Why Projects Go Over Budget and a Solution to the Problem
Labor efficiency and productivity are on the decline in the construction industry. As a result, projects are missing completion deadlines and going over budget. There are numerous reasons why projects go over budget—poor project management is one of the culprits. In this short article, our Lakeland construction attorneys will explore more reasons why projects are going over budget and provide a solution to the problem.
Underestimating the Unexpected
Project planning and scheduling are critical elements that directly affect the success of a project. It is easy for project planners to be very optimistic during the planning stages of a project and this may be reflected in the scope of work. However, when construction starts, the unforeseen typically happens and may potentially negatively impact your project budget. This is why performing due diligence in the areas of estimating and scheduling at the front end of the project is crucial.
Some construction firms are embracing technology and have gone digital to better manage their projects. Others have not and still use outdated systems, which is why some firms are struggling with cross-team collaboration, real-time decision making, and productivity. A reliable document management system is crucial for managing workflows, reports, and orders.
The larger the project, the more stakeholders involved. Coordination and communication go hand in hand. You cannot always avoid problems in projects, but you can manage them more effectively to mitigate negative impacts on your budget and schedule. When there is poor coordination, small issues can snowball and not only eat into your profits but also result in major delays.
What’s the Solution?
Cost overruns are a common woe for project managers. If your current processes are not giving you the results you are hoping for, it is time to reevaluate. A track record of projects that go over budget is not a good sign and can blemish your reputation. Projects go over budget for numerous reasons, but it is your duty to identify inefficiencies and correct them if you want to keep your project on track and maximize your profits.
A major solution to this problem is embracing technology and choosing the right digital tools to streamline your building operations from concept to completion. Exploring technology such as new software, materials, equipment, and tools are sure to improve your processes and methods. In turn, your projects will be more efficient and productive. Companies are investing in wearable technology, new prefabrication technologies, predictive analytics for risk management, and data platforms for better communication and connectivity, just to name a few. There will be an upfront investment, but the anticipated long-term benefits justify these expenses.
If you would like to speak with a Lakeland construction attorney, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.