There’s no getting around it: It’s impossible to be a profitable construction firm without effective construction management.
If you’re new to the industry, you definitely can’t afford to be subpar at construction management: Construction companies that have been in business for less than a year fail at a rate of 36.8%.
But why is construction management important? First, we need to define the term.
What is construction management?
Construction management is a professional service that involves providing a project owner with management of all aspects of a construction project, from planning to scheduling to budgeting to execution.
A construction manager is responsible for the end product of a project and everything that leads up to it. There are many types of construction software that can help with management, offering features such as accounting, materials management, and document management, to name just a few.
5 consequences of construction mismanagement
1. You’ll go over budget
You’re in the business to make money, so budget is always going to be first and foremost in your mind. If you’re not doing an effective job of construction management, the first place you’re going to notice it is in the pocketbook.
Effective construction management must include good budgeting. That means planning in advance by mapping out exactly what materials you should have on hand, how many man-hours you need to employ, what subcontractors you’ll need to pitch in, and so forth.
The following video breaks down all the stakeholders in a construction project—without a construction manager keeping tabs of all these domains, you cannot expect your project to complete within budget:
2. You’ll run into delays
It’s not good enough to know exactly how much, say, roofing material you need to buy. If you order those materials too late in the project timeline, your workers won’t have materials to work with when they reach that phase of the project. That means delays as they wait around for the materials to arrive since they can’t start on the next phase until they complete this phase.
And that, of course, means lost profits as you pay more for man-hours and expenses creep up.
Brian Mooney, the general manager at Turner Construction Cincinnati, likens construction management to “an orchestra that we try to conduct.” And this analogy is an apt one: By employing effective construction management, you can tie deliveries to certain dates and make sure labor, materials, and equipment are all working hand-in-hand to make sure your project delivers on time.
3. Your equipment will break down
Equipment needs attention, too. You can’t just ignore the needs of a backhoe and expect it to still work for you. If you aren’t effectively managing a construction project, you may fail to allocate enough time for your workers to maintain a vital piece of equipment, or—worse—you may fail to train them on maintenance at all, leaving you up a creek as soon as your equipment breaks down.
Equipment can cost you big time, and not only in terms of opportunity cost when you aren’t able to complete work due to malfunction. It can also cost you in terms of how much you spend on the equipment itself. Equipment that isn’t properly maintained will break down more frequently and need to be replaced soon. Some machines can cost in the tens of thousands of dollars, and that kind of unexpected expense can quickly wipe out your profit margins.
4. You may run afoul of regulations
Whether you’re talking about the Occupational Health and Safety Administration or just local building regulations, the construction industry has to navigate all sorts of red tape to legally construct a building. If you are just winging it on a project, you may put yourself in jeopardy of having your project shut down or leave yourself vulnerable to lawsuits that could destroy your company.
A good construction manager should have all their ducks in a row on the job site. A construction management software tool with a document management feature can help you keep all required documents in order, so that you can show any inspector who comes sniffing around.
5. You’ll have major communications issues
Communication is absolutely essential on a construction site. You have many moving parts, in domains ranging from labor, to materials, to equipment. Unless everyone involved is talking to one another, you’re asking for a disaster.
For example, if you tell one worker to start putting up drywall in a section and then tell a plumbing contractor to start installing pipes in the same area, you’re going to have problems. At that point, you will have to tell one of them to sit on their hands until the other finishes work, costing you precious time and money.
Good communication is vital for safety, too. If you have heavy equipment working in an area, you need to communicate that to other workers in the area so they can know to avoid it for the time being.
Learn more about construction management
We have a plethora of resources for construction managers new to the industry to start learning about their trade. Whether you want to understand more about the discipline of construction management, the skilled labor shortage, or just how to manage subcontractors, we’ve got you covered.
Here are a few articles to get started:
But as a construction manager, you’ll find you won’t get far without the right construction management software at your business. Check out our Buyers Guide and then reach out to our team of advisors for a free consultation on the best software for your business needs.