Take the guesswork out of running your business
In the world of construction, one thing is for certain - things change. Projects get delayed, materials go out of stock, prices increase, the weather turns bad... the list goes on. This constant state of flux can make it very difficult to run a construction business effectively. After all, how can you plan for the future when you don't even know what's going to happen tomorrow?
This is where business intelligence (BI) comes in.
BI is a set of tools and techniques that allow you to collect, store, analyse and visualise data. This information can then be used to make informed decisions about your business.
For example, let's say you're a subcontractor who specialises in fit-out work. You might use BI to track the progress of your projects and identify any potential problems. This information can then be used to make decisions about things like resourcing and material purchases.
BI is extremely beneficial in a subcontractor's world. It allows you to manage your project finances in a much more efficient and effective manner. Not only that, but it also provides you with real-time insights into how your projects are progressing. This information is vital in making both strategic and tactical decisions.
Given 73% of construction contractors cannot ‘push one button’ to obtain fully integrated, real-time project data (according to McKinsey), you may be like many other construction business owners who are unable to easily tell how projects are performing. It's difficult to see complete, accurate and up-to-date commercial data because project information is stored across many systems and spreadsheets.
And the consequence?
Critical project and business decisions are often made based on a combination of incomplete data and ‘gut feel’. Sound familiar?
How many contractors can obtain real-time data
Source: McKinsey
But just think how different it could be if better systems and processes were adopted. Business owners could make sound operational and strategic decisions confidently, knowing the data they're using to make the decision is accurate. They they could make data-driven decisions.
This isn’t a pipe dream. Those subcontractors who are ahead of the curve are already running projects using software that provides a structured cost management framework and business intelligence. They can analyse key business and project metrics in real-time.
“Real-time data enables you to make important decisions without delay.”
BI is at its best when the subcontractor’s project team uses cost management software, like Chalkstring, for managing project financials at every stage of a construction contract.
As projects progress and more cost data is captured, the software builds up a ‘picture’ of how each project is performing against its original budget.
Actual and projected revenue and margin figures are all available instantly because the entire project team uses one, integrated system. Financial reports and project dashboards give a real-time overview of how each project is performing against its original budget, meaning potential issues can be quickly identified and addressed.
This comprehensive picture means that informed decisions can be made at every stage, from pre-construction through to project completion.
There are countless benefits to be gained from making data-driven decisions, but here are just a few:
Improved project performance
By having complete visibility of how each project is performing against its budget, you can identify early warnings so take corrective action if needed. This improved level of oversight leads to better overall project performance.
Increased profitability
Data-driven decision making enables subcontractors to maximise efficiency, revenue and margin on every project. For example, this eliminates the wasted time required to pull financial data from multiple sources because all activities that affect costs and revenues are held within one system. Subcontractors have a 360° view of live project commercials enabling them to:
- quickly identify and manage project risks
- make informed decisions on pricing variations
- maximise revenue through add-ons and change orders
- improve buying power through intelligent procurement
Enhanced visibility and control
A single, integrated system provides subcontractors with complete visibility and control over every aspect of their business. This means that they can:
- Evaluate how are projects performing, individually or collectively
- Understand accrued costs they’re liable for in real-time
- Achieve the best prices & economies of scale when placing orders
- Ensure supplier invoices & rebates are correct
- Check labour subcontractors aren’t over charging
From a strategic standpoint, data-driven decision making enables subcontractors to gain a real understanding of how their business is performing. This valuable insight can be used to make informed decisions on everything from pricing and tenders through to variations and resource allocation.
For example, by analysing project data, subcontractors can:
- Develop a more accurate view of their target market
- Price tenders more accurately
- Identify areas where they can improve their margins
- Allocate resources more efficiently
The benefits of data-driven decision making all lead to one thing – improved business performance. By having access to accurate, up-to-date information, subcontractors can make informed decisions that will help them to increase revenue, improve margins and deliver better overall project performance.
If you’re ready to take your business to the next level with data-driven decision making, Chalkstring is the perfect platform for you.
The benefits of business intelligence are clear and, if you’re not already using a software platform for managing your project financials, get in touch. It could be the best business decision you ever make.