The Importance of Construction Project Management

  • Home » The Importance of Construction Project Management

    • Table of Contents

    It’s an understatement to say that construction projects are complex. Each project involves many different stakeholders, all with varying interests and input. There’s also an assortment of equipment, materials and other resources to account for, a budget to maintain and deadlines to meet.

    Finishing a project on time is nearly impossible without someone responsible for ensuring all these moving parts fit together seamlessly. That’s why construction project management is so crucial to keeping your company alive — and why implementing a quality construction management system is key to increasing your company’s competitiveness and profitability.

    What Is Construction Project Management?

    Construction project management is a professional management service that encompasses every aspect of a construction project, from planning to completion. It differs from other types of management in that it’s mission-based rather than ongoing. Once the project ends, so does the service.

    Most companies hire a certified project management professional to perform this service — specifically, one with a thorough understanding of the construction industry and the building process. The project manager typically works closely with other stakeholders, such as project sponsors and general contractors, throughout the project to ensure everything moves according to the construction schedule.

    Project managers are responsible for more than ensuring a high-quality result. They also need to coordinate every phase of a construction project, enabling them to:

    • Keep projects on track
    • Effectively manage resources
    • Facilitate clear communication
    • Save time and money
    • Improve work quality
    • Enable informed business decisions

    Effective project management is critical to the success of every construction project.

    Why Is Construction Project Management Valuable?

    Construction management ties together every aspect of a construction project, from the initial bid to the final inspection and project execution.

    Construction project management systems are essential for carrying out the following responsibilities.

    • Project planning: Construction project managers map out what must happen in each project phase, including milestones, deadlines and progress metrics.
    • Project budgeting: Construction project managers incorporate cost estimates into their project plans from the beginning to account for every possible expense and keep costs low.
    • Time management: Running over schedule affects your profit margins, which is why efficient time management is one of the most critical elements of construction project management.
    • Quality control: Any construction project aims to deliver a high-quality structure that meets client expectations and complies with the relevant quality and safety standards. Construction project managers establish quality guidelines at the start of the project to provide crews with achievable goals and metrics.
    • Site safety: Construction sites that lack established safety rules and guidelines can be dangerous. Project managers actively minimize risk by creating efficient reporting systems and building positive safety culture on job sites.
    • Resource management: Many resources go into construction projects, including raw materials, equipment, expertise and experience. Project managers need to determine what resources the crew needs and how to allocate those resources to optimize progress.

    If you don’t have effective construction project management, you risk inflated costs, extended timelines and poor-quality work. When you have a qualified project manager on your team, you’ll eliminate these with a proper risk management plan and improve your company’s competitiveness and agility.

    What Happens Without Proper Construction Project Management?

    Without an expert construction manager and an efficient management system on your team, you’re likely to run into problems right away. The following are some of the most common results of project mismanagement.

    Poor Communication

    When vital information gets lost in bureaucratic red tape, you lose valuable time and money, compromising your project Project managers establish appropriate communication channels between various stakeholders — by streamlining communication within the company, project managers can ensure messages reach the right people quickly.

    For example, if an engineer modifies the architectural design, they need to tell the subcontractor about the change. However, if there’s no direct way for teams to update each other, the subcontractor might receive the message too late, and you might have to pay for rework later.

    Unplanned Expenses

    Cost management is essential to good project management — without it, you’ll almost surely go over budget. For example, building rework causes about 52% of total cost growth incurred in construction and engineering projects. Here’s how project managers can proactively budget for potential problems.

    1. Planning: Project managers begin the planning phase by mapping out all the resources needed to complete a project, including raw materials, labor hours, subcontractors and equipment.
    2. Research and analysis: They then refer to historical data from similar projects to understand potential expenses they need to account for. They may also tap into other industry professionals for feedback.
    3. Baselining: Once they know what to look for, project managers will create a budget that provides just enough space to account for unexpected changes and surprise expenses while maintaining a sufficient profit margin.
    4. Re-baselining: Throughout the project, they’ll adjust this baseline budget to reflect the progress you’ve made and the funds you have left.

    Project Delays

    Poor coordination and unclear communication can lead to unplanned downtime, which can partially or entirely halt your project and drive up costs. For example, if you don’t plan which machines you need to perform specific tasks, you might end up in a situation where you can’t progress until you buy or rent equipment. Meanwhile, costs continue creeping up as everyone waits for construction phase to resume.

    Construction managers connect all the moving parts of a project to ensure everything gets done on time. From figuring out optimal delivery timing to planning work around weather forecasts, construction project managers are necessary for staying on track and within your budget.

    Equipment Failure

    When your equipment malfunctions, your site can shut down for hours or even days. In addition to delaying work progress, unexpected downtime drives up operating costs.

    Failure to keep up with regular preventive maintenance is one of the primary causes of unplanned downtime. The larger your fleet, the higher your risk of equipment failure. Project managers can account for this risk early on by incorporating a daily preventive maintenance routine into the project schedule.

    Scheduling time for employees to receive proper training for the equipment they will be operating is another proactive step project managers can take to prevent unexpected breakdowns. When operators thoroughly understand their machinery and operational best practices, they can avoid misusing their machines and reduce unnecessary wear.

    Regulation Violations

    Mismanaged construction projects risk being shut down or incurring damaging lawsuits. Professional construction project managers ensure compliance with all the relevant regulations.

