It’s safe to say that cost overruns in construction projects have become an industry-wide status quo. In fact, according to a study from KPMG, just 31% of all projects came within 10% of the budget in the past 3 years. –Grace Ellis, Digital Builder Blog
Cost overruns don’t have to be an acceptable loss. With the right construction cost data, many mistakes can be avoided and budgets could be more accurate.
Construction Cost Data Minimizes Loss: Causes of Overruns
It’s never “just one thing” that throws the construction process into a cost overrun. It’s a lot of minor mistakes, usually in the initial stages of the lifecycle, according to construction information management company Gordian.
Project managers anticipate costs; they plan and submit budgets based on projected expenses. Then the bids come in. The market has taken a downturn, materials have become scarce… For whatever reasons, the bids are higher than anticipated.
That’s the beginning of what will become cost overruns. Accurate construction cost data is necessary for estimating expenses. Yes, it’s a software solution. But it can improve and even fast-track planning, reduce mistakes, and minimize waste that can lead to overruns.
In addition to poor cost estimating, overruns occur because of:
- Administration errors
- Last-minute project scope changes
- Not hiring the right subcontractors/team
- Not planning for change orders
- Poor site management
- Uncoordinated schedules
- Unrealistic designs
“Many contractors and owners believe…the best solution for bad administration is to simply increase the size of the administration team,” says Autodesk. “…increasing the number of people in administration could lead to collaboration failures that will almost certainly involve a cost overrun. Instead of adding more to your admin team, equip them with the right tools.”
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Building permit information is construction data available to the public. But it’s a lot of information and it takes a great deal of time to sort through and find what you need.
Construction Monitor was one of the first companies to generate customized data analytics from building permit information. Our subscribers want to study their competitors and develop their target market. They are creating marketing strategies that will generate leads. Those leads can lead to greater profits.
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