11 Ways the Cloud Manages, Modernizes Construction Costs

construction costs

Operating costs are a fact of life for construction business owners. And just as we begin to embrace one technology for managing construction costs, another technology becomes more viable. Cloud capabilities for managing construction costs have many advantages.

  1. Application integration – You go one place for one piece of data but somewhere else for another piece of information. APIs (application program interfaces) pull it all together.
  2. Asset recovery – Automatic GPS tracking alerts you when equipment goes off-route or is stolen.
  3. Better bidding/budgeting – Cloud BIM (building information modeling) software integrates parts and materials data for more exact/accurate estimates.
  4. Data organization – Most of us have tons of data, all over the place. Using cloud management, you can sort, organize, timeline, and analyze data so your information is current and accurate.
  5. Digital communications – Project managers continue to print documents to take to the jobsite every day. And if the paperwork is misplaced, skilled employees are sent to the office for reprints. Not only will you better-manage time and resources, but you can also make data-driven decisions based on real-time information.
  6. Enhanced mobility – Of course your phone is a lifeline. But cloud services offer document and design storage, real-time collaboration across jobsites, and more.
  7. Materials tracking – Knowing exact inventories is a construction costs edge but even better is a service that predicts supply chain problems before they occur. You can order before competitors realize it’s too late.
  8. Pay-as-you-go – Autoscale your workload.
  9. Predictive maintenance – Cut down downtime by accurately monitoring machinery and equipment.
  10. Shorter project lifecycles – You’ll save time with cloud-based real-time information.
  11. Skilled worker time-tracking – Ensure your vital, skilled talent is maximizing time effectively, performing critical tasks.

The Construction Monitor blog is for information only. No software brand is recommended nor endorsed (except our own). We don’t sell software, but we’ve got the software you need. It sorts building permit and solar information into usable, actionable information specific to your needs. Contact Construction Monitor.

Construction Business Project Management: Cost Control

construction business project management

It’s critical to know how much a project will cost. Lately, that’s been more of a crapshoot than it should be, but construction business managers are finding innovative ways to guesstimate costs and when costs will hit the budget.

Time-Phased Budgets for Construction Business Projects

The challenges of cost-loaded schedules for construction business projects are real:

  • The goals aren’t necessarily shared commonalities.
    • Construction business manager wants to monitor costs
    • General contractor and sub-contractors want control over how costs are entered
    • Owner wants to stay within budget and on-time
  • The schedules may not adequately reflect the “real” expenses.
    • Pareto’s Rule: 80% of the outcome of any project is determined by 20 percent of its included elements…
  • The stakeholders may have different concepts of what a cost-loaded schedule is.
…The biggest problem is, (the) cost loaded schedule needs to match with accounting records. …The cost engineers must spend countless hours to find the difference; troubleshooting cost and hours when using cost loaded schedule method in the project. …Secondly, how do you communicate the schedule and who has the financial information when cost loaded schedule is used on the project?Rahul Shinde, Support Engineer

Even complicated time-phasing schedules are more flexible and transparent. “Because the nature of construction itself is time-phased, successful project teams plan for costs, revenues, escalation/risk windows, and key resources via their phases of timing,” says Rick Deans of technology solutions company InEight.

Getting project income and expenses to the finish line at the same time is the goal. Spreadsheet solutions present a myriad of problems, not the least which is, whose version reflects the most recent updates? Software solutions* can keep your project revenue and expenses in real-time.

Construction Monitor Software Generates Real-Time Leads

We update our data – your information – every week. It may be a cliché, but it rings true: When it comes to our building permit analysis, if you don’t use it you lose it (construction business opportunities).

Do you want to win more projects? You can, with the right information. Call 800.925.6085 (International/435.586.1205) or contact Construction Monitor.

*Construction Monitor does not recommend nor endorse any brand of construction business software (except our own).

Using up-to-Date Construction Cost Data

construction cost data

As we get older, it’s difficult to transition from some of the basic business principles and construction cost data we followed from other decades. They worked, time and again. Many of them aren’t working now. 

If you’re estimating costs using the same formula your company used in 2019, it’s just like assuming you can get a pumpkin-flavored coffee from a snow cone vendor in January for twenty-five cents. You’re using the wrong seasonal considerations and outdated pricing.

3 Reasons to Update Construction Cost Data

We wanted information fast and we got it. Now, we need to keep up with it or we’ll make costly mistakes. In a tight market, that’s exactly what we can’t afford.

Here are 3 reasons to upgrade your construction cost data:

1. If your construction cost data is out-of-date, your estimates will be off. Incremental changes are expected but they should be included in construction cost data sooner rather than later. When we ignore them, incremental changes can add up. The damage can be significant.

2. Inaccurate estimates based on out-of-date construction cost data leads to cost overruns. “Cost overruns can shut down a project altogether,” says construction technology company Gordian*. “From 2020-2021, 57% of construction material costs increased.” Multiply a material cost increase by the number of times you will order that material and you can see projects will realize lower profits.

3. Underestimating costs reduces your credibility. And that can negatively impact customer and contractor relationships. Accurate construction cost data is essential to your brand, from planning through delivery.

Construction Business Data Analytics

Consider the numerous political, global, and technological changes within the past 12 months. That’s why any long-term business plan is no longer realistic.

Robert Snow Means was a civil engineer who kept detailed tracking records for construction equipment, materials, and labor costs. He became a go-to for construction cost data in the 1940s. Gordian offers aptly named RSMeans construction cost data analytics as well as other technological services to the construction industry.

Construction Monitor data analytics are renewed every week. We provide you with customized, geographically relevant data that can influence business decisions and drive marketing strategies for your company.

