Benefits of Construction Management Software – Visibility and Project Forecasting

If you remember, in my last blog post Kip Edwards talked about how it’s hard to get a ‘full picture, and a timely picture’ of your capital construction program without the use of construction management software. This is what we refer to as lack of visibility. Visibility is important for several reasons, among them the ability to accurately forecast your projects’ cost to complete, and your cash flow needs through the life of the project. In this post, Kip shares solid evidence of the benefits of construction management software.


The Benefit of Effective Cost Forecasting

"As you know, we utilize e-Builder as our project management system, and that's a major, major component for us, one that we were looking for from the very beginning. For all of our projects, we do ongoing forecasts of where that project's going to end up. So literally, we go through a monthly cycle that we review each and every project, everything that's happened on it, everything that we know is going to happen, and quantify that. So at any given point in time, for any project, or a roll-up of all the projects, we can say we expect to spend X number of dollars on that project, or on those hundred projects or on those 50 projects or the projects at this medical center. Now, the key to being able to do that is having the tool to document those costs. It's real easy to pick a number, and for a lot of folks, [forecasts] means the budget: how much are you going to spend on the project - well, I'm going to spend the budget. Well, that's not a real forecast. A real forecast lets you get down to the level of detail so you understand what's going to be… what it's going to be spent on, what the specific items are, and it's dynamic. So you have to be able to manage that over time, and you have to be able to update it. And as you update it, you want to still be able to go back and see what it was before so you understand how you got there. So having a tool that ties you to your project accounting that you can very quickly add on and add those additional costs in, manage it over time and update over time, gives you the ability to have a true forecast."

"The benefit we've gotten out of it, other than just knowing truly where we are in each and every project and the program at any one time, we've just recently gone through our projects and gathered $70 million out of active projects. Why? Because we have a level of confidence on exactly where those projects are, exactly where they're going to end up. Because we have developed the detailed forecast, we were able to decide - not wait [till] the end of the project, but decide right now - to pull 70 million out of those collection of projects and redeploy it to other needs. And like everybody, capital is tight these days. We need every dollar we can find, and we have a lot of needs that require funding, and this let us fund a number of things that wouldn't have otherwise been funded right now."