Managing a construction project involves keeping track of many moving parts. Whether you’re building an office complex or involved in heavy industrial construction, there are many elements to plan and coordinate. Project owners need clear contract terms, building designs, structured plans, a capable team and the right project management software to execute those plans. Statistics show that 77% of businesses with mature value-delivery processes are more likely to meet their project goals vs. 56% of businesses that don’t. In this guide, we walk you through the decisions and processes involved in construction project management and how to choose the right project management software for your business needs.
Who is involved in a construction project management team?
A construction project management team involves several professionals, including:
The project owner commissions the job and signs off on major project decisions. These decisions include appointing a project manager, selecting project delivery methods, approving designs, setting contract terms, and choosing an appropriate general contractor.
Construction project managers work directly under the owner to handle the minute details of a project. Their main responsibilities are establishing a budget, setting project milestones, optimising schedules, and monitoring job progress. Project managers must have strong communication skills, especially since they’re the liaison between the project owner, designers, and on-site teams. They must also ensure general contractors are meeting regulatory standards and safe work method statements.
Licensed designers refer to architects and engineers who produce construction drawings. Their drawings form the basis of the construction plan, so their work must meet the company’s design brief and budget requirements. Final designs should also comply with local laws and safety codes for construction projects to commence. If properly trained, licensed designers can even serve as project team consultants.
A general contractor is a company that has been hired to complete a specific project. They’re often selected by bidding on a contract with a competitive quote based on market trends and service markups. General contractors employ teams of technicians and subcontractors that specialise in certain areas, such as electrical or plumbing. The primary responsibility of a contractor is to make sure construction work is running smoothly. This means dispatching the right workers, managing on-site worker performance, and mitigating workplace hazards.
What are the six types of construction management contracts?
A construction contract is a legal agreement that project owners use to clarify the general contractor’s responsibilities for the project. It defines the project’s scope, including job descriptions, material and labour requirements, and start and finish dates. The construction contract also sets the payment terms that general contractors can expect from undertaking the project. Here are the six different types of construction contracts:
- Lump-sum contract – A lump sum contract is where the project’s entire cost is agreed upon before the project begins. This type of contract can be challenging to manage as there are no incentives for the contractor to complete the project on time.
- Cost-plus contract – A cost-plus contract is where the contractor receives a payment that includes a percentage of their costs and a percentage of their profit. This type of contract is more common among smaller-scale projects, such as renovations.
- Guaranteed maximum price – Under a guaranteed maximum price contract, the contractor is paid an amount agreed upon by both parties. If they complete the project for less than the maximum price, they receive the remaining funds. However, if they complete the project for more than that amount, they have to pay back any excess.
- Time and materials contract – This type of contract is where the contractor is paid for the time and materials they spend on the project. There are no agreed-upon prices or deadlines.
- Contingency contracts – A contingency contract is where the construction manager specifies that a certain percentage of the project funding be kept aside for unforeseen circumstances. This ensures a financial safety net to resolve issues that may arise during construction.
- Unit price contract – This type of contract calculates prices based on estimated quantities of materials and labour prices (e.g., hourly rates). A final price is then agreed upon based on the total units required to complete the work.
What are the delivery methods for construction projects?
Interactions between project owners, managers, designers, and contractors will vary depending on the delivery method used. A construction project can be delivered using one of the following methods:
This is the most commonly used delivery method for construction projects. When architects and project owners develop the design, general contractors bid and negotiate the price for the project. If all parties agree on the price, the general contractors commence construction and a project manager monitors their progress.
A dedicated contractor is hired to take on all three responsibilities: design, construction, and project management.
The construction manager leverages their professional expertise throughout the entire project. They provide designers with feedback on a build’s practicality and feasibility and supervise operations to ensure the project doesn’t go over budget.
The project owner creates a joint contract to be signed by pre-selected architects, project managers, and contractors before the project kickoff. This encourages early collaboration between project stakeholders and makes it easier to align each entity’s goals throughout the project. This type of project delivery is popular among private companies that want to reduce delays in the planning stages of complex building projects.
This is a project delivery method in which public entities contract work to private companies, usually involving the construction of public infrastructure or community housing. When public companies finalise designs, private companies have full control over the construction project, provided they meet key deliverables, deadlines, and budgets.
What are the unique challenges of construction project management?
Many challenges can come with construction project management, and it’s essential to establish a comprehensive plan and standards early on to prevent sudden change requests. If changes in the project’s scope are inevitable, project managers must keep everyone in the loop regarding these changes.