Contact us today to develop the dataset that will best serve you.

*Construction Monitor does not endorse nor recommend any software solutions, companies, or brands (except our own).

New Report: It Costs Twice as Much to Build in NYC

Quality construction materials are never cheap, but in some locations construction material costs will take a bigger bite out of your budget than you might expect. That’s even more likely if you’re planning on building in New York City.

construction material costsAnother Boom Means Growing Costs

The building boom New York City enjoyed before the economic collapse in 2008 saw construction costs rise by as much as 12 percent a year. Over the last few years, the city has entered another building boom. In 2015, there were 53 percent more construction starts than in 2014.

This rate of growth is having a similar effect on construction costs as the previous boom. While current prices aren’t quite as high as they were then, costs have risen by far more than the national average.

The New York City Building Congress reports construction costs have grown by around 5 percent in all parts of the city. That’s nearly double the national average rate of 2.5 to 3 percent increase.

Where the Money’s Going

Construction costs aren’t expected to rise as high as they did during the pre-2008 boom primarily due to labor costs. An increase in nonunion labor on New York City building projects means more workers are available at lower rates.

Construction material costs and other expenses may not rise evenly across all sectors. Although the residential sector is still flourishing, the high-end luxury residential market is cooling off somewhat. Costs are more likely to rise in the commercial and industrial sectors, which are set to grow over the next few years. Development and modernization of the city’s healthcare and educational facilities further fuels demand for construction work and the increasing costs. Government facilities, however, won’t have a major influence on the market.

Brooklyn, in particular, is benefiting from the boom. As the city’s third largest business district, it’s less developed than Midtown and Lower Manhattan. The fresh opportunities Brooklyn offers is attracting an increasing number of developers.

To learn more about where construction material costs could be headed, contact us at Construction Monitor.

Implementing a Cost Management Plan in Your Next Build

cost management plan for construction projectsWith so many moving parts involved in every construction project, you’re almost guaranteed to see scope creep and cost overruns if you don’t maintain strict control. An effective cost management plan for construction projects helps you stay on budget and on schedule.

What a CM Can Do for You

A Configuration Management (CM) system gives you a way to accurately anticipate, approve, execute, and track all changes to your project. All relevant paper and electronic documents are added to the CM system to ensure no information is lost. More advanced CM software automatically analyzes data and alerts you to developing problems. Potential benefits include:

  • Reduced administrative costs
  • Less repetitive data-analysis work for your managers
  • Faster responses to Requests for Information (RFIs)
  • Faster processing of Change Orders

Best Practices for Implementing Your Next CM

A cost management plan for construction projects works best when it’s fully prepared before the project begins. Establishing baselines for scope, cost, and schedules from the beginning makes it easier to spot and prevent scope creep.

Define a schedule for the release of status reports to managers. These reports should detail the project’s present state and any changes that have occurred. Develop a change management plan that establishes a set of procedures for the consideration and approval of changes. Include a way to audit the success of each project and document any valuable information gleaned that can be put toward improving future projects.

Look for a CM software that offers Sentiment Analysis (SA). SA technology mines documents for specific words and determines if they’re used in a good, bad or neutral manner. It picks up on words that require attention, such as “delay,” and notifies managers in real time.

Data and text visualization capabilities also add value to your CM software. These analytical tools process live performance data streams to create charts, text clouds, timelines, and other visuals that let you review the status of your project at a glance.

To learn more about choosing a cost management plan for construction projects, contact us at Construction Monitor.

Keeping Your Job Site Costs in Check

cost management plan for construction projectsManaging construction project costs is critical to ensuring that the project is completed on time, to the client’s satisfaction, and within budget. Cost overruns and other financial errors can lead to unhappy clients and a job that produces no profit or, worse, results in a loss. A cost management plan for construction projects should be developed early and followed closely throughout the lifespan of the project. As you develop your plan, keep the following in mind.

  • Plan for the unexpected: It would be impossible, of course, to plan for every contingency and head off each possible error. As you develop your cost management plan, however, recognize that there may be some surprises along the way. Do everything you can to allow some room in your plan for unexpected developments that could affect costs.
  • Strive to avoid omissions: Anything left out of a bid or contract could be a significant problem later. Make sure you understand the scope of work thoroughly and that you check your bids repeatedly to make sure all important points have been covered. Work in provisions that protect you in case the client leaves any elements out of the specifications, plans, or requests for proposals.
  • Do not make assumptions: Incorrect assumptions could be the source of lost profits on a job. For example, don’t assume that a certain procedure or type of equipment is allowed on a job just because it was allowed on another job. Incorrect assumptions can be particularly damaging when working in different geographic areas where rules, standards, and regulations could be different. Always check and recheck the details of a job before committing to a contract.
  • Inspect and prepare carefully: Inspect job sites, raw materials, supplies, equipment, and other elements carefully and thoroughly as you prepare to undertake a job. Surprises or missed problems at this point could delay the start or lead to unexpected costs.

Construction Monitor is the industry’s trusted source for news on trends, statistics, and housing starts in communities around the country. Contact us today for more information on developing and implementing a cost management plan for construction projects.

The Contaminated Chinese Drywall Issue Continues With Another Round in Court

chinese drywallThe high price of cost cutting in building materials continues to rear its head as the Chinese drywall issue again appears on appeals court dockets. As long as nine years ago, Taishan Gypsum sold contaminated drywall to U.S. builders and contractors engaged in residential construction in Florida and Louisiana. Nearly 250,000 sheets of drywall were delivered, representing profits in the amount of nearly $1 million for the Chinese manufacturer.   Continue reading The Contaminated Chinese Drywall Issue Continues With Another Round in Court