Top 6 Construction Project Challenges
/At Surety2000, many of our clients are in the construction industry and associated trades. We talk to them constantly and try to be a good partner in anticipating their needs in regard to bonding. As such, we found this great article that outlines some of the construction project challenges discussed in our office by our team every day and felt that perhaps it would be great information to share. Many of you will recognize these situations and hopefully have learned how to mitigate them or avoid them completely.
There are many potential pitfalls in the life of a construction project. Project managers are tasked with keeping a site running smoothly, safely, within schedule and on budget. Sometimes, this is a very difficult ask.
According to one study, 98% of construction projects come in over-budget and 77% of them suffer significant delays.
So, what is leading to these delays and budget issues, and how can project managers prepare? Here are just six typical challenges facing a construction project, as well as some proactive strategies to curb them.
1. Inadequate Risk Management
Often, project managers put safeguards in place for long-term risk. Short-term issues, however, often are left out of the equation. These issues can snowball quickly and start to have a real impact on the bottom line.
Whether it’s subcontractors that turn out to be unreliable, scheduling conflicts, or the changing tastes of stakeholders, any seemingly small issue could derail a project. Therefore, it’s important to have contingency plans. Build some wiggle room into schedules, and make investments in programs like safety training to avoid any of those potential issues.
2. Lack of Structure
Without clear goals, it’s difficult to get things done in an efficient manner. A construction project can easily fall behind or run over budget (or both) if people don’t have a clear target they need to hit. And without these goals, it’s difficult to hold people accountable for their part in a project.
Performance management is a key aspect of project management. In order to implement this and keep everyone on task, they all need clear tasks to perform. Break down bigger, project-wide goals into smaller, daily targets for individuals to accomplish. If something isn’t done one day, it’s compounded into the next. Keep people accountable through set processes. This way you can keep the whole project from crumbling beneath you.
3. Poor Communication
Communication is an important tool in any profession, but it’s especially important when work is delegated amongst various parties. Without clear and effective communication, important tasks can slip through the cracks and the team can remain unaware of an issue until it’s too late to rectify. Therefore, project managers need to enact clear guidelines.There should be communication up a clear ladder that informs the team of any progress or obstacles at the end of each day. This way, problems can be solved proactively. If in-person meetings are not an option, using different types of software could be an excellent solution.
4. Unrealistic Expectations/Bad Forecasting
Some clients and stakeholders may make some big asks. Whether they want a project completed on an accelerated schedule or on a limited budget, there may be some challenges that come with their expectations. While some things are possible for a skilled project manager, some things simply aren’t. Working with unachievable goals can actually hinder productivity; why exhaust yourself working overtime when you’ll only fall short despite your effort? Some of these expectations are set due to bad forecasting. It could be that this forecasting, much like risk management, focuses on the long-term instead of the short-term. Break those forecasts down into monthly, weekly, and daily goals to see if they are actually achievable. Then, if necessary, communicate the issues with stakeholders. Provide an alternate plan so that they can see an aggressive, yet achievable timeline or budget. Manage expectations from the beginning and you can set up a winning project.
5. Delayed Cash Flow
The construction business relies on invoicing, which can sometimes be an outdated system. And if payments fall behind, it could negatively impact a company’s cashflow. This can in turn dry up a well of funds for other projects and cause delays.
Therefore, systems of invoicing need to evolve. With improved software and enough follow through, construction companies can ensure that cashflow does not affect other projects negatively.
6. Limited Skills
Construction is very much a reputation-based industry. People tend to work with people they know and trust. This can often be a great thing, as teams who know how to work together can be incredibly efficient. But when there is a skills gap in the team, it could cause some delays.
The solution is to be aware of these skills gaps before they have an impact on the project. Once you detect these gaps, you can fill them quickly and efficiently.