Misalignment between a technician’s skills and the project scope is another issue. If jobs are assigned to the wrong teams, projects can veer off course, and work quality may suffer. What’s worse is that many contractors use traditional spreadsheets to manually track their team’s skills and workload, which is highly inefficient and error-prone. Misunderstandings between multiple contractors can also lead to delays and cost overruns. Project management teams must stay in sync through regular meetings, updates, and open communication channels to minimise such occurrences. They also need to keep everyone accountable through daily reporting and progress tracking.
Workplace health and safety risks are also a significant hurdle when managing construction projects. Project managers and contractors must identify all the potential sources of risks and develop a plan to mitigate them. The plan may include enforcing safe work method statements, providing personal protective gear, and installing proper signage.
What is the standard approach to construction project management?
The following are the different processes involved in construction project management programs.
The initiation process is where project management teams examine the project’s requirements and determine whether these are feasible. Project managers need to analyse the design, costs, timelines, and skilled labour needed to complete the project. The proposed project must make sense from a financial and practical standpoint to justify its initiation. For instance, if a building design is too complex for the project’s budget, architects may have to go back to the drawing board. Alternatively, if contractors are incapable of completing proposed projects by initial deadlines, teams may have to adjust project timelines.
The planning process begins when a project has been greenlit. During planning, project managers assess the scope of the job and set a budget for the materials, equipment, and labour. They then establish schedules and outlines for the different milestones and tasks involved in completing the project. Project outlines usually clarify material procurement, site inspection protocols, installation and building procedures, and risk management strategies.
Additionally, the planning process is when project managers assemble their team for the job. This means assigning and dispatching contractors and builders that have the right qualifications, experience, and availability.
In the execution process, contractors and builders put the plan into action. If there’s a comprehensive project plan, staying on track should be fairly straightforward. Contractors should have detailed instructions to meet project milestones as well as for procuring the necessary materials for the build. On-site workers should also submit regular expense reports, timesheets, and even on-location photos for quality assurance purposes.
The project manager watches over the project to ensure that everything is proceeding according to plan. Project managers and contractors will need to have a system to track project progress and quality assurance. The system could be a centralised project dashboard where managers can get a high-level view of reports and job performance. The monitoring process also involves tracking expenses, adjusting schedules as needed, and dealing with unexpected problems.
The closing process is the final stage of construction project management. Once the project is completed, the project manager conducts final quality checks, pays all contractors and suppliers, and ties up any remaining loose ends. What’s more, project managers will need to compile a final report documenting what went well and what could be improved upon for future projects.
Desktop vs online construction project management software
When choosing construction project management software it’s important to consider whether to use a desktop or a cloud-based version. Desktop software offers better control over backend configurations and allows users to manage projects without an internet connection. However, desktop software doesn’t grant users mobility like its cloud-based counterpart.
On the other hand, cloud-based software gives teams the ability to work together no matter where they are. Data is also stored in a centralised cloud database, allowing managers to get real-time insights into on-site operations. Plus, cloud solutions are proactively managed and updated by IT experts, so users can enjoy the latest features and smoothest experience possible.
How project management software provides a solution at every stage of a project workflow
Cloud-based project management software is ideal if your business requires instant notifications, GPS tracking, job automation, scheduled reports, or other technology-driven solutions. Technology doesn’t just change the way projects can be managed; it can also improve every stage of a project workflow, from estimating to invoicing.
Your project management software should simplify estimating by providing an easy way to calculate costs, make updates, review approvals and email customers, all from one centralised database.
Project management software helps break down the resources needed at each project stage so that the process moves along faster. This allows you to:
- Quickly refer to the bill of materials from the estimate, allocate inventory and raise purchase orders.
- Track and approve change orders and allocate resources.
- Track backorders and receipt items.
- Raise and issue work orders for technicians to complete specific parts of the project.
- Allocate technicians to different project stages directly from a drag-and-drop scheduler.
Solid project management software should be able to help you manage requisitions and purchase orders, handle procurement scheduling, shipment expediting and supplier evaluations.
Good tracking practices involve regular monitoring to see:
- How team members are performing.
- Where bottlenecks might be occurring.
- If milestones are achieved.
- Where estimated versus actual costs stand.
- Financial factors that may affect the project budget.
Your project management software should automate project invoicing to ensure invoicing stays organised and accurate. It should also help streamline your invoicing processes, from managing deposits and retention claims to approvals.
