Most builders take an active role in preconstruction, but their approaches (and returns) tend to vary greatly from project to project. In today’s construction industry, investing in upfront planning has become critical to ensuring successful outcomes. These days projects are increasingly complex, schedules are accelerating, and the labor market remains constrained. Not to mention supply chain shortages and price escalations, which have added new layers of complexity to successful delivery.
Preconstruction offers the promise of predictability, enabling companies to avoid costly mistakes and eliminate surprises throughout every project they undertake. Establishing an effective preconstruction process can have a huge impact not only on individual projects, but on the overall success of their business. But for many GCs, the precon team and the workflows they execute are isolated from the rest of the organization, and that creates risk—the very opposite outcome that preconstruction is intended to deliver.
When precon teams are disconnected from the operations and finance teams, it makes it harder for each group to effectively leverage the knowledge and expertise of the other. This adds unnecessary complexities to the process, and hampers their ability to discover, daylight, and resolve project risk early on, which can lead to costly, entirely avoidable mistakes.
Here are six ways an isolated precon team can be a risk to your business:
1. Low collaboration
Construction is a team sport. So when teams struggle to communicate effectively and consistently, the work often suffers. Isolated precon teams lack the centralization, automation, and standardized processes that enable maximum visibility and collaboration between teams and stakeholders. A lack of communication prevents teams from sharing their learnings and data. This opens the door to errors, delays, rework, contractual disputes, and missed opportunities.
For instance, during preconstruction, a team might receive multiple bids and proposals from multiple contractors through various channels like email, phone calls, and project bidding software. Without a system for effective cross-channel collaboration in place, great opportunities can get left on the table.
A major goal of preconstruction is to derisk projects by identifying potential design issues before they become problems in the field. Nobody is better at spotting those problems than field teams, but that expertise often goes untapped during preconstruction. This communication needs to be a two-way street.
When a design question comes up during construction, or a possible change order comes to light, it kicks off a series of activities that are actually preconstruction workflows—like design, value engineering, estimating, bidding, and so on. When precon and ops only cross paths at the handoff meeting, the ops team is unable to leverage the knowledge and expertise of the precon team when they actually need it, and vice versa. In both scenarios the business is failing to leverage its most important resource: human expertise.
2. Inability to fast-track
Time is money in construction, so anything you can do to shorten the time to completion will have a direct impact on your company’s bottom line. However, siloed teams are often unable to meet the demands of accelerated delivery schedules. This is particularly true when it comes to fast-tracking projects, during which preconstruction and construction activities often overlap.
A lack of communication between siloed teams can even result in stakeholders unknowingly working against each other’s goals, resulting in errors or wasted effort.
3. Estimating uncertainty
When juggling multiple projects, estimators face significant pressure to quickly deliver accurate estimates. But the traditional siloed estimating process and outdated technologies can lead to missed deadlines, errors and scope gaps, or even noncompetitive bids. One simple mistake in quantity takeoff can result in underpriced bids, lost business, or margin erosion.
With contractor margins often razor-thin under the best of circumstances, avoiding these problems is essential for long-term profitability.
4. Document anxiety
Project documentation can change frequently during preconstruction, and a lack of visibility into those changes is a common source of angst for contractors. Architects and engineers might make changes to plans or specifications that aren’t effectively communicated to the subs responsible for that particular aspect of the work. These misunderstandings can result in disputes over costs and timelines that can cause delays and added costs.
5. Inefficient handoff
A project handoff sets the tone for the entire job. Inefficiencies in the handoff process, like double-entry across disconnected systems, can create multiple headaches that linger throughout a project’s duration. Poor handoffs can slow work down, create errors, and cause misunderstandings.
For example, during preconstruction estimators might use one system to make their calculations, only to have to manually reenter the information into a project management system or ERP. This duplication of effort can introduce errors and discrepancies that have to be corrected, causing delays and added costs.
Most handoff meetings are a study in inefficient knowledge transfer. Out of everybody on your team, estimators are usually the very first to dive deep into a project’s scope of work and the risk areas involved. There’s no reason a PM or superintendent should have to rediscover what the estimator already knows. But that’s very often what happens when a project handoff is poorly optimized, and that can lead to unnecessary RFIs, cost overruns, schedule delays, or even rework.
6. Low-quality backlog
Many contractors’ backlogs are full, but not necessarily with the projects they want. Siloed teams, technologies, and systems can limit your ability to target and win projects that check the right boxes for your business. Great projects tend to have a few things in common. For starters, they align with the portfolio you’re trying to build and are set up for success from the start. They also typically have great owners, and provide the potential for a solid margin.
Opportunities like this don’t come along every day, and when they do, you naturally want to do everything you can to win that project. That means delivering sharply competitive estimates based on high-quality historical cost data. It means equipping yourself with the pre-planning capabilities that allow you to optimize how you delegate resources like trade partners or your own crews and equipment. It requires laser-focused risk assessment and coordination abilities that help better determine when you should be aggressive with schedule and price and when you should proceed with caution.
When precon teams and their workflows are walled off from the construction, operations, and finance teams, it creates major obstacles to executing a holistic, collaborative preconstruction process. This increases project risk across your entire portfolio.
Siloed teams are at a particular disadvantage when owners demand collaboration-heavy delivery methods like design-build. The bottom line is that investing in preconstruction can provide real returns. This means GCs these days are turning to more collaborative delivery methods and preconstruction tools that foster trust and transparency, and allow them to procure materials and make better decisions, faster.
Technology designed to unite preconstruction, project execution, and financial management solutions on a single platform creates an integrated workflow that connects teams across the entire project lifecycle. The ability to deliver connected, integrated preconstruction services will serve as a major competitive advantage for any project delivery method because it will help mitigate project risk early, fast-track projects, and deliver superior project outcomes to clients.