“Fast,” “good,” and “cheap”...you can pick two. This may sound like the punchline to a joke to people outside the construction industry, but insiders are all too familiar with this limited measure of construction project performance.
Contractors know when they start a project that cost will most likely be the primary driver over efficiency, with quality often coming in third. How firms measure these priorities or judge success against them has had few standards in the past. While many successful firms are now using construction software for construction project performance benchmarking, industry-wide standards have yet to emerge. That, however, is quickly changing.
‘Par’ Is Coming to Measure Success in Construction
Just as power tools completely altered the way most trades were done, construction management digital and software tools are now altering the landscape of construction project management.
With this seismic shift already underway, soon there will be no looking back. Developments in construction technology are now inevitably creating a new data-rich environment that will assist and change decision making.
You’re probably familiar with the concept of par, as it relates to golf. Par is the number of strokes a player is expected to take to get the ball into the hole. The number is right there on the tee pad, as well as the scorecard, so everyone knows what it is and players know what to expect and how to play the hole. It makes it easy for competitive players to evaluate performance and, more importantly, improve.
Professional golfers keep detailed records of their performance because they know how important it is to track the development (or decline) of their skills. This is the same for any professional athlete. Stats matter when you’re in competition and improvement is the difference between staying afloat or rising above.
Par = a set standard. In golf, par is the number of strokes you are expected to take, under average conditions, to get the ball into the hole.
Construction KPIs are Bringing ‘Par’ to the Industry
In business, statistical recording and comparable performance data are becoming as equally as valuable as in golf. Key Performance Indicators (KPIs) are a common industry standard used to “benchmarks” companies. These KPIs are increasingly meaningful to us as customers, as they create transparency and help us weigh one option against another.
Its valuable inside the industry and in individual firms as well, for the same reason as it is to golfers looking to optimize their game. For example, manufacturing has consistently become more efficient, faster, and cheaper, year after year. This is because tracking KPIs and optimizing processes to achieve ever better numbers has become the name of the game.
A study commissioned by Autodesk with Dodge Data & Analytics revealed seven KPIs for Construction, which few firms are measuring, yet most construction professionals agree provide an opportunity for concrete benchmarks for construction project performance. The study examined how contractors and trade professionals are currently operating around some common project processes. It found that 50% of contractors do not consistently capture and review project data, but that the majority desire to do so.
Until recently, there hasn’t been an efficient way to establish any kind of ‘par’ or construction KPIs for activities such as quality or efficiency. The abundance of construction technology connected to the cloud is now changing that.
Digital tools are providing the opportunity and the capability to collect information across all stages of construction project management. Everything, from the specific details of a subcontractor’s performance and the daily cost of general conditions, to the overall efficiency and safety of a given project are now available at the fingertips of anyone involved in construction project performance.
As this data continues to be aggregated, the industry will be able to establish a meaningful set of construction project benchmarks based on factors that used to be lost in the vagaries of the process. Industry leaders will have clear construction KPIs, not only for safety, but also for cost, quality, and performance.
Construction KPIs are giving us new industry-wide standards
How Par Helps Construction Project Performance
Construction software is thus leveling the playing field in many parts of the construction and preconstruction process. Now the opportunity is to take all of the information these digital tools are creating and use it to better understand construction project performance - both on a single project and across the company.
It's all about using the information your digital tools are generating for construction project management and benchmarking. Information on past projects allows contractors to actually see how they performed, beyond the typical success metrics of margin, safety, and client satisfaction.
This helps contractors answer the question "how and where do we improve?" The companies who embrace this opportunity will not only benefit, but blaze a trail forward in the industry.
Like the first carpenters who saw the potential in electric circular saws, we all have a chance to reach for a new tool and adapt our process to its use. These tools will help refine skills and create awareness around areas of improvement in individual firms and across the industry.
It’s a choice, but the right choice is quickly becoming very clear. The winners will be the organizations who are evolving, learning to use technology to become more efficient, to track quality among their subs, and to establish their own handicap.
Overcoming Challenges to Construction Project Performance With Benchmarking
Setting construction KPIs for quality, cost, and schedule means that if you can beat par, you’ll have a competitive advantage
Once par is established, everything changes. Setting construction KPIs for quality, cost, and schedule will mean that if you can’t meet par, you’ll quickly be out of the game. Of course, it also means that if you can beat par, you’ll have a competitive advantage.
It’s important to acknowledge that aggregating this information and using it as a tool can be challenging for contractors. Many are likely using several different tools and technology that are generating information, but without a comprehensive plan for information management and analysis, it's difficult to extract it and use in a meaningful way.
For this reason, we advise our customers to start small - focusing on something such as looking at the root causes of change orders across multiple projects. It once was a manual process, but construction technology providers are working together to create integrations that allow contractors to more easily work with the tech they have. Now it is easier than ever to create a single source of truth and keep all project information in one place with digital access for all.
Click on the image below to view our interactive infographic explaining the 7 Construction KPIs you need to know
Additionally, Autodesk has created the Construction Health Check – a free 15-minute assessment that measures if your current processes give you the proper data to measure and maximize performance to reduce risk, avoid downstream problems, and improve quality.
Want to see how you stack up?
Take a few minutes to assess your “digital health” and check how your current processes measure up against others in the industry.