WorkBuddy can help with project invoicing by enabling you to send one final invoice when a project is complete or send a progress invoice at the end of each project phase. There are three main ways to invoice in WorkBuddy:
- Progress invoicing
- Retention claims
- Deposit invoicing
Overall, your project management software should help managers schedule resources more efficiently, track projects, identify potential risks, and keep workers safe at every stage of the project workflow.
Typical project workflow
What features should effective construction management software have?
There are many types of construction project management software available, and the most effective ones usually come with the following features:
Dashboards give project managers a high-level view of job progress, expenses, and other key performance indicators. Custom project portfolio views in WorkBuddy give managers a complete overview of a project’s progress. Managers can view projects, control user permissions and know which projects to prioritise.
Project templates are a quick way to standardise creating projects that you do regularly. With WorkBuddy, you can save time with pre-configured project templates for standard jobs. Predefine templates based on how you structure a project, create unlimited templates and automatically convert the template into a job for actioning.
WorkBuddy provides a centralised storage space for critical project documents, allowing you to store:
- Certifications and Licences from Contractors/Employees.
- Evidence related to a specific job i.e. photos, electronic signatures etc.
- Completed digital forms created with WorkBuddy and preconfigured merge templates.
- Compliance requirements for a specific job or task.
- Workforce compliance documents.
- Record of invoices, quotes and purchase orders.
- Log of time spent and activities that happened on a job.
- Contact details of suppliers and clients.
- OHS documents i.e. Safe Work Method Statements
Managing change orders
Change orders can be managed in a project management system by linking them to the original estimate or as a separate estimate depending on requirements. Tracking change orders ensures you are billing for all project costs, makes it easy for customers to review and approve changes and streamlines the entire invoicing process.
Job scheduling helps project managers and contractors assign jobs to the right people. WorkBuddy allows dispatchers to choose the way they schedule and allocate jobs based on:
Integrated messaging systems notify people of upcoming tasks and deadlines to prevent project delays. WorkBuddy uses status updates, activity posting and mobile push notifications to keep the lines of communication open with all project stakeholders.
Breakdown projects into individual jobs
Breaks down the tasks involved in each project milestone to keep contractors on track. With WorkBuddy you can break down projects into individual jobs based on the type of work that needs to be done. This allows you to dispatch different trades, track all jobs back to one project and break down projects into multiple tasks.
Timesheets and tracking
Time tracking allows workers to record their time on a project, which can then be used for billing and cost calculations. With time tracking in the WorkBuddy field app, field workers can easily clock on and off for the day, allowing you to:
- Track how much time your field workers and contractors spend on active jobs or projects.
- Always know exactly how many hours your technicians are spending active.
- Review and approve submitted log of timesheet entries.
- Track start and finish times on a job or project.
This enables project stakeholders to create reports, share files, and communicate seamlessly with their team. In the WorkBuddy client portal, clients can design their own work request form and allow users to raise new job requests, view appointments and search, sort and track work orders on mobile or desktop.
Gives project management teams the ability to stay in touch from any location. WorkBuddy combines cloud-based software for the office with our mobile field app for technicians to deliver superior office to field connectivity.
Analyse projects performance with Power BI
With a Power BI integration, you can evaluate the overall execution and performance of the project to facilitate better decision-making for future construction jobs. In WorkBuddy, you can view in-depth project analysis using our Power BI integration. Create custom reports and dashboards, get into the detail of organisation performance and always be informed to make the right business decisions.
Business reports provide important details that can be used to develop future forecasts, guide budgets and improve decision-making. Customise your reports in WorkBuddy to see where your business is most profitable. Typically there are three main reports that can assist you with project management:
- Work in progress (WIP): WIP report shows the status of open projects that have not yet been fully invoiced.
- Cost to complete: A detailed estimate that identifies the total cost of a project then deducts the cost of works that have been completed to date.
- Production control: Tracks costs and income over time, view project productivity and determine practical completion percentages versus invoice percentages.
We predict that the gap between organisations that establish project management practices and those that throw caution to the wind will only grow. If your trade or construction business wants to increase its chances of success by exploring construction project management software, the best time to start is right now with WorkBuddy. Our software can help you efficiently manage projects to save time, money and headaches. If you need help managing tasks, collaborating on upcoming projects, or staying connected on the field get in touch today.
Book a demo today to see how WorkBuddy can help streamline your project management processes with project management software.