Time to Institutionalize Your Company’s Cost and
Productivity Knowledge

Knowledge Management

For any construction-focused organization – be it on the contractor side or the owner side – cost and productivity knowledge is undeniably critical to success. When you boil it all away, project controls are all about setting proper expectations and measuring the outcomes. Doing that well requires an understanding of the key drivers of cost and productivity, which leads not only to a successful project but also to lessons learned that can be applied to the next project.

Expectations = outcomes. That’s the simple promise of any team charged with successful project delivery. Set realistic expectations – in the form of estimates, forecasts, schedules and work plans – and then measure progress in such a way that allows for rapid course corrections when needed. On both sides of that equation, applied knowledge of the influences on cost and productivity for a particular construction operation can make all the difference.

THE KNOWLEDGE management CHOKEPOINT

For most companies, that knowledge starts off largely in the heads of the founders, honed through many years of experience. At some point, having that knowledge constrained to only a few individuals becomes a chokepoint on growth. Even for larger firms, it limits how quickly the organization can respond to issues, as well as how many projects can be taken on without undue risk. The most successful firms are those that figure out how to scale that knowledge with a knowledge management system.

So, if making cost and productivity knowledge explicit in an organization is fundamental to success, how exactly do you do that? One option is to hire more people who bring that knowledge with them but, of course, that takes a tremendous amount of time, adds significantly to overhead, and still leaves the organization vulnerable to employee turnover.

There is another option, and that is to take steps to ensure that the cost and productivity knowledge developed through the course of every project is captured and made accessible to everyone in the organization. The experience gained from every project is pure gold, and you’re already paying for it on every project you complete. But in most companies, that knowledge stays trapped in only a few people’s heads or, at best, in spreadsheets that nobody understands aside from the person who created them.

THE “BLOCKING AND TACKLING” OF PROJECT CONTROLS

Software tools like those from InEight recognize that successful cost and productivity knowledge sharing requires a consistent and systematic way to model expectations. Certainly, the models have to give you the expected result, but they also have to capture the parameters (the assumptions) that drive that expectation. In other words, if you’re pouring a concrete foundation, you need a model that yields the cost, duration and man-hours expected to be incurred for that operation, but also one that captures the variables that went into that assumption, such as dimensions, specs, site conditions and other factors.

By measuring actual results against those expectations, you can further refine the models to become more accurate over time. Through this process of benchmarking, with access to experience-validated models that capture the results and the variables, everyone on the team suddenly gets “smarter”. Anyone involved in budgets, forecasts, change orders, schedules, “what if” scenarios and contract management can plug new assumptions into the model to see the expected results.

The ability to create parametric cost and productivity models, and then benchmark the results, is a fundamental component of InEight software. Indeed, you could say it’s the blocking and tackling of a modern project control solution.

Learn more on how InEight’s portfolio of project management solutions can help you increase efficiencies on your next project