    Staying organized is essential for maintaining compliance with local and national safety regulations. Implementing a digital construction management solution with document management features can help you consolidate and organize critical documents, such as:

    • Contracts, bids and other agreements
    • Structural designs and specifications
    • Equipment maintenance reports
    • Safety reports
    • Work schedules
    • Insurance documents
    • Workers’ compensation waivers

    With one centralized location for storing all your paperwork, you can quickly access essential documents and share them with inspectors when they visit your site, which is critical for maintaining compliance with safety regulations.

    The Benefits of Effective Construction Project Management

    When you have a qualified project manager supervising your project and an effective system in place to make their job more efficient, you can complete more projects on time and grow your business. Other benefits of construction project management can include the following.

    Reduced Costs

    Staying within your budget is critical for your company’s long-term viability. Good project management keeps costs low at every stage of a project.

    By accounting for potential issues such as budget limitations, supply chain disruptions and unrealistic client expectations ahead of time, project managers can prevent surprise expenses.

    Streamlined Internal Communication

    Project managers ensure teams and individuals involved with the project have the right communication channels available to them and that they know which channels they need to use for each type of message they have to send.

    Your project manager would designate specific channels for each stakeholder to message the other parties involved in the project. These channels might include cloud-based technologies like internal direct messaging platforms, which enable fast communication when you need to send urgent information.

    Higher Work Quality

    Project management aims to produce excellent results that meet client expectations and adhere to all relevant quality and safety standards. Many project managers use quality management systems — organizational frameworks that outline policies and procedures related to work quality — to guide their work.

    By establishing guidelines, progress milestones and phase deadlines at the beginning of each project, construction project managers incorporate quality control into the construction process itself.

    Project managers can also refer to historical project data and apply lessons learned to continuously improve their project quality. A digital project management system that provides easy access to data and powerful analytics capabilities is helpful for project managers because it allows them to quickly understand their data and gain valuable insights into what worked and what didn’t.

    Improved Business Resilience

    When construction companies fail, it’s usually because they lack the proper budget controls and strategic preparedness to resolve issues when they arise. Crew training, thorough planning and establishing backup plans are all key to building a more viable business.

    That’s why proper project management improves your business’ resilience — your company’s ability to quickly adapt to unexpected changes. When you have an effective project management strategy in place, you can maintain high productivity levels even when something goes wrong, better preparing your business to brave the challenges of the highly competitive construction industry.

    Fewer Delays

    Proper project management reduces delays and minimizes unexpected downtime by planning how to respond to the following situations.

    • Equipment breakdowns: While a thorough preventive maintenance plan can reduce unexpected breakdowns, malfunctions and other equipment issues can still cause downtime. Effective project management involves coming up with backup plans to get job sites back up and running just in case. For example, a project manager might designate an equipment rental company where you can quickly rent a temporary replacement at an affordable price.
    • Supply chain disruptions: Demand surges, staffing shortages and spending shifts can affect even resilient supply chains. Project managers can plan for potential disruptions by finding and rating multiple different suppliers for all the materials you need — if one is experiencing inventory issues, you can order from another supplier to ensure timely delivery.
    • Inclement weather: The weather is one of the most unpredictable factors that can impact your project. Adding buffer time to the project schedule can keep you on track even when on-site work is impossible. Construction project managers can also create backup plans to keep employees productive, which can keep the project moving.

    Safer Work Sites

    Construction project managers play an active role in creating safe job sites. They may draft site policies and guidelines for employees, or implement a safety management system to identify and mitigate risks. By visibly working to build a better job site, project managers also inspire employees to follow a positive safety culture.

    Building a positive safety culture is critical for improving job site safety. Project managers and company leadership can improve safety culture through team-building opportunities. The camaraderie between construction workers is essential for building mutual understanding and communication and improving site safety and adherence to critical safety guidelines. When you can count on your team members to prioritize your safety and theirs, you’re more likely to do the same.

    Digital construction project management systems are excellent tools for keeping projects on track and consolidating all your relevant information.

    PenguinData’s Construction Project Management Software

    Our construction project management software module helps construction companies easily manage large-scale projects. The cloud-based software provides project managers with real-time updates and leading-edge interactive reporting capabilities, so your company can increase business agility and stay competitive.

    PenguinData provides one centralized location for all your project information so you can access what you need when you need it. Consider these benefits.

    • User-friendly interface: Our web-based system is easy to use and works on any internet-connected device, in any location.
    • Resource tracking: Keep tabs on materials, labor and equipment at every phase of the project to ensure optimal resource allocation and keep costs low.
    • Automatic alerts: The software’s built-in alert system automatically notifies you of progress updates, purchase order status changes, work completion and more, enabling you to confidently keep track of your projects.
    • Paperless system: Go digital with PenguinData. Our fully electronic system allows you to save money on costs associated with paper filing systems, such as ink, paper, filing cabinets and printer parts.
    • Streamlined communication: Miscommunication or missed messages can lead to costly delays and rework. Our system enables seamless real-time messaging between field workers and office staff, keeping everyone on the same page and saving you valuable time and money.
    • Scalability: Our platform is cloud-based, so you can easily change your subscription whenever your needs change. So when your company grows, you can scale up to suit your new requirements — you’ll only ever pay for what you need.

    This module integrates seamlessly into our web-based workforce management system, further improving productivity and profitability throughout your company. Learn more about our application to see how.

    Efficiently Manage Your Construction Projects With PenguinData

    If you’re looking for a way to elevate your construction company to the next level, PenguinData is here for you. Professionals with real-world experience in the industries we serve designed our workforce management software, so you can rely on our expertise to help address your business’ unique challenges.

    Contact us today to schedule a free demonstration. One of our sales team members will get back to you with more information.