October 2023
by Karl Vantine, Chief Customer Officer at Contruent
Despite the unpredictable nature of capital project costs, your clients still expect their built assets to be completed within budget. And you’re tasked with the unenviable responsibility of controlling those costs.
This is where data can become your best friend.
Having a data-driven understanding of your projects is essential to inform real-time cost management — and construction dashboards are proving indispensable in providing this. These interactive digital interfaces can play a valuable role in empowering you with project insights you can use to manage costs more effectively.
We’re going to cover four ways dashboards do this:
- Monitoring project costs
- Reallocating budgets
- Tracking performance of spend
- Forecasting future costs based on performance
Monitoring Project Costs
What you can see, you can monitor; what you can monitor, you can manage. With cost being one of the main project success measures that too often runs askew of its planned outcome, there’s an imperative to view and track it in real time.
Dashboards provide a clear window into your costs. Behind the scenes, they’re continually consolidating raw cost data from multiple project teams, stakeholders and software systems into a single platform. They also capture earned value management (EVM) data, including cost performance index (CPI) and cost variance (CV), that show cost status, trends and deviations.
That data comes into view in the form of visual representations you choose — including S-curves, line graphs, bar charts and more — allowing you to visually identify, analyze and address cost-related issues and fluctuations. This visual context makes it easier to interpret the story the data is telling and gives you a more holistic understanding of cost performance. You also gain usable insights you can leverage for more confident, informed decision making that helps preserve the budget and better manage ongoing costs.
Reallocating Budgets
As a project evolves, regularly visiting your budgets can help ensure numbers and priorities align. Yet, you may face having to do some budget rearranging occasionally.
For example, has there been an economic downturn that could affect a project’s budget? Were budgets for any part of the project underestimated or overestimated? How is actual spending compared with budget allocation? Do adjustments need to be made in spending?
Monitoring real-time project data helps you know where and how to accommodate those on-the-go adjustments as necessary. With their centralized access to project cost and budget data, dashboard visualizations allow you and your stakeholder team to see how allocated budgets are faring. Using dashboards to support this collaborative approach helps ensure your company remains aligned on budget and agile in responding to changing project situations.
Tracking Performance of Spend
Let’s go back to those EVM metrics, in particular CPI. CPI provides objective evidence of how your spending is performing. When you turn to your dashboards to regularly monitor CPI’s behavior over time, you’ll notice whether expenditures are firmly within their planned limits, where shifts occur and when patterns emerge.
This is where you can use your dashboard as a cost-management planning tool. What historical spending trends is your dashboard presenting that can inform budgets? What insights is your dashboard showing about how current spending matches up with similar prior projects that can guide cost control decisions?
But what if you notice somewhat concerning changes in your CPI — are the charts or graphs indicating they’re gradual or sudden? Is the dashboard showing the start of any cost overrun? Now, your dashboard becomes a risk-mitigating tool. Dashboard alerts can be set for any time this metric veers beyond its normal operating range (CPI value is less than 1, indicating over budget) — a sign you need to look deeper. Was there an external cause, such as costs for critical materials suddenly spiking? Or was it an internal reason, like hiring extra labor headcount to meet a firm deadline, incurring unplanned hourly costs over a period of time? Tracking spending metrics gives you a heads-up so you have a head start on taking corrective action.
Forecasting Future Costs Based on Performance
Construction dashboards also take on another role as a predictive tool, a crystal ball of sorts. By leveraging past project data and EVM performance metrics, your dashboard can generate real-world-based forecasts that help you account for potential cost ebbs and flows and cost-related risks your project may encounter.
There’s no limit to the forecasts you can create within your dashboard. One of the most strategic is the what-if scenario, where you can explore away by adjusting specific variables, whether internal (scope changes, jobsite staffing) or external (weather, regulatory changes, resource costs), to predict their effect on project costs. The insights gained can improve your company’s ability to adapt to cost-impacting changes and risks.
Effective cost forecasting helps you anticipate and respond to the dynamic nature of construction, with all the internal and external influences that can impact your cost management efforts.
More Effective Cost Management with Dashboard Insights
Cost management is a must. And construction dashboards are the data-driven tools that can help you navigate through the fickle nature of capital project costs. By visually guiding you through monitoring costs, allocating budgets, tracking expenditures, and forecasting future expenses, they can provide understandable, actionable insights to help you confidently deliver on-budget assets to your clients.
Contruent dashboard technology has been helping capital project clients gain fast, accurate insights and can help you do the same. Find out more.