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September 26, 2022
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Why you need to quantify the risks hiding in your project management system

Why you need to quantify the risks hiding in your project management system

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Every day, every modern construction business collects data, but how effectively are they using it? Hidden in those daily logs, RFIs, and observations are indicators of risk both small and large — but without a way to efficiently collect and evaluate them, no business can truly say that it is managing its risk as effectively as possible.

Whether you collect your data via Excel, a dedicated project management tool, or plain old pencil and paper, there is information your business needs in every document and report.

For example, your daily logs capture important trends like project acceleration or delays, which affects overtime, end-of-job crunch, and other important factors for any job. And RFIs expose design discrepancies, field conditions, and coordination issues that may necessitate replacement costs or extra hours.

But how are you surfacing, collating, and finally quantifying that data into a dollar or time value you can actually use, and with a fast enough turnaround to make a difference?

Quantifying risk is incredibly important, because it lets you and your team prioritize your time and attention, identify outliers and take action, and perceive patterns and trends that could affect future decisions or help you better predict costs. But the actual process of risk identification is often costly and time-consuming.

Let’s do a little napkin math: Say you’re a contractor working through about 6,000 RFIs per year that have cost or schedule implications. That means your staff needs to examine individual documents, create an item in a spreadsheet or tool to track it, attach relevant data, and estimate or solicit pricing thousands of times. If each occurrence takes 10 minutes, that’s 1,000 hours by PMs and APMs — time that could be used putting the results to work rather than getting them in the first place.

Setting aside the obvious benefits of keeping your skilled workers on valuable tasks rather than rote data entry, improving the process also helps your project and financial teams stay in sync. The on-site team may see and understand the implications of the daily logs, but unless they are in constant communication with the financial team those insights may come too late to take action on.

The data is there — you already collect it. But as we all know, what’s important is not the resources you have, but how you use them.

Learn how HITT Contracting found a way to keep owners informed and enabled project teams to get ahead of risks.

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