Save Millions: Why Actionable Data is Crucial for Project Success
How you predict and prevent rather than react and repair.
👋 Welcome to The Influential Project Manager, a weekly newsletter covering the essentials of successful project leadership.
Today’s Overview:
Your data, and how you manage it, can make or break your project's success. It might be the unseen inefficiency eroding your margins and timeline.
The Problem: 96% of data in engineering and construction remains unused. Many professionals spend over 10 hours a week chasing information across different systems. Another 10 hours are often wasted on administrative tasks like data entry. This leaves less time for meaningful, value-driven work.
The Solution: By methodically tracking and optimizing specific data points, we can make predictive decisions, leading to more successful outcomes.
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📊 Save Millions: Why Actionable Data is Crucial for Project Success
An observation from having the privilege of spending time with some incredible project leaders:
The most successful leaders aren't the smartest people in their organizations.
What sets them apart is their exceptional ability to:
Aggregate vast amounts of data,
Simplify this data, and
Communicate it in a compelling narrative.
In other words, they masterfully transform raw data into a clear, actionable story.
If you can build that storytelling skill, you'll always be valuable. And in this article, I want to shed light on a significant, often overlooked area of inefficiency in our industry and how refining your data management skills can save millions.
Construction Project Management is far from a straightforward profession. Think about it: we’re tasked with transforming mere blueprints and a raw piece of land and then coordinate all of the materials, manpower, and equipment necessary to guarantee a set price, schedule, and quality of the project - without any accidents or errors, regardless of weather conditions, acts of God, or any other unforeseen conditions!
The complexity is astounding. Yet, in our ever-evolving business the traditional methods are falling short. Many projects are succumbing to miscommunication, delays, and significant financial setbacks.
So my message I wish to convey is straightforward yet profound: your data, and how you manage it, can make or break your project's success.
It might be the unseen inefficiency eroding your margins and timeline. So, let's dive deeper and discover how we can transform this challenge into a game-changing opportunity.
The Problem
Ever heard the saying, “numbers don’t lie”?
Brace yourself for some eye-opening industry statistics:
Project Failures & Delays:
70% of projects don't deliver as promised due to cost overruns or scheduling issues (TeamStage).
On average, projects run 70 days late compared to original estimates. (Procore/IDC)
64% of projects face delays, and 54% suffer from miscommunication. (Quickbase)
Budget Concerns:
75% of project owners exceed their planned budgets. (Procore/IDC)
40% cite cost as a reason for not adopting more digital documentation and processes. (Dodge/Trimble)
Data Utilization & Wastage:
96% of data in engineering and construction remains unused. (FMI/Autodesk)
By 2025, most employees will optimize their work using data. (Quantum Black AI by McKinsey)
Digital Adoption & Outcomes:
66% of owners believe digital workflows enhance decision-making. (Dodge/Trimble)
Yet, over 2/3 of owner-operators still struggle with project outcomes despite using digital systems. (Accenture)
Access to Relevant Data:
40% of owners emphasize the need for timely relevant data to improve stakeholder connectedness. (Dodge/Trimble)
Impact on Productivity & Cost:
Wasted Time and Efforts: Many professionals spend over 10 hours a week chasing information across different systems. Another 10 hours are often wasted on administrative tasks like data entry. This leaves less time for meaningful, value-driving work.
Gray Work: When systems don’t sync, teams resort to manual workarounds, known as 'gray work'. This includes using offline tools like Excel sheets, leading to inconsistencies and inefficiencies.
The High Cost of Misinformation: Time spent searching for information can cost a 1,000-person organization $2.5 million annually. On a global scale, this amounts to billions of dollars wasted. (Quickbase)
Project Delays and Miscommunication: 64% of projects face delays, and 54% suffer from miscommunication. This not only affects the project timeline but also impacts the overall profitability and reputation of the organization. (Quickbase)
The Solution
Construction is a prime target for these issues — subcontractor management, scheduling and billing create windows for error on large-scale projects.
