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Keeping to a project’s budget is one of the most important elements of the construction business — if not the most important.
After all, if you aren’t staying on budget, what are you? Chances are cutting into the slim margins that construction projects provide. And still, shockingly, some nine out of 10 construction businesses report that their projects normally go over.
With how important it is, why does the industry struggle so much with this crucial task? For many, it’s a lack of proper planning and poor estimating, for others it’s an inability to pivot effectively to respond to change. Change — in the form of bad change orders — can itself be a major contributor to project overruns. Of course, poor decisions made during planning contribute to an increased number of change orders during construction. It’s a vicious cycle.
But it’s not all bad news. In this blog we’re going to look at three pretty easy things you can do to help keep your project budgets on track, starting with:
- Using technology — Many construction companies are keen on using technology, but it’s usually just around accounting or Enterprise Resource Planning (ERP) systems. Widescale digital transformation in the industry has been slower, but it is a key to improving collaboration and improving decision-making at all stages of the project. For example, Briq connects information from existing systems, like accounting, ERP, and project management, to give planners, estimators, and business owners a clean, real-time view of what’s happening. This improves planning, but also arms decision-makers what the data they need to inform better outcomes should a change be required.
- Looking to the past — They say don’t dwell in the past, but for construction companies the past has a rich, abundant source of vital data from which to make more informed choices around today (and the future). Technology plays a part here. A financial automation platform will bring relevant historical data to the surface, allowing you to create what-if scenarios based on similar past projects, and create more realistic budgets that recognize the challenges such projects have experienced before. That way projects start out lining up better with final costs, and should uncertainties be introduced, you’re better prepared to respond and bring things back on budget.
- Communicating better — Throughout the lifecycle of a project, strong communication and collaboration are essential. Construction projects have innumerable moving parts and involve countless individuals, third parties, and stakeholders. From providing realistic budget information to banks and insurers to making sure clients are given accurate estimates and updates, to giving project managers the information they need to steer the project to completion, communication is key. You guessed it; technology once again comes to the rescue. Software that supports communication can keep everyone on the same page, and everyone on the project team knows their roles and responsibilities.
You can’t account for every uncertainty on a project that results in overruns. There are an incredible number of factors involved in budget development.
Still, through greater use of technology, an accurate view of past and current projects’ financial health, and better communication and collaboration, you can make sure that budgets are more certain, more informed, and come in closer to the end costs.
Briq helps by connecting all stakeholders, keeping project workflows from stalling, and facilitating collaboration across teams by automating the connection of their systems. Briq’s AI doesn’t do all the budget planning work, but it gives estimators, owners, and project managers the data they need to do it right.
Want to learn more about how to keep your projects on budget? Read our recent eBook Keys to Keeping a Construction Project on Budget.
Or to find out more about how Briq helps with project planning, budgeting and more, visit briq.com/demo for a demo from our experts.