The great balancing act and how to manage risk in a growing construction market
More construction companies fail in a growing market than during a recession. A growing market puts working capital under stress, can lead to companies taking on unfamiliar work and stretches labour resources, forcing companies to recruit additional staff. This can lead to a lack of standardisation, inconsistent techniques; it becomes difficult to ensure accuracy and can become difficult to manage the bid review process. Further, it can become difficult to hand successful bids over to the project team. There is a real risk of bidding the wrong price.
Combine these issues with the decentralised plethora of excel spreadsheets found in most construction companies and the risk increases significantly.
Managing risk in this market requires a “best of breed” estimating tool combined with a project management tool, able to import the successful bid and convert it into a budget. Expenditure is then tracked against the budget, ensuring costs are controlled and margins maintained. Integration of scheduling tools and the (ERP) accounting system with the project management tool, enables monitoring of current projects and comparison with previous ones, combined with the most efficient sharing of labour and equipment resources between projects.
At IPM, we believe projects are best managed with a single tool, which sits between your estimating and scheduling tools and your (ERP) accounting system. The tool should provide a basis for you to collaborate, manage documents, control costs, and manage field activities, HSE and equipment /resources. This approach, including the advantages of native integration to Microsoft Office 365, Power BI and SharePoint, optimises efficiency and enables the highest standard of real time financial reporting and planning required to meet the unique requirements of the construction industry. It also reduces costs and complexity, replacing 4 or 5 “standalone” tools, with a single project management tool.