Such data mismanagement can lead to hefty financial losses. So, how do we tackle this challenge?
Systematically monitoring and optimizing specific “KPIs” can steer us towards predictive decisions and successful outcomes.
A KPI is short for a key performance indicator, a measurable and quantifiable metric used to track progress towards a specific goal or objective. KPIs help teams identify strengths and weaknesses, make data-driven decisions, and optimize performance.
For instance, here are a few KPIs you can benefit from focusing on:
Construction Administration:
RFI’s | Average Days Open: Measures the average duration an RFI remains unresolved. By monitoring this, one can gauge efficiency and strive to minimize the response time, ensuring swift project progression.
RFI’s per Square Foot (SF) of Construction: Offers insight into the complexity or challenges of a construction project by comparing the size of the project to the number of queries raised.
Submittals | Average Days Open: This checks the average number of days in the Submittals lifecycle from open to close.
Open vs. Closed Risks and Issues: Tracks the number of unresolved versus resolved risks and issues.
Inspections | Submitted vs. Pass/Failed: Regularly tracking the ratio of passed to failed inspections gives an indication of the quality of work being done. A high fail rate could signal issues with workmanship, materials, or supervision.
Critical Path Adherence:
Critical Path Activities Started/Finished on Time | Keep a close eye on the activities most crucial to the project timeline. Track and prioritize the constraints that might hinder these activities.
Percent Planned Complete (PPC):
Integral to the Last Planner System, PPC assesses the dependability of project scheduling. By contrasting tasks completed versus those planned, teams can determine project adherence.
Calculation: (Tasks Completed / Tasks Planned for Completion) x 100%. This metric paints a vivid picture of project efficiency and highlights potential areas of improvement.
Resource Management:
Labor Productivity: Measures work completed per labor hour.
Resource Allocation and Utilization: Ensures the efficient use of resources, including manpower, machinery, and materials.
Overtime Hours: Evaluates workload and efficiency.
Safety Exposure:
Total Hours vs Recordables/First Aids/Near Miss: By comparing incidents against total hours worked, one can derive a rate that serves as a benchmark. This allows comparisons across projects or with industry standards to see if the site is safer or riskier than others.
Number of Safety Inspections Completed: Ensures the construction site remains safe and aligns with regulations.
Budget Monitoring:
Change Orders per SF of Construction: Indicates the number of alterations relative to the project's size. It's a hint towards project complexity or change management efficiency.
Change Reasons: Understanding the primary reasons behind change orders can guide future planning and preemptively tackle similar challenges.
Budget vs. Schedule: Analyzing if the billing aligns with the project's progress can signal financial health. Discrepancies can indicate potential future cash flow issues.
Cash Flow: Regularly monitoring cash flow ensures that the project has the necessary funds to progress without hitches.
There are literally hundreds of KPIs available, but these examples highlight the impact of data in enabling more autonomous and proactive management.
While the importance of each KPI can vary depending on the project's nature, goals, and stakeholders, regularly monitoring a combination of these indicators can provide a comprehensive view of the project's direction.
The right technology, like PROJEXION, packages these metrics into an intuitive dashboard, offering a bird’s eye view of your project health.
It’s like having your own digital executive, always at your service.
Final Takeaways
The challenges of dynamic work are real, but they also present a unique opportunity. PM’s & organizations that can effectively manage dynamic work stand to gain a competitive edge.
Leverage your data correctly and maximize meaningful, value-driven work.
Remember, the most successful project managers are great because they have the ability to transform raw data into a clear, actionable story. One that leads to the desired outcome.
The key lies in centralizing processes and KPIs, eliminating gray work, and ensuring that teams have access to accurate, real-time information.
By focusing on data accuracy and centralizing processes, project managers can predict risks, make informed decisions, and ensure the success of their projects.
Bring your processes and people together, and let your systems work for you, not against you.
Until next week,
Kyle Nitchen
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