26th October 2015
In the last year, 60% of construction projects were delivered late. These project delays, along with financial difficulties and the ongoing skills shortage continue to blight the industry. In a series of blog posts we're addressing these issues, identifying ways they can be avoided. In our second post we look at project delays
A recent report from industry analysts Glenigan suggests the construction industry is growing, with seven out of 10 projects coming in on budget or better in the last year. However, as Glenigan economics director Allan Wilén explained, “The rapid upturn in activity during 2014 put pressure on capacity, manifesting itself in rising material and labour costs and extended delivery times. Evidence from this year’s KPIs suggests that construction firms have managed to keep control of costs, but delays to schedule have worsened.” What’s more, according to data shared exclusively with Construction News, 60% of projects were delivered late in the past year.
The Domino Effect
Output and growth within the construction industry directly affects the UKs economic growth, therefore the recently released figures that state 60% of projects are delivered late are a major cause for concern. Project delays can severely hinder growth within the industry costing thousands, even millions of pounds, causing further financial difficulties, something we looked at in our last post here. The contractor can suffer as their overheads and expenses increase, eating into profits, and the owner suffers due to their inability to open their new business on time.
There are three types of delay:
Excusable- Delays you have no control over, caused by severe weather, unpredicted site conditions, flaws in the project design, labour disruptions and availability.
Inexcusable- Delays you have control over, including predictable weather conditions, poor planning, scheduling, and overall project management and insufficient staffing, in which case the client may be due compensation.
Compensable- Delays caused by the client, including changes in the scope of the project, change of site conditions and late payments, whereby the contractor is owed compensation.
A project delivered on schedule can stimulate growth, minimise financial difficulties and increase confidence, which in-turn has the potential to encourage more skilled workers to the industry. In order to achieve this, those in construction must effectively monitor and manage their operation reacting to any issues that could cause a delay. It is important for those critical to the management of a project to be involved earlier on, even within the design stage. It is also imperative for all those involved to have complete sight of a project, with the means to collaborate and communicate effectively. By having one centralised solution, such as NAVcontracts, everyone remains up to date and on schedule.
How Construction ERP Software Can Help
In order to avoid project delays, construction companies need to be able to effectively monitor, manage and adjust their plans accordingly. ERP software can help you with:
Resource management- ERP software has the potential to increase efficiency without having to hire more staff, through the effective management of labour depending on the stage of the project. Added to this, construction specific ERP software allows you to implement processes that automatically order in equipment and materials you need to complete a project, when you need it. By knowing what you require, you can also prefabricate some of the items off site, which would reduce waste, minimise errors and make for quicker and easier installation, keeping you on schedule.
Collaboration and communication- Software such as NAVcontracts allows you to record client to contractor communications, along with contact with partners and suppliers. Furthermore, by using one centralised system that is accessible to all who need it, you have the ability to minimise delays caused by change requests, as the collaborative platform allows everyone to keep up to date.
Project management- By utilising ERP software you can digitally document each and every aspect of the construction project. This allows you to create accurate forecasts and schedules, which it turn enables you to predict potential delays and react to them before they affect the project.
If the construction industry is to meet the Government’s Construction 2025 performance targets, the adoption of new methods of working and technologies that enable them to identify and prevent potential delays is imperative.
Find out more about ERP for construction here.