Construction projects are a one-off endeavour, where numerous machines, equipment and people come together for a stipulated time to create a unique tangible asset within an assigned budget.
Every construction site is different, where numerous variables work in sync towards a goal. However, each project site has a different set of challenges and risks. This makes it quite taxing to streamline the complete lifecycle of the project owing to which the time and cost overruns have become a usual affair in the construction industry.
The overspending and delays in any sector can be mainly boiled down to productivity and efficiency lags. And in construction, the toppling of even the smallest pieces can lead to a domino effect of epic proportions which is quite evident in popular industry statistics. As per McKinsey report, there is a $1.6 trillion productivity gap in the industry, where large projects take around 20 percent longer to finish and the cost overruns are up to 80 percent.
It is also interesting to note that the productivity graph has remained almost stagnant for the last two decades. And this perhaps hints at some deep-rooted problems in the construction practices. Often it is the socio-economic or environmental factors governing these outcomes, but equally prevalent are inaccurate estimates, poor forecasting, inadequate risk provisions and other factors.
Over-enthusiastic ground-breaking
Project owners are always enthusiastic and eager to begin the project. But projects initiated before the actual completion of designs and without properly planned estimates and schedules are doomed for overruns. Faulty budget and schedule can be highly detrimental to the project. Given the highly competitive nature of the bidding process, wrongful expectations are very likely to find their place in the project.
Even though a majority of the issues surface during the building phase but improper groundwork in the pre-construction phase can be the underlying problem. Hence, due diligence during the entire estimating, bidding and RFP process is essential for setting realistic expectations right from the beginning of the project.
Loose contracts
The industry suffers from contracts that generally lack provisions for future changes and delays. The failure to address future deviations in contracts often lead to disputes, delays and unplanned expenditure.
Watertight contracts with defined protocols for change in orders, quality and safety norms and defined schedule can help the project teams in managing problems before they become expenditure. Detailed future-looking contracts while enabling rigorous compliance can also help in establishing accountability where it is due.
Lack of technology interventions
Technology is spearheading efficiency and productivity in every business barring construction where, despite phenomenal innovations, there has been limited adoption. Construction is one of the least digitised industries globally. It is not surprising at all considering that pen and paper documentation, lack of accountability and visibility are still not a rare sight on ground.
Several new technologies and solutions have cropped up that efficiently cater to all aspects of a project. From drone surveying to remote inspections, smart wearable safety equipment to intelligent budget and schedule forecasting tools, notable developments for the construction industry have been endless. Swift adoption and investment in construction technology not just ensure timely project delivery but also helps in establishing traceable data points for the projects to come.
Poor project management
Delivery of projects on budget, schedule and quality is the key performance indicator for any project, and many construction developments may rank way behind on these grounds. Unaccounted change orders, miscommunication, lack of real-time visibility, substandard material procurement and untraceability of accountability, rule the Indian construction sites today. But with robust project management solutions, we can eliminate all these problems.
Real-time visibility into project progress can enable teams to foresee any deviations or delays from the original plan way before it happens and take necessary risk mitigation steps. If nothing changes in the industry, low investor confidence, shrinking profit margins, high financial and emotional losses will continue to haunt.
Proper planning and generous tech adoption are a need of the hour which can also successfully reduce the brunt of the situation while substantially enhancing productivity and efficiency. Moving forward, sound project management is going to be the chief economic driver for the nation, and the rapid innovation and adoption of technology may fuel growth.
