’ve settled on a project, it’s time to flesh out the details to prevent scope creep and keep your team aligned once the project begins. Important details that should be addressed at this stage include the project’s scope, a feasible timeline, required resources, a reasonable and accurate budget, and key performance indicators (KPIs). Inviting feedback from as many relevant team members as possible during this phase should again be a priority, together with determining what personnel the project will require.

3. Determine Roles
With the many parties involved in any construction project, you need to clearly define the role of each. This clarifies everyone’s responsibilities, enables you to hold team members accountable, and prevents confusion and delays. When all team members know their role in the project and how to accomplish their tasks, redundancies disappear and tasks don’t slip through the cracks.

4. Finalize and Execute Construction Plans
Before actual construction kicks off, project managers should meet with the appropriate stakeholders to review the plan and ensure everyone is on the same page. While there’s a good chance you’ll have to deal with unexpected difficulties and changes as the project progresses, failing to obtain explicit buy-in before construction begins all but guarantees that you’ll face additional challenges along the way.

Once construction begins, project managers must do everything they can to keep the process coordinated and efficient. This means rigorously measuring and tracking progress. Relevant and comprehensive KPIs updated in real time — which around 56% of project managers don’t have — provide invaluable insight into the performance and status of the project. Selecting the right KPIs is critical, as they provide a way to efficiently monitor the project at a glance and see if it’s going off track. With data on the current status of your budget, procurement, and other key aspects of the project, you can draw the insights you need to control costs and meet deadlines.

Handling Construction Project Management Challenges

Construction project management involves its share of challenges. Here are some of the most common and some tips on how to overcome them.

Communication and document management

Maintaining lines of communication between everyone on a construction project isn’t easy. And keeping an accessible, accurate repository of all project documents can be even more difficult. But the risks that come with poor communication and document management are too large to ignore.

From change orders to ongoing procurement, a miscommunication that delays just one critical process can bring the entire project to a halt, lead to cost overruns, or cause conflict between parties. Avoid the challenges of attempting to manage communication through email, chat, phone, and other channels with a software solution that centralizes information and communication in a single platform.

Together with facilitating frequent communication, project managers are responsible for document management. Contractors, insurance companies, owners, and other parties need a single source of truth they can rely on. You can start creating a winning document management process by examining your organization’s current document management system, centralizing existing documents, standardizing processes, and taking advantage of a document management solution with the features you need.

Estimating

The complexity and importance of estimating costs, necessary resources, and timeline in construction can’t be stressed enough. Even a minor error in estimation can lead to a loss on a project given the tight margins in the construction industry. A significant margin of error when estimating the cost of a large-scale project, like constructing a power plant, could even lead to the project being shut down midway, with a huge amount of sunk costs. While price fluctuations, currency drops, material shortages, and other factors can make estimation an inexact science at best, there are forecasting tools available to help you consider all these variables and make your estimates as accurate as possible.

Siloed data

When data is decentralized and hard to access, miscommunication runs rampant and projects rarely go according to plan. Data silos can affect cost control, the project’s timeline, risk assessment, and more. If your contractor is waiting on information that’s already available or decides to push through without it, you’re going to either face delays or be forced to cross your fingers and hope for the best.

To break down data silos, adopt a data management solution that makes centralizing and integrating relevant information easy. The best tools connect all your systems and let your team quickly access data no matter where it lives.

Lack of real-time data for risk assessment and change management

Sharing data across your team doesn’t matter if the information is out of date. Construction projects are, by their nature, works-in-progress, so you need real-time data to stay on top of new developments and address challenges as they arise. Again, the right software solution is the answer. The platform you choose should make diving into the data easy with up-to-date dashboards and reports while providing the tools you need to visualize workflows and see the impact of your decisions.

Make Construction Project Management Easy

Construction project management keeps teams aligned and leads to success. But trying to apply all the project management practices covered above on your own will only lead to frustration. You need the right software to start realizing the benefits of effective project management as soon as possible.

Construction project management solutions let you improve forecasting, centralize information, boost efficiency, and keep costs low. EcoSys offers a top-of-the-line enterprise project performance solution that helps you do that and much more. It takes the burden off your shoulders through an easy-to-use platform that mitigates risk, eliminates errors, and facilitates communication. To learn more about how EcoSys can make your next construction project a success, contact us today.