Construction Process Audits: A GC’s Key to Moving the Needle

From bidding to closeout, most general contractors will go through some established steps. However, there’s a difference between a loosely understood process and a process that’s been documented, refined and disseminated to the team. 

Having a set process can help newer team members understand what’s required. Even seasoned construction veterans benefit from clearly defined steps they can follow — they save the creativity that would otherwise be required to figure out how to move from point A to point B.

In short, GC firms benefit from established processes (i.e., standard operating procedures). It’s just as true that they benefit from periodically revisiting those processes, or creating new ones as new needs arise. From evolving project requirements to the rapidly expanding world of construction technology, a GC’s processes can often be bettered by integrating the latest available information and resources. 

That’s where process audits come in. 

Why and How Process Audits Benefit General Contractors

When people think about an audit, their minds often go immediately to two words: money and stress. And, certainly, financial audits, particularly external ones, can be anxiety-inducing. But an audit doesn’t have to be a tense process that teams just try to survive.

Instead, audits have the potential to be a useful tool for GCs, helping them zoom out and get perspective. In construction, people often get tunnel vision — usually out of necessity to keep projects moving forward. Staying at a granular level of focus, though, means missing opportunities for improvement. 

It’s worth taking the time to pause and ask: where can the GC firm be more efficient? When the GC repeats processes on project after project, even small gains can add up. Some areas in which an auditing the existing process might yield notable results include:

• Requests for information (RFI)
• Submittals
• Material procurement
• Equipment rentals or purchasing/maintenance
• Closeouts
• Compliance/risk management

Finding ways to shrink response time for RFIs, lead times for materials, or otherwise refine their processes can help GCs move the needle on their two biggest priorities: schedule and budget. 

The 2 Types of Process Audits

Before getting deeper into process audits, it helps to differentiate voluntary audits — with the goal of process improvement — from the type of audit GCs have historically undertaken. 

1. Urgent Troubleshooting Audits

It’s not industry standard to voluntarily audit processes. It is, however, normal to initiate an audit when something goes awry, particularly when litigation is involved. 

These audits aren’t undertaken with the intention of improving things for the GC in the future. Instead, they’re geared toward solving a current problem. Most often, the goal is to uncover information that allows the GC to shift liability from their own firm to another party. 

2. Voluntary Audits

Voluntary audits are an entirely different beast. Instead of the scrambling, high-stress effort of an urgent audit, voluntary audits can — and often should — be rolled into gradually. 

They invite all team members in the firm to take a step back and ask: what’s going on with all of the projects in the queue? Are they hitting their deadlines? Budgets? Where are team members most often encountering internal or external hurdles or bottlenecks? 

To determine when it’s time to undertake this kind of audit, the GC should keep an eye on its key performance indicators (KPIs). Whenever one starts trending outside of the acceptable range, the firm may benefit from auditing the surrounding process(es). 

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Best Practices for GCs Conducting Process Audits

To successfully audit a process  — and achieve meaningful and lasting results from that endeavor — GCs benefit from implementing a handful of best practices. 

1. Set clear goals — and a plan to act on them.

Once a GC has determined that a KPI is trending outside of the acceptable range, the first step might be to take action to correct it. Actually, though, rushing into activity can introduce challenges. First, the GC should pause and get clear on the desired outcome of the audit.

Say, for example, that they undertake an audit because RFIs are supposed to be returned in five days, but consistently average at six and a half days. That audit might have tandem goals: to both find out what’s causing the delay and, just as importantly, to correct it. 

Often, audits are a data-collection exercise. But that can, and all too frequently does, mean a lot of work from a wide range of team members that ultimately results in no change. Don’t just create a report and put it in a drawer.

Instead, from the outset of the audit, identify the desired outcome. How can this make work easier for the team? How can it help projects stay on schedule and budget? Establish a clear plan to move from data collection to action orientation. 

2. Finesse the timing.

In the event of an urgent audit to troubleshoot a problem, fast is usually best. This prevents people from being able to doctor the data, giving the clearest overview of what actually happened.

With a voluntary audit, though, teams often benefit from a slow roll-in. 

Give them advance notice of the upcoming audit and make it clear what will be reviewed. This gives people time to prepare, and makes it easier for them to carve out time for pulling reports or otherwise gