Construction Best Practices

3 Ways to Cut Construction Costs by Connecting Project Management Data


Construction project managers are fighting the good fight, a never-ending battle between rising materials costs and a worker shortage, on the narrow ledge of a 2%-3% profit margin.

Not all heroes wear capes. (Although a lot of them do climb tall buildings.)

Construction projects are bigger and more complex than they were ten, even five, years ago. This puts a great burden on project managers, who must make sure the project is completed on time and on budget, and with greater complexity every day.

You can’t change the weather, nor single-handedly lower costs or resolve the labor shortage. A lot of construction project delays are beyond your control.

But there are a few things construction project managers can control: systems and workflows. Whether you’re doing it manually or using project management software, these are the top three workflows where construction project managers can connect project data to save money…and save your profit margin.

1. Give Budget and Job Cost Control to PMs

To know if you’re over- or under-budget, project managers need to know how much they’re actually spending. That means good, regular communication with your accounting/ back-office team, for real-time project costs. Financial data is also very helpful historical information when you’re doing construction cash flow forecasting to create a more accurate budget for the next project.

Track labor, materials, equipment and supplies that contribute to the job costs of your project. When you connect project management with accounting, you can make sure committed job costs don’t balloon with materials waste, equipment misuse, or poor on-site contractor scheduling.

Your financial data is only as good as it is up-to-date. Project managers that have visibility into the financial health of their project have the advantage of a forward-looking view of potential issues, so you can plan strategically.

With accurate, up-to-date financial data, a successful project manager can orchestrate payments to balance billing and costs, and manage the s-curve.

2. Process Change Orders When They Happen

Many an over-budget project could have been saved, IF ONLY ALL THE CHANGE ORDERS HAD BEEN BILLED. (Looking at you, Batman.)

Change orders can win you back 10% to 20% on additional contract value, often the difference between a profitable project and running in the red.

Owner-directed changes are easier to track, but projects have many, many opportunities for change orders that are often missed. Whether it’s inspectors adding additional requirements after an on-site visit, oversights in the architectural drawings, or damages and rework by other subcontractors—if you aren’t billing for it, you’re paying for it.

A big part of cutting construction job costs means passing on extra costs that you didn’t incur. But there are other benefits to closely monitoring change orders: With good, holistic construction project documentation, you can ensure that change orders are more than just pocket change.

Change orders can be part of a construction growth strategy, if you’re able to scale the process. Good change management workflows provide clarity for why the changes were needed or requested, and even helps build trust with your clients.

Many an over-budget project could have been saved, IF ONLY ALL THE CHANGE ORDERS HAD BEEN BILLED. (Looking at you, Batman.)

3. Improve Collaboration with Document Control

Successfully manage your documents, and you successfully manage the job. 

That usually requires good communication and collaboration with all project stakeholders to ensure that all teams are working with the latest versions of documents—that includes contracts, manuals, plans, specifications, designs, change orders, punch lists, RFIs, and more—to avoid errors and costly rework (one of the biggest budget drains).

It can be challenging to stay on top of so many moving parts with communication alone, so more often construction project managers use technology to update digital documents, create alerts, and streamline workflows.

Good construction document control reduces on-project risk as well as claims.

If you’re tired of asking the back office for numbers and reporting, frustrated by unexpected costs discovered too late, and sick of putting the puzzle pieces together from different disconnected systems, take a look at ProjectSight.

Part of the Trimble Construction One platform, ProjectSight is a connected construction project management solution with the cost controls project managers need to help them stay on time and on budget, while growing your company’s bottom line. Learn more about ProjectSight.

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Charity Heller leads the Viewpoint content team. She is passionate about engaging new audiences and creating relationships through storytelling, data, strategy, and inclusion.