Construction is one of the most competitive industries and is subject to multiple dynamic market forces. The economics of survival for construction firms and the success of individual construction projects depend immensely on proper planning, effective management, allocation of resources, and execution—in other words, solid construction management.
Here are 9 reasons why construction management is important:
- Effective project management.
- Reduces delays, improving efficiency.
- Ensures a project stays on budget.
- Improves communication.
- Ensures quality control.
- Improves safety at sites.
- Promotes a team-building culture.
- Avoids disputes and gives solutions.
- Improves business resilience.
Continue reading and learn why each of these reasons is crucial to a construction project and the viability of a construction firm.
1. Construction Management Means Effective Project Management
As defined by the Construction Management Association of America (CMAA), construction management entails effective management of a construction project’s “schedule, cost, quality, safety, scope, and function.”
While the term “effective management” might sound like a catch-all phrase to describe the benefits of construction management, in reality, it’s a solid stand-alone reason for its existence. Construction management requires understanding multiple skill sets and areas of expertise involved in construction.
In doing so, construction management brings cohesion to different building methodologies, support departments, suppliers, and labor so that all areas work in tandem.
In other words, construction management allows a construction project to be effectively administered and coordinated by functioning in the role of marshaller of forces. Such a result may not otherwise be achieved if a construction project is carried out in a manner that lacks cohesion in communication and purpose.
2. Construction Management Reduces Delays, Improving Efficiency
A construction project will involve multiple phases, beginning with the planning, continuing with budgeting, and moving on to the actual on-site construction and everything involved with procuring materials, labor, and subcontractors. A construction project is ripe for multiple choke points to develop at any of those phases.
Any choke point or delay in a construction project is going to result in added costs. If a team of skilled laborers is present and the material required for their area of responsibility is not present, the project has lost time. Usually, that time loss echoes down the line. If the electrical sub-contractor hasn’t finished, how is the drywall contractor going to get started?
Construction management ensures that the scheduling of every facet of the construction project is coordinated to achieve maximum efficiency. This action results in fewer delays.
Additionally, construction management will also incorporate contingency planning. Doing so means that even when the unexpected happens—a material supplier cannot fulfill their commitment, a sub-contractor pulls out of the project without notice, etc.—there are redundant alternatives built into the process.
With such redundancies, delays are curtailed without necessarily incrementing the budgeted cost. In some cases, having multiple sources for material and equipment can result in preferential pricing in the future.
3. Construction Management Ensures a Project Stays on Budget
In an industry as competitive as construction, where the bidding process often results in operating under very tight margins, staying on budget is paramount for the long-term viability of a construction company.
Proper construction management allows a construction project to stay on budget by being consistently involved from the conceptualization phase of a project to the conclusion of on-site construction operations.
Construction management begins as early as the bidding phase. By analyzing the client’s expectations and reconciling them with the realities of the available construction methodologies, construction management helps identify potential areas of conflict involving potential budget shortfalls, supply chain problems, or unrealistic calculations used in the bidding process.
Additionally, construction management isn’t solely a matter of tracking the expenses of a project. More importantly, it involves participating directly in the formulation of budgets, sourcing suppliers and contractors based on realistic deliverability metrics, implementing proper techniques to mitigate waste and “leakage” of materials on-site, and maximizing the benefit obtained from every cent of every expenditure.
4. Construction Management Improves Communication
Regardless of the scope of the construction project involved—be it a residential build, commercial, industrial, or large-scale infrastructure project—it’ll involve a complex team of people, equipment, and materials.
With proper coordination being fundamental to stay on schedule and within budget, the role of construction management in providing effective communication cannot go unmentioned. The type of communication required for a construction project involves establishing a proper flow and chain of command for communication.
A proper flow of communication ensures that all parties involved in a construction project can communicate effectively. This flow should cover digital, written, voice, and in-person communication. It should also allow for proper synthesis and dissemination of information through these communication channels.
It’s easy for a project to become bogged down and overburdened by simultaneous and nonlinear attempts at communication. Unfortunately, that usually happens when there’s a lack of construction management present. Communication between contractors, workers, suppliers, and engineers becomes disjointed and untimely.
In other words, proper construction management ensures that all communication between all parties involved in the project isn’t only conveyed promptly but, more importantly, understood by those who receive it so that it can become actionable.
To this end, a project management system will develop a proper chain of command to convey communication. That way, information gets to those who need to act upon it directly. It also avoids communication fog, which is when important messages are stalled or improperly conveyed in a bureaucratic maze that results in lost time and compromises the clarity of the communication.
Countless labor hours and budget dollars can be saved when information between the involved parties is appropriately conveyed. Think along the lines of what can happen when a modification is made to a previously planned specification. However, the subcontractor isn’t aware until they have already started work based on the original plan.
