A construction project starts well before the first shovel breaks ground, and its margin can be won or lost in this early stage. Preconstruction is becoming widely recognized as the most critical phase of a project when it comes to protecting margins, with contractors and owners alike increasing their focus and investment in project planning and design. When executed well, it can set the tone for your company’s success on future projects for years to come.
The shift to more collaborative planning and open build models has redefined the status quo for execution and partnership on projects. Integrated project delivery [IPD] and design-build delivery methods, paired with guaranteed maximum price [GMP] and cost-plus contract types are becoming more and more common, and will force the industry to adapt to and demand technology platforms that enable seamless collaboration from anywhere. This emphasis on open communication and collaborative design reinforces the notion that a project’s success really does start with design and planning, and some may argue that anything after that is about making sure things adhere to what began as a perfect plan.
“If you Fail to Plan, You are Planning to Fail”
This Benjamin Franklin quote lends timely support to the rising importance of preconstruction and the critical role precon data plays in setting your projects up for success. No matter what phase of the construction life cycle you’re in, the global pandemic has fast-forwarded the requirement of digitization and a single source of truth, maximizing productivity for project teams and enabling the ability to work from anywhere.
Robust project data sets, connected platforms, and real-time insights are powering the next wave of digital transformation in our industry. The companies that are able to effectively capture, extract, and analyze project data across a project’s life cycle will make better real-time decisions, differentiate themselves from the competition, and attain a higher profit potential.
All Data is Not Good Data
The project insights you generate are dependent on the standardization of how you input and gather the data to begin with. Data needs to be accurate. It needs to be captured in real-time and it needs to be complete — meaning not siloed in multiple spreadsheets or stuck in disparate technology solutions that don’t talk to each other. If you aren’t looking at all of the data, you might as well not be looking at all.
The future of construction is about connecting preconstruction to real-time financial data captured during the construction process. It will be less about hanging onto thin margins and more about leveraging data to make the best decisions on project pursuits, business partners, design plans, and preparing accurate estimates. According to the 2019 Construction Technology Report, contractors see "estimating accuracy" as one of the top 5 biggest impacts to the industry over the next 3 years. The same report cites that 65% of companies are still heavily dependent on spreadsheets to manage their estimating workflow. Despite it’s criticality, estimating has historically been seen as one of the most cumbersome, time consuming, and error-prone aspects of the preconstruction process. If you’re using spreadsheets to manage one of the most critical and margin-enhancing aspects of your business, you’re eroding your fee before the project has even started.
What Goes in is What Comes Out
In the future, project estimates won’t start from scratch. Contractors will be able to complete the data journey by connecting actual costs to estimates to drive smarter decision making on future jobs. This future requires the life cycle of a project’s data to be managed on a single platform that project teams enjoy using. The outputs generated are only as good as the inputs provided — meaning your team’s buy-in and adoption of the tools are critical to capturing the wide array of accurate data inputs that you need in order to extract key insights that affect the margin.
Capturing consistent and accurate data is also integral to leverage key enhancements in artificial intelligence and machine learning. These advancements in technology are only as smart as the data and direction they are given. It’s critical that data is accurate, complete, and comprehensive so that the insights these engines can provide are accurate and action oriented. Without an integrated platform that bridges the data connections across life cycles and provides solutions your teams are willing to adopt, you’ll never be able to leverage the power of real-time, data-driven decision making. Over the next three years, simply running lean and efficient will no longer make contractors competitive alongside companies operating on platforms with data-driven insights.
The future of design, planning and preconstruction is enabling the unlocking of a project’s complete data journey, with actual data driving inputs for future pursuits. Real-time insights and robust data sets will sit at the forefront of all decision making, and drive new profit potential as companies put emphasis on future-proofing their projects before the construction phase has even begun. These values are inherently tied to the foundation of what a platform can offer and the companies who are able to connect these data silos will thrive in their preconstruction process and this next wave of digital transformation.
As senior vice president of product at Procore, Wyatt Jenkins is responsible for understanding and taking on customers' construction challenges head on