Many of the world’s largest and most demanding mega-construction projects are managed through inefficient and inaccurate manual processes and outdated systems, contributing to cost overruns and significant delays.
That’s the conclusion of the June 2022 report on software for the construction and engineering industry released by global financial services firm Raymond James.
The report found that the construction industry has been slow to digitize, lagging behind most other industries in its embrace of automated processes and adoption of software that enables data sharing across the many disciplines and vendors involved in any project.
Continually over budget, consistently behind schedule
This reluctance to modernize has some very costly consequences:
- 98 percent of projects incur cost overruns or meaningful delays
- an 80 percent average increase as percent of originally planned project expense
- 20 months’ average slippage behind the original project timeline
The Raymond James report underscored what everyone in the industry understands all too well: coordination and collaboration are sadly lacking in the engineering and construction business. And they become increasingly difficult to achieve as a project grows exponentially more complex.
The unique challenges of mega-construction projects
Building a single-family home, and then twelve more just like it on a suburban cul-de-sac, is a very different prospect than building an island shaped like the world in Dubai, or a rail system underneath London.
These vastly larger engineering projects involve much greater complexity, with many orders of magnitude more suppliers, design contracts and moving pieces.
And while there may be a management tool for each of the many industry disciplines (the Raymond James report lists project management, accounting/ERP, BIM, bid management/CRM, contract/ document management, project tracking and progress reporting, among others), it is a significant challenge to ensure that each of these many tools can talk to each other, share data and facilitate collaboration.
“The construction industry is massively inefficient and is one of the few industries to experience diminishing productivity in recent years.” – Raymond James
The multimillion-dollar traffic jam
If they cannot, the result can be just like a traffic jam, where one lane on a highway is blocked and vehicles are backed up for miles. One small issue (e.g., an improperly shared change order) triggers a domino effect: it slows something else down and puts three other things behind schedule, which in turn impacts six other things.
You start incurring costs for work that hasn’t been started yet, or you have people idled on the job site charging you while they wait. You miss what you’re supposed to get done this week and it rolls into next week, when a new workload comes in, and it keeps piling up on the same resources.
Once a project is launched, you face the possibility of one of these traffic jams every hour of every day.
Fueling collaboration and data-driven decision making
Which is exactly why you need project controls software that helps you:
- Optimize project spend and performance
- Account for change and maximize efficiency
- Improve visibility to make informed decisions
- Manage contracts and contractor activity
The Raymond James report found that 35 percent of construction project management working hours are spent looking for project data or on conflict resolution, mistakes, or rework.
What if your teams were able to spend that time collaborating effectively and making decisions based on accurate, timely data?
You’d be able to avoid those costly traffic jams.
Your projects would finish much closer to the budget and timelines you originally estimated.
You’d gain a significant advantage over your competition.
Want to learn more? Talk to one of our professionals.
Looking at the road ahead with Contruent
Interested in learning more about how to avoid costly traffic jams in your mega-projects? Watch our latest webinar that discusses the current state of the construction sector. Discover factors that are driving enhanced adoption of technology and bridging the gap of digitization that has been diminishing productivity in recent years.
Watch now.
