February 2024
by Ryan Craaybeek, Solutions Consultant Director
Managing and containing costs is the cornerstone of any successful capital project. Yet, the construction industry is being held back by using computer-based spreadsheet programs long relied on as the go-to cost management option.
These familiar programs cannot provide the accuracy needed to control evolving cost data effectively. Nor can they process the volumes of data that modern capital projects generate — especially now that drones, robotics, BIM/digital twins and sensors contribute more of it in real time. A 2021 Autodesk-FMI study revealed that project data volume doubled over the prior three years; it’s likely to have continued to increase since then.
It has created an unfortunate reality: despite the abundance of data, a good chunk of it ends up being outdated, inaccurate, inconsistent and/or inaccessible. That means many construction executives and managers are unable to capitalize on it or maximize its benefits.
The Need for Sophisticated Cost Control Technology
This points to the need for technology that can do more with all that project cost data. This need becomes more apparent when we consider the limitations attributed to data challenges.
For one, these limitations hinder the ability to plan effectively. From the beginning, cost estimates based on poor or compromised data contribute to everything from unintentionally high or low bids and unrealistic budgets to project delays and cost overruns. The resulting inaccuracies are baked into the data, putting ongoing cost control efforts at a distinct disadvantage.
This directly affects forecasting. Being unable to accurately predict and plan for the cost impact of anticipated and emerging risk factors, contingency plans, and proposed and required changes can stymie proactive financial planning or lead to possible contractual disputes.
Moreover, it’s virtually impossible to gain usable insights. Relying on unreliable data puts any analysis on shaky ground, decreasing confidence in cost control decisions. Those decisions are more likely to be made based on judgment calls and guesstimating — a slippery slope to missed project outcomes.
Add to all this the pressure to complete projects on time and on budget while meeting strict reporting and delivery requirements.
Addressing these pain points is imperative.
Advanced cost control technology is gradually finding its way into construction companies eager to dramatically improve the data accuracy their plans, forecasts and decisions depend on, and gain more control over project cost-related processes.
Transforming Cost Management for More Accuracy and Control
Control starts with data centralization. The larger and more complicated projects are, the more critical it is to consolidate all data into one platform. Projects of that scale can’t risk losing valuable resources chasing down details scattered across numerous spreadsheets and disparate systems. A single hub to upload, store and view real-time data eliminates this hunt and is the first step toward gaining control over evolving costs.
Access also becomes easier when using a single data repository. However, with permission-based viewing and editing, regulating who can see what ensures the right team members and stakeholders can monitor costs and follow the impact of changes and risks as they happen. Now they’re better able to collaborate on controlling costs within their purview.
Together, centralization and access vastly improve data accuracy. With a single point of data entry for everyone, inputting data once makes it available in real time to other functions and calculations within the platform — doing away with data re-entry redundancy across spreadsheets and dramatically reducing manual errors that could go undetected.
This enhanced accuracy empowers construction leaders. Dynamic data updates instill confidence in data accuracy because they reflect the evolving reality of project progress, performance and changes. Having this as-it-happens understanding fuels critical decisions and forecasts with previously unattainable accuracy.
Real-time access to accurate cost-related information also delivers the agility stakeholders need to manage costs more strategically. For example, by analyzing up-to-the-minute data, they can optimize resources across their portfolio by reallocating them to meet changing project needs. Stakeholders can also rely on that information to address risks, revealing potential and existing cost threats that would be otherwise tucked away in disconnected, scattered project data. Seeing early indications of developing risks reflected in the data serves as a warning sign, allowing stakeholders to take proactive measures to control their effect on project costs better.
That control extends to managing cost-related workflows. Consider RFI, change order and payment application processes that involve multiple teams and are traditionally manual, so they’re often at risk of input error or human-caused delays. Automating these processes increases accuracy by standardizing and accelerating reviews and approvals, free from human errors. When workflows are more accurate, project cost and schedule outcomes are more likely to be achieved.
To get more use out of project cost data, it needs the freedom to move about within a cost management solution and with other systems in the broader construction technology ecosystem. An advanced cost control solution should seamlessly integrate with other systems that feed into and consume that data. From an administrative perspective, it amps up accuracy by replacing redundant tasks like error-prone manual data entry. From an operational perspective, integration delivers a comprehensive view of projects and their data. So, a solution that can connect with a scheduling platform, a risk management solution and contract software, for example, ensures data can flow where it needs to go for more accurate reporting and cash flow tracking.
Getting the Most Out of Project Cost Data
Having a purpose-built cost management solution designed specifically for the construction industry is making a difference. It’s become a must-have for mega projects that require a higher level of accuracy and cost control than traditional spreadsheet programs cannot achieve.
Contruent offers a sophisticated cost control solution that helps construction companies get the most value and use out of their data for more successful projects. Learn more about Contruent today or request a demo.