16 October 2020 4 min read

The True Cost of Project Delay in Construction and How to Avoid It

 

Construction companies of all kinds share one big challenge: project control to avoid delays and, therefore, losses that make the project surpass the predicted cost. What are all the levels that are affected by this delay? How can this delay be avoided? Do not miss these key points!

Construction companies of all kinds share one big challenge: gaining control over their projects to avoid delays and losses that make the project surpass budget. This is a clear common pain point with any company operating in this industry today. Different stakeholders are afraid of how many things may not go to plan. The [dream] aim here is to be able to publicly state “We deliver on time and on budget!”. How can companies achieve this level of project control?

No matter the size of your construction company or the complexity of your projects, your business is managing different internal and external partners and taking care of your clients and tons of detail. Without a proper process and right tools in place, human error is almost certain. When this happens here is a list of points highlighting potential cost effects to your company:

1

Money Loss
When your company does not deliver on time, the more time it takes the higher cost. It can result in your company making a smaller profit, no profit at all or even paying to deliver. Some companies even share the loss with the client. This scenario is financially unhealthy and far away from any business aims - to make a profit.

2

Client’s’ Credibility Loss
Once the project has a delivery deadline, expectations are set. Not being able to deliver it causes frustration and impacts on your client trusting you less and maybe even starting to question your common agreements. Depending on how often it happens and how long the delay, it may result in you to not only lose future opportunities with this client but also with others in the market. You do not want a reputation for not delivering on time.

3

Partners’ Credibility Loss
In construction, you do not work alone, either you are working with other companies that you hired or that were hired with you. If your delivery is delayed, it might impact the other partners part of the project and your delay may cause other companies to equally delay and lose money too. Once more, you do not want to be famous for delaying projects. This will cause other companies to avoid working with you as much as they can, and you will likely lose future business.

4

Time Loss for Future Projects
If your team is working on an overdue project, you either lose the possibility to start a new project or are automatically delaying another project. In both scenarios, your company is losing, as the popular saying goes “time is money”.

5

Team Productivity and Morale Decrease
Professionals who not only do a good job but also care for your company are a great asset for your business. When clients and partners are dissatisfied because things are out of control within the project, the great human assets of your business will have low morale, deeply impacting their productivity. Great assets are there for you to trust, support and let them do their job as experts for your company.

The impact of project delay can devastate companies. Project control is a must, it is the key point for making a profit in this industry. In order to achieve better company health in business for the long term, steady and sustainable growth, the key is not to miss the opportunities with advanced technology today. Challenges brought on by COVID-19 clearly shows the need to have good tech solutions for businesses to be as resilient as it can be.

Project control comes from knowing what you do well so that you can foresee future problems coming and solve them before it becomes an actual issue. For it to be even possible in the highly complex world of construction, your team needs a software that is flexible enough to address your company needs and user friendly enough to be smoothly implemented and internally adopted. If this software was made for this industry it will be even better as it will strategically address your true business needs. Take a look at these stats around the return of investment from companies adopting construction software:

Streamlining Processes
Reducing human error by 30% from implementing tailored processes.
[Emerson]

Generating Cost Savings
Save £200 per RFIs by reducing unanswered and overdue ones.
[Impact & Control of RFIs on Construction Projects, Navigant Construction Forum]

Saving Time
Save up to 10 hours per week on non-productive activities including the search for project information.
[Dodge Data]

Implementation Experience
8/10 user companies feel well supported when implementing new technology.
[JBKnowledge]

Reporting Visibility
Live data performance tracking through thousands of configurable dashboards available.
[Archdesk]

Project Control
68% of trades point to poor schedule management as the key contributors to decrease labour productivity.
[Dodge Data]

Would you like to know how this can work for your company? Take a look at Archdesk Solutions.

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