The construction industry has been struggling to finish projects on time, avoid over budget, and fall below its profit margin projections. Among the reasons include poor management of cost, risk, and resources. A study noted that a construction firm might lose as much as 25 percent of its revenue because of labor, delays, and waste costs. These issues often prolong process cycle time, raise costs, and increase client dissatisfaction. Digitizing your construction projects through profit management software is a great solution to mitigate risks.
Construction project management is complex. There are several reasons why finishing a problem on time, on budget, and on specification is not happening. Managing multiple grand construction projects can become overwhelming for contractors. You have to monitor and track many aspects of the project. Add to those issues environmental factors, fluctuations in the costs and availability of construction supplies, and legal requirements.
Using only spreadsheets would not do the work as it runs the risk of missing schedules, overlooked procurement, overspending, and profit losses, to name a few. Adding more applications would not solve it either, as it would take much of your time and energy; when you can spend your time on more significant tasks. Poor information and data management would also worsen these scenarios.
The most economical action to address these issues is to use an efficient profit management software that fulfills all the tasks needed in one place and does more than just scheduling and documenting.
5 Reasons Your Construction Business Should Invest in Profit Management Software
Here are five reasons why you need to use profit management software in managing your construction projects:
1. Ease in Cash Flow Management
Every construction project begins with a cost estimate of the necessary materials to fit the budget. Therefore, it must be tracked and monitored to avoid spending beyond the estimated cost. If this is not prevented, it will be unfavorable for the contractors’ pocket since it will take a significant portion of their profit, leaving them a smaller profit margin.
Sure, numbers such as prices and counts of the required materials can be encoded in spreadsheets but starting from scratch every time can be cumbersome. Imagine doing these inventories and tracking expenses manually for more than one project. While it can do calculations using formulas, it is still limited in generating reports or providing projections without the workers’ intervention. Unlike construction management software with a wide range of capabilities, these concerns in tracking cash flows are taken care of.
2. Improves Time Efficiency in Completing the Project
The proverbial “Time is Gold” is strongly validated in the construction industry. One article cited that it would be costly for contractors if projects are delayed longer because it allows more problems to arise.
Because construction management software has capabilities similar to what people can, it can help project managers unload a favorable amount of tasks. For example, the profit management software AIMHI can produce the required documents for procurement requests in a suitable format based on the data encoded in the software. Thus, project managers or the financial team only need to print or email it rather than go to a word file and write the request again. In short, project managers can have more time for other tasks and further tackle issues that may cause a delay in the completion of construction projects.
In this way, they can speed up processes and completion of the construction while at the same time avoiding expensive catch-up actions.
3. Control in Deploying and Managing Human Resources
Another aspect of construction project management that has a direct impact on the profit is manpower. Hiring only the required number of skilled construction workers such as project engineers, laborers, masons, and foremen is important, among others. It is like anticipating the potential spending on construction materials based on the cost estimates, except that you are dealing with people. If the scope of work is overlooked, the contractor might end up hiring too many people for the job and be obliged to pay them for fulfilling redundant work. Thus, using excellent and reliable profit management software will help the contractors preempt the need for additional manpower or schedule construction workers accurately. It will help them decide whether they need more people to do the job or if what they have for a particular phase is enough in the meantime.
In addition, adopting innovations such as profit management software cushions construction firms from challenges similar to the COVID-19 pandemic, where movements are limited and remote work becomes more prevalent. This is particularly relevant for administrative tasks as they can still be accomplished despite not being present at the office. Meanwhile, engineers on the field can also upload updates straight from the site in an instant through the platform.
4. Prepares for Potential Risks in Implementing Project
Aside from construction materials and manpower, contractors also have to consider other factors that might affect the completion of their construction projects. Inclement weather, accidents, and various untoward externalities may hamper the delivery of materials, and the availability of materials may cause schedule changes.
A groundworks company cited that the construction projects may experience a delay of about 21 percent due to inclement weather alone, which will seriously affect the budget, timelines, and even relationship with clients.
These instances are inevitable. But the contractors can prepare courses of action before it happens. For example, with its Artificial Intelligence, AIMHI notifies the contractors about the weather forecast and suggests the next best activity that can be done within the project timeline. It will also inform the users whether they have used up all of its construction materials so that they can order ahead in time for the next phase or if they have spent beyond what they projected.
5. Provides convenience and efficiency in work performance
Using profit management software in managing construction projects make the contractors’ and project managers’ operations efficient. Because it enables working on different aspects of the operations all in one place, they steer away from jumping from one computer application to another, saving them even more time.
Some profit management software is also equipped with document management capabilities, thus helping organize paperwork such as receipts and contracts. These documents and data are hosted in a cloud that can also be made accessible to an authorized team member or stakeholder. Moreover, construction management platforms allow customizations of forms and other documents, making them responsive to the reporting requirements of the user company. Integration of tools such as accounting-related applications and data storage are also present in other platforms.
Other software also has messaging features to seamlessly communicate with the team, the contractors, subcontractors, and project managers for a better workflow and real-time updates or to clients and other stakeholders for a prompt response to their concerns. It also encourages more collaborations and provides ease whenever there are changes that need to be implemented.
Profit management software is essential in improving the management and operation of construction projects. The automation and accessibility it gives are especially helpful for more prominent construction companies handling multiple projects and supervising many workers. Aside from ease, using a profit management software like AIMHI enables these companies to save money, energy, resources, and time without being deliberate.
With the number of construction management platforms that are currently in the market, contractors must find the best ones that can solve their specific struggles in running their construction projects. They must choose software that does what the project managers see as essential and goes beyond what is expected.
What sets AIMHI apart is that it is more than just a schedule organizer and cost tracker. It is an Artificial Intelligence-driven profit management software that uses real-time and historical data to learn project inefficiencies, manpower productivity footprint, and overall cost behavior. It analyzes the construction project cycle patterns and suggests the Next Best Activities.
Hence, it is designed to inform site engineers, project managers, or company owners on costs, liabilities, risks, profit estimates versus actuals, and insights required to make better decisions. This is to help stakeholders make impactful decisions at a much earlier stage of the project. These insights are designed to minimize unnecessary costs and lower risks, allowing contractors a higher chance of finishing construction projects on time, on specification, and above all, within their desired profit margin.
Despite its advanced and technical-sounding features, its user-friendly interface is unbelievably easy to navigate. It can also show the real-time progress of the project in visually understandable charts and graphs, as well as an interactive dashboard. Any person in the construction industry or in any level of the company can easily make the most out of the platform. It can help them achieve more by doing less. Using AIMHI would allow your construction business to expand and confidently take on more ambitious projects.
To learn more about how AIMHI can increase your profit for as much as 5 to 10 percent, book a demo with us.