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Use Work Management Software to Complete Construction Project within a Defined Budget

Let’s be clear about one thing:

“No project manager likes to slaughter a budget, defined for a construction assignment.”

And, why would they? For cost overruns demean their integrity and reputation as a professional, while also implying that the final completed project is less profitable for their clients too.

Yet, according to the Global Construction Project Owner’s Survey, conducted annually by KPMG International, only a minority of construction projects  were completed within the defined budget.

This calls for a robust review of the implemented cash flow control system both at the time of project planning and at the time of project execution. 

The focus area of this blog is implementing and regulating a cash flow control system during project execution phase, so as to identify the deviations and take steps to mitigate the cost overrun risk. And, to assist in the exercise of the practice, work management software appears to be an indispensable solution. 

Regulating the Labor Cost with the Help of Work Management Software

Labor cost is among the two primary expenses associated with a construction project – the other being raw material cost which we will discuss shortly. The deviation observed between the actual incurred expenses and the planned expenses is often attributed to the changes associated with the labor cost. By using work management software, you can address this issue.

Work management software provides a list of activities needed to be completed for the construction project to progress further, acknowledging all the manpower channeled towards the execution of a task. Project managers can identify the human resources and monitor the daily hours expended towards the completion of an activity. This helps them to keep track of the incurred labor cost and compare it with the expenses defined at the time of budget planning. If they observe that the actual and the planned labor cost do not align, they can probe into the matter and identify the reason behind it, which could be any:

• Inefficient operations leading to overtime and hence an increase in the labor cost.
• Redundant workforce being assigned to work on a task, leading to unnecessary increase in labor cost.
• Increased absentee time etc.

All of these can be easily monitored with the help of work management software, enabling the project managers to take steps to resolve it.

Regulating the Raw Material Cost with the Help of Work Management Software

As discussed previously, raw material cost is the second of the primary expenses associated with the execution of a construction project. As such, it too needs to be monitored for any discrepancies between the incurred cost and the expected cost, so that necessary steps can be taken to curb the risk of cost overrun. 

Here again, work management software can help project managers.

• Project managers can keep track of the raw material been utilized and assess that whether the stock has been efficiently channeled towards the execution of construction task or not. If the findings are not satisfactory, project managers can then look into the matter to re-align the expensed budget with the planned budget.
• Project managers can conveniently communicate the requirements with the site foreman through a work management software solution.
• Through work management software, project managers can identify if the project is facing issues from the procurement side, by keeping track of the invoices. If they feel the procurement is not being handled productively, they can inform the procurement manager and look for alternative suppliers or ask them to conduct refined negotiations.

In conclusion, a work management software solution provides different ways to implement and regulate cash flow control system during the execution of a construction project. This helps to ensure that each project is completed within the defined budget.