The sophistication and complexity that define modern capital projects demand fine-tuned construction workflows that will keep tasks and data moving smoothly along the construction continuum.
The challenge is when those workflows, once underway in the field, don’t align with the schedules and costs outlined at the project’s outset. Because despite all the careful workflow planning and standardizing, the reality is that such projects remain dynamic in nature.
Methods may not be aligned with reality
It may come down to the schedule and cost progress methods being used, which may need to be more dynamic for the projects and tasks being tracked. And that begs a few questions:
- Can those methods consider timeline and budget data from past projects and industry benchmarks to inform workflow development in the planning stage?
- How do you know if a task is on track to be completed by a specific date for a particular cost?
- Are the specific schedule methods and cost progress methods you’re using able to reflect what’s happening in reality?
- How on or off target are they?
- How easily can you adjust them for evolving details or changing conditions?
- How accurate are your progress reports?
Without real-time data to answer these questions, there will likely be an ongoing disconnect from reality. But while this is still a common scenario, things are slowly changing. More and more projects are meeting their established outcomes thanks to the digitalization of construction workflows and individual tasks — and the access to real-time data they provide.
According to the InEight Global Outlook Report published in June 2023, construction firms are achieving their schedule and cost goals primarily due to past project data and industry benchmarks that lend realism to project planning. But they’re recognizing they can take it a step further with current connected data that delivers ongoing project insights into the interaction among scope, cost and schedule.
Leveraging connected schedule and cost data
Contractors are leveraging the power of that current connected data through two efficiency metrics found in the earned value management (EVM) performance tracking method: schedule performance index (SPI) and cost performance index (CPI). EVM, updated by constant inputs from the field, calculates schedule and cost metrics so stakeholders can always know project status and progress.
SPI indicates how well a project is spending time in relation to what was planned before the project started. It’s expressed as a simple numeric value representing a percentage. Values greater than 1 mean timeline efficiency is ahead of schedule, equal to 1 is on target, and less than 1 is going to have to play catch up.
CPI shows how well money is being spent compared with what was originally planned. Like SPI, it’s a numeric value indicating a percentage. A CPI greater than 1 means the project is faring well because it’s below budget, equal to 1 is on budget, while less than 1 is a sign of inefficient spending.
Both are sensitive to project-impacting events or changes, causing immediate fluctuations in SPI and/or CPI values. Fluctuations can be a subtle ebb and flow or a sudden spike or plunge. It’s when they veer outside (but especially below) their normal operating ranges established at the project’s start that these metrics flag that there may be an influence or risk factor warranting cause for concern or at least some attention.
Many people might associate these risk factors with external events such as supply chain bottlenecks, material price hikes or severe weather. But they can be internal ones that might seem less obvious, like scope creep, change orders, absence of contingency plans and site crew productivity.
It’s the high level of responsiveness of these two performance metrics that makes them so actionable — a tool to rely on to realign construction workflows when needed. EVM can forecast what SPI and CPI values could be when details of specific “what if” risk factors, influences or corresponding contingency plans are input. Those resulting values serve as a foundation for data-informed, collaborative decisions that risk-adjust workflows so the project remains on track. Those decisions can involve reallocating budget or labor resources to underperforming areas, resolving delay-inducing bottlenecks, or launching contingency plans to better address forecasted threats to the project’s progress.
Connecting through integration
While SPI and CPI can be calculated manually or through traditional spreadsheet programs, they are more reliable and effective when using construction software that offers this calculation functionality. Point solutions offer this functionality, but they fall short. How? It all goes back to being connected.
Construction workflows aren’t siloed processes. That means disconnected or incompatible point solutions can neither reflect nor inform those workflows reliably. Modern capital projects require efficient workflows that depend on real-time data stakeholders can access and act on. A cloud-based integrated project platform can provide this.
Such a platform centralizes schedule and cost data, allowing it to flow seamlessly across processes and business functions without needing back-and-forth redundant data re-entry. It provides unprecedented real-time, end-to-end visibility into status and performance metrics, ensuring stakeholders have the up-to-date schedule and cost information they need to make proactive workflow adjustments.
There’s a higher degree of data confidence with an integrated platform. And, ultimately, that can mean more project certainty in achieving established cost and schedule outcomes. Interested in learning more about aligning schedule and cost methods with actual construction workflows for improved outcomes? Schedule a brief conversation now.
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