Proper communication avoids unnecessary rework.
5. Construction Management Ensures Quality Control
Every construction project aims to deliver an edified structure that meets the client’s expectations and adheres to all standards of safety and quality established by local ordinances.
Unfortunately, the road towards such a goal can quickly become complicated to navigate. The role of construction management in quality control and compliance is to make that road as smooth as possible.
Construction management accomplishes this by laying out guidelines and standards for each project. This quality control process includes preparing and disseminating the guidelines and the procedures required for inspecting and certifying that the work being completed has complied with those guidelines.
By having quality control administered and implemented by a central body, it eliminates the problem of encountering quality issues in one area of the construction site that, in turn, can delay the advances of trouble-free areas. Quality stops being the realm of individual contractors or suppliers—it becomes a project-wide affair.
The quality control role in construction management transcends individual projects. Quality control procedures and guidelines can be developed continuously and adapted to multiple construction projects in the future.
This type of quality control by construction management can also include evaluating and rating the dependability of materials from specific suppliers and the performance and adherence to quality guidelines by contractors and subcontractors. In planning future projects, valuable time is saved, avoiding the sources of potential quality control problems.
6. Construction Management Improves Safety at Sites
A construction site can be dangerous when proper safety guidelines are not in place or when workers fail to adhere to them.
Construction management takes a very active role in construction site safety. It requires doing more than simply implementing OSHA guidelines to do so. Also, it requires designing and implementing a system that can identify potential hazards and systematically mitigate those risks.
Effective reporting systems to identify and isolate hazards need to be managed. Policies and guidelines need to be drafted and distributed to all those who work on the site. More importantly, a culture of safety needs to be cultivated.
A proper safety program for a construction site requires more than just posting warning signage and enforcing the use of appropriate safety equipment. It involves active and proactive steps. By providing a core from which safety culture can emanate, construction management can help improve safety throughout a project.
7. Construction Management Promotes a Team-Building Culture
For some, talk of “team-building” and creating synergy between all involved on a construction project seems like a collection of far-fetched or idealistic ideas that have little to do with the practical realities of the industry.
However, when team building is viewed through a more practical lens, the value that it offers to any construction firm becomes more apparent. Effective team building results in:
Developing and maintaining effective teams across different spheres of influence and construction projects falls under the realm of construction management. The task is accomplished by:
By fostering a team-building culture, construction management can make all of the other responsibilities under its purview more effective, easier to achieve, and leverageable.
8. Construction Management Avoids Disputes and Gives Solutions
When construction management is functioning as it should, one of the results is that disputes are reduced. These disputes include those with clients, contractors, workers, suppliers, and inspectors.
Construction management establishes a set path for preventing disputes and bringing about fast and fair resolution in the instances they occur.
The process that’s used involves taking a systematic approach:
- Avoid disputes in the first place: Adhering to guidelines, monitoring, and validating work, workers, and procedures promotes this end.
- Identify potential areas for dispute: Establish protocols for identifying potential areas of dispute internally before they arise so the company can handle them proactively.
- Optimize solutions: When disputes occur by being prepared.
The third step in the approach described above is vital. When a dispute does arise, improper management can lead to larger losses in time and money.
A key responsibility of construction management is being prepared to mitigate the loss brought about by a dispute. If it’s with a client based on the quality of work or a deviation from the client’s expectation, a solution to satisfy the client while minimizing the scope and cost of the rework required needs to be brought about.
That sort of resolution rarely comes about when the construction firm takes on a reactionary approach. The construction management team needs to ensure that requests for rework are, in fact, valid. When they are, the amount of rework that the firm commits to completing must not extend beyond that which is legitimately justified.
Industrywide instances of rework add nine percent to the total project cost. Construction management’s role in lowering this is of great fiduciary importance.
When the disputes involve contractors, workers, or suppliers, the construction management team needs to liaison with the legal team retained by the construction firm to intercept a cascading level of exposure for the firm.
Additionally, the firm must arduously maintain proper documentation and filing of contracts and agreements to be sufficiently prepared when such disputes need to be litigated.
9. Construction Management Improves Business Resilience
A study conducted by the Illinois Institute of Technology found that 83% of construction companies that failed did so due to lacking proper budgetary controls on projects and a lack of strategic preparedness.
What that study essentially presents is proof of why construction management is necessary to improve the business resilience of a construction firm. Construction management provides those two core necessities that are absent in failed firms.
Construction management equates to improved workflows, improved quality and safety, better adherence to budgets, effective communication, and increased survivability in a competitive industry.
With 96% of construction companies failing before they reach their 10th year of operation, according to the United States Department of Commerce, the improved resilience offered by utilizing construction management methods is evident.