As construction projects become more complex and technical, knowing your day-to-day status is essential to successful completion. The time it takes to issue and answer an RFI is usually critical as it might delay the overall construction schedule. And those who still have to rely on basic tools such as email, spreadsheets and hard copy forms to manage construction programs understand the complexity of managing document-intensive projects. There are construction software platforms specifically designed to alleviate this painful process, yet it can be difficult for construction program directors to understand the real value when they’re shell shocked by the price tag. They may even balk at the idea of using construction management software.
So, when you know you need a new way to manage your construction program, but you’re asked to present a business case with clear return on investment, what do you do? You show how project stakeholders would be spending more time and money managing the paper than managing the projects.
Construction Software Hard Costs
It’s nearly impossible for a construction program to make ALL documents digital. There’ll always be the need for some hard copies of drawings and submittals. Even still, there’s a much more efficient way for these to make the loop from contractor to architect to engineer and so forth.
Construction Drawing Submittals:
Unless you’re using a blueprint software, unnecessary drawing sets are going to require printing and shipping. With continuous markups throughout the review cycle (contractor to architect, architect to engineer, etc.), your team is likely wasting four drawing sets on average per project.
So, in a single $8 million construction project, you can eliminate the use of 22,649 sheets of paper or 274 pounds of paper (that’s 528 kilos of Carbon!) and save more than $32,900 in submittals alone by moving to a digital process.1
Construction Bid Sets:
The cost savings from using a digital bidding platform are substantial. The average construction program sends out about 15 bid sets per project. According to the pricing above, you’d be saving $7,500 by allowing your vendors to access digital bid sets from a central online portal. Remember, that’s PER PROJECT. At 20 projects a year, you’re saving $150,000 annually.
So, you can see how a digital bid management process will save money, but it will also save you time.
Instead of taking 2-3 days to update, print, and send technical documents, Software eliminates the whole manual process. Your project team simply creates bid solicitation requests and publishes information to the virtual plan room. Contractors then register to view bids through a separate registration process—and your team will appreciate not having to answer the same repetitive questions again and again from each vendor.
With the savings from printing and shipping costs alone, you can expect to save close to $10,000 per project from your operating costs. Even if your program runs just 10 projects a year, you’re looking at nearly a $100,000 savings.
Construction Software Soft Costs
Changes orders and construction projects go hand in hand. Change orders come through email and often get lost, misfiled, or end up sitting in someone’s inbox for days. By the time they’re addressed, there’s a good chance work has already been completed—incorrectly. Now construction teams are faced with the challenge of rework while the owners get stuck with the additional expenses.
How often do your change orders wait for a response? What percentage of your costs come from unapproved change orders? Do you know? With the right construction program management software you’ll know immediately if a change order is issued, and appropriate individuals are notified almost as quickly as the change order is generated. And, only approved change orders make it to accounting. The entire process is tracked in the software, linked to the correct budget, and accompanied by all necessary documents.
Just like change orders, when requests for information (RFIs) are left without answers, field teams delay work and (hopefully) move on to other tasks. Either way, the GC is paying these workers for their time—which really means you’re paying for these delays. In addition to longer schedules and higher labor cost, a study by Navigant shows that each RFI leads to more than $1,000 in administration costs alone. Based on this study, Navigant found that total RFI costs for each project come close to $1 million, and roughly 22% of RFIs never even get answered. How does that translate to stagnant crews and expensive rework?
Across the board, experts agree that the most effective way to combat extraneous costs is by implementing a collaborative construction project management software. By doing so, you enable your teams to address RFIs upon submission. Real-time alerts are sent as soon as an RFI is created, allowing immediate responses and reducing the lengthy and very linear RFI process.
While this saves tremendous amounts of processing time, the right software also eliminates confusion in the RFI process. All necessary documents and attachments are easily linked to the RFI submission, so there’s no wasted time searching various platforms for related files.
Construction Software Invoice Approvals:
While manually processing change orders and RFIs have serious implications on program budget and timeline, this holds true even more so with pay apps and invoices. This is traditionally a drawn-out and tedious process for an owner’s administrative staff: pay apps come in, they’re sorted by project, sent to each project’s respective PM for approval, manually entered into a spreadsheet, then sent to accounts payable where they’re finally entered (manually) into the accounting system.
The entire process is managed by instant notifications when using the right software that includes a cost-tracking suite. Whereas invoices took more than 8 days for approval with a manual process, they are now approved in 2 ½ days. In terms of cost savings, we have clients that save more than $100,000 annually on interest from past due invoices.
What’s great about having a construction management software is that data only need to be entered once—reducing errors and ensuring consistency. Those approved invoices line up with the exact costs and track right back to each project’s budget. And, upon approval, invoices are pushed seamlessly into your ERP system.
Less work. Lower costs. Better results.
Using the right construction project management software has a clear impact on projects—both financial and operational. While they may vary based on industry, process methodology, and existing systems already in use, the costs outlined are ones every program has had to—or will—face.
Most programs end up tackling busted budgets and schedule delays because of these challenges, but when you implement the right construction program management software, you mitigate these risks and your program will run like a well-oiled machine. And better yet, the value over time will outweigh the investment.
If you’re ready to find out how the right construction project management software can work for you, request a free live demo.