As a business head in the construction industry, you certainly have an idea of how challenging forecasting projects can turn out to be. Indeed, setting realistic objectives and managing your cash flow are demanding. A report from KPMG reveals that a mere 31% of all construction projects eventually fall within 10% of the estimated budget.
Besides, the sheer magnitude of moving parts within the industry requires you to use a construction dashboard. It will help you organize and consolidate relevant data to make intelligent decisions. Moreover, it’s crucial to have a system to access data at a simple glance.
In addition to using branded dashboards, there are other ways to enhance your construction cost forecasting, which is the focus of our article today, so read until the end. You can also check out Bridgit for more Information on enhancing your construction project forecasting.
Why Is Cost Forecasting Crucial In The Construction Industry?
Construction managers prioritize project forecasting for several reasons. Firstly, they need to schedule the task and supervise the subcontractors for quality assurance. Next, project managers need to feel their clients’ pulse and keep the budgets within limits.
With building materials becoming increasingly expensive, it makes sense to have a specific system to forecast the cost for you. Rely on innovative technologies to reap the benefits of effective measures that detect potential cost overruns. Your project managers can then implement risk-mitigation techniques.
How Can You Improve Your Construction Project Forecasting?
Here are seven potent ways to significantly better your construction project cost forecasting:
1. Long-Term Evaluation
Experienced project managers often recommend re-evaluating the project cost forecasts. This is because you need to adjust your resources as per changing costs. Depending on the environment and your access to materials, their corresponding costs would also be increasing. Evidently, re-forecasting would be an effective strategy as you need to plan for the long term.
It doesn’t make sense to make decisions based on predictions from months ago. Rather, make sure to have rolling budgets and forecasts in place, especially when it comes to construction forecasting. This way, you would be better equipped to make decisions based on current market conditions. You can keep your budget closely aligned, and more importantly, realistic.
2. Embrace A Collaborative Strategy
Merely roping in finance professionals while working on your project forecast won’t do much good. After all, this is not a one-person task. A collaborative effort involving marketing experts, stakeholders, project managers, and other heads of the team would be a more realistic approach. Poor communication and errors in data lead to more than 50% of the reworks in the construction sector — don’t let this be you!
What you need is a cross-departmental plan that would give you crucial insights and help you resolve the challenges in time. Collaborative cost forecasting encompasses all the departments, so you would eventually consider every aspect influencing your budget.
3. Use Technology For Accurate Forecasts
Predictive analysis can go a long way in helping you evaluate your project costs accurately. Leading construction giants are already reaping the benefits of technology. These tools analyze your past trends and project performance to predict the upcoming costs.
With machine-backed decision-making, you can gain proper insights and alter your strategy accordingly. Moreover, advanced tools can integrate all your systems and generate comprehensive trends that would prove valuable to you.
4. Deploy Automated Processes
Automating your construction forecasting mechanism can help you save more time and money than you think. Also, who wouldn’t want to eliminate tedious processes like data collection with cloud-backed systems!
Construction project managers and other teams can now automate the data collection and integration process. You can rest assured that all the departments within your organization will be on the same page with accurate information.
5. Eliminate Guesswork
Critical construction projects are highly cost-sensitive. Even a minor error during your guesswork can conspicuously reflect itself on the overall project cost. Therefore, make sure to obtain critical data from all the sources, including the stakeholders, to make the correct decisions at the right time.
Remain open to potential blockages — a change in order or delay in receiving your materials. Smart tools and dashboards will make information easily accessible to you. Accordingly, you can make your decisions based on concrete details and not merely your guesswork.
6. Project Budget Balancing
Some of the core budgetary considerations include the contractor budget and insurance expenses (comprehensive and general liability). And this is the same for almost every project, regardless of its size. Moreover, you need to allocate funds for drafting your blueprint and getting it reviewed. Include the engineer and architect charges and address the zoning permits, surveying, and departmental transportation. Other expenses include plumbing, mechanical, electrical, and material costs.
Too many heads often make it tedious to track your expenses. This explains why leading construction firms advise their project managers to use branded dashboards. Moreover, it can also help you with better insights and predictive cost data.
7. Synchronizing Your Systems
You might have noticed that most established construction firms currently use integrated platforms or software to synchronize multiple systems. Doing so would leverage your teams and provide them with a much higher chance of effectively managing the field as well as the finances.
We highly recommend using a construction management system to streamline your organizational endeavours and management. This way, you can ward off the chances of miscommunications or bottlenecks. Cross-platform data transfer becomes amazingly easy with such systems at your disposal.
With construction management turning out to be a demanding pursuit, automate routine tasks and ensure early communication. We recommend using a professional dashboard and construction management tool, preferably with an easy-to-navigate interface. This would keep away possible chances of misinterpretations.
Precision forecasting is now a reality for construction firms, and it’s high time you get on the bandwagon! With powerful construction forecasting software, you can eliminate human errors and boost productivity. You would have real-time data at your disposal, and integrating all your departments with these advanced tools would empower your project managers to make informed decisions.