How Construction Project Management Software Helps Trade Contractors Manage Project Risk

Construction is an inherently risky industry, which is why project risk management is so important. 

While it’s impossible to avoid all risks on construction jobs, it’s imperative that trade contractors mitigate as many as possible before they become significant issues that can potentially derail projects. Technology has become the key to assessing and overcoming the most common risk factors in construction. 

“Many of the risks that face construction companies today are the same as they have always been,” explains EY Global Engineering and Construction Leader Erin Roberts. “What we are seeing now is a move toward technology that…allows the use of data analytics and machine learning to collect vast amounts of data to spot risks early and mitigate those risks in real time.”

Construction project management software, like eSUB, plays a critical role in that risk management by centralizing and analyzing project data so teams can better identify risks and work together towards common solutions to avoid them.

“Good construction risk management requires a high level of collaboration and communication with all parties involved,” writes Kendall Jones, editor-in-chief at ConstructConnect. “Keeping everyone on the same page and working together will allow you to identify and manage risks before they become a problem.” 

Here are some of the biggest risks that construction project management software helps to mitigate. 

Risk of Poor Project Design and Plans

One of the biggest risks to successful construction job completion is gaps in project design or missing pieces of information in project plans. “If a construction project is designed poorly, project conflicts and onsite errors are inevitable,” writes Lori Buckman Moes, chief financial officer at DJM Design CAD & Coordination Services, Inc.

These types of problems aren’t always caught before construction begins, so become a threat to a project’s budget and timelines. In worst case scenarios, they can lead to the demolition of completed work. When these issues are identified early, technology can help you quickly resolve them so they don’t derail your projects.

Communication is necessary to a quick resolution, and construction project management software facilitates faster collaboration and communication. Because the software has mobile capabilities, the person who notices the error — whether at the office or in field teams — can easily enter project-specific field notes that anyone can access.  

Those real-time notes can then quickly be turned into RFIs (Requests for Information). The software facilitates a fast turnaround on RFIs by streamlining the processes for creating, storing, and responding to them. The centralization of the data and documents also enables stakeholders to track the status of RFIs which helps them get resolved quicker.

The faster that resolution happens, the less risk design and planning issues pose to the project.

Labor Risks

Labor is one of the greatest risk factors in construction.

The ongoing labor shortage in construction is creating skills gaps that are becoming increasingly difficult to fill. “Construction workforce shortages are severe and having a significant impact on construction firms of all types, all sizes and all labor arrangements,” says Ken Simonson, chief economist for the Associated General Contractors of America.

Even when projects are fully staffed there’s no guaranteeing they will stay that way throughout the project. Turnover is a constant labor risk. When there isn’t enough manpower on the job, projects can quickly fall behind schedule.

Effectively allocating labor to maximize productivity is crucial to mitigating labor risks. Construction project management software helps with this by creating efficiencies that enable you to do more with less in terms of labor.

For one, it can automate administrative tasks like daily report submissions and photo documentation that otherwise take up time that field teams could be spending on project-specific work. Alleviating administrative work also allows workers to take on more responsibilities to help cover skills gaps. 

But perhaps most importantly, the software enables you to allocate your labor more effectively to keep projects on time and on budget. No doubt you have some labor waste, typically caused by job site idle time and project overstaffing. How do you know where that is and what gaps are there? Through your project data.

“Real-time data collection gives project managers earlier, more detailed insights about progress, allowing them to intervene more effectively to maintain productivity and keep projects on track,” write Garo Hovnanian, Ryan Luby, and Shannon Peloquin with McKinsey & Company. With that intelligence, you can better forecast labor requirements and allocate your labor resources to meet project needs. This helps you avert the risks associated with labor shortages.

Change Order Risks

Change orders are another common construction project risk, and can wreak absolute chaos on jobs. 

“Change orders are one of the most probable risks a construction contractor would face,” according to Blackridge Research & Consulting. “Change orders can cause increased project cost, delayed deadlines, imperfect and interrupted works, and even unfinished projects.”

The difficulty is that there’s not much you can do to completely avoid change orders. The best you can do is to put the right tools and processes in place so you can mitigate the damage. That’s where construction project management software comes in.

The software centralizes real-time data so you can better forecast and control the impacts of change orders. When you can accurately predict how a change will affect a project, you can allocate resources to accommodate them. The technology also streamlines the change order request and approval processes to help you get those changes implemented faster. 

These capabilities all serve to mitigate the risks change orders pose to your budget and schedule.

Risk of Siloed Project Information

There is also the risk of project data being siloed and, therefore, inaccessible to all project stakeholders. 

When companies operate under manual project documentation processes, field teams may hold on to their documents for days at a time rather than returning to the office at the end of each day to submit them. As a result, they alone own that information until their paperwork is turned in. This means decision-makers are essentially working with outdated (bad) data.

When there is no universal access to accurate project data, stakeholders can’t make well-informed decisions nor can they adapt quickly to changing conditions. Those are the problems that construction project management solves — it centralizes documents and data so everyone has access to the most updated project information at all times. 

“Real-time updates provide a single source of truth for the project,” writes Ibrahim Seif, vice president of sales at finance platform Prophix. “Data integration across the various stages of the construction process puts an end to data silos,” he adds.

This reduces the risk of projects running over budget or falling behind schedule. 

Miscommunication Risks 

Poor project communication and collaboration are significant risks to construction projects. When project teams can’t effectively communicate or collaborate, mistakes happen, job costs go up, and timelines fall apart. 

One of the main causes of miscommunication is “a lack of standardization in communication protocols,” notes AEI Consultants. Construction project management software addresses this risk by streamlining documentation processes and centralizing project data which facilitates better collaboration. 

For example, field teams can instantly upload job site details through eSUB so everybody has access to the same information. When all stakeholders are on the same page, there’s less risk of miscommunication. All data is shared in real time so nobody has to track down updated information and then email, call, or text those details to others. This saves time and eliminates confusion. 

Better collaboration is one of the many benefits Kasper Electric has experienced with eSUB, particularly through the mobile app which allows field and office teams to communicate more quickly and efficiently. 

“We have been able to reduce costs and mistakes substantially because there’s no longer the need to send lengthy documents, drawings, and plans out to the field and vice versa,” says Carmen Carbone, former director of business development at Kasper Electric. “It’s all right there on their mobile devices to make accurate decisions and continue finishing the job.”

To learn more about how software can help you manage project risks, schedule a demo of eSUB Cloud today.

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