How To Save Money On Your Construction Project
The construction industry has been known to have planning and budgeting issues which have lead to various cost delays. According to a study done, 86% of construction projects have about 28% of cost overruns. What does that tell us? The construction industry is in dire need to find ways of saving money in their projects.
As new trends and technologies enter the construction world, the end result has been more efficiency, less costs and high waste management. Unfortunately, there are still many construction projects that have not still many cost overruns as stated in the beginning. Therefore, we decided to compile a list of ways to save money in a construction project.
Participate in all stages of the planning
In the end it’s you project. You know what you want and if the project does wrong due to poor planning, you will be the one with the most to lose. So it’s essential for you to participate with the contractors and builders in order to know that everything is leading to the right direction.
Various clients do their homework when they hire contractors.It’s best to hire contractors that have optimized their business processes through various technologies that are in the construction industries. Now we are not saying to hire glamorous contractors that have 5D BIM, Drones or VR etc. but just to have a more digitalized structure when they have a construction project to work on.
It is essential that construction managers and contractors work with project management software. This allows for clients to view the entire construction process. Therefore, enabling transparency and accountability.
As information is shared throughout the team there is high collaboration between various parties and updates are spread out in record time. This allows project managers to avoid wrong orders, manage resources and ultimately reduce costs your project.
Constantly monitor key data
Did you know that 95% of the data in a construction project is thrown out or not used at all? This is because the construction industry has not realized the value of data management and how it can bring new insights that may result in cost savings. Once the flow of data is managed, resource allocation and waste management can be better monitored. The resulting effect is cost controls and savings.
Big data technology is being used in also every industry and there are various tools that can bring about valuable insights that are normally ignored. The construction industry also has big data tech in the form of real-time project management etc which are placed to bring the most knowledge out of the data generated.
Consider prefabricated and modular structure
There has been a growing trend of prefabricated or modular construction in the industry. Prefabricated building is when construction is done off site and delivered to the desired location. According to an article in forbes, the delivery time is reduced by a third by only a handful of people.
Getting projects done with less time and labour has a direct impact on the cost of a construction project. One downside is that there is decreased flexibility to update buildings in the field. But that can be fixed through Virtual Reality and BIM technology.
Having virtual design and BIM technology allows to make more accurate design for the project and with more accurate data, the reduction in flexibility can be offset. Clients can also participate.
This is not a solution for every construction project. Therefore, it’s always best to see whether it fits with the needs of the project.
Figure out how much you are worth
The most critical decision one must take at a start of a project is to decide whether to do a project themselves or should a contractor be hired. This decision exists in every situation where there is a construction tasks, let it be a simple home renovation or big building projects.
There are various methods through which you can come up with a decision such as a market-rate method or a cost-based method. According to James Clear, a market rate method is the rate at which you were hired by a company based on your qualification. The amount can be calculated to an hourly basis which will be your worth. In a cost-based method, you will evaluate your worth based on the cost it would take to do a task and how much of it are you willing to pay for it.
Choose your contractor wisely
It always boil down to who you decide to work with. In many cases, people are stuck with poor planners and traditional mindset managers that do not welcome new technologies and change to their work processes. That can be the worst thing that can happen to you.
Managers with such a mindset know the old ways of doing things. The do not optimize their work processes because they truly believe thats how its done or in some cases they do not have the knowledge or skill set to modernize the project.
But fear not! The construction industry is on the edge of a fundamental change. Technologies such as green construction, prefabricated buildings, BIM, project management software etc are forcing the traditional methods out of the industry. The process is a bit slow so you can try to nudge them a bit.
Try to get someone who knows their project management software, respects efficiency and is willing to provide you with transparency and accountability.
It is a well known fact that construction projects cost a lot and are notorious for their cost overruns. With this list we hope that you will be more prepared when taking up a construction project or dealing with the task of hiring a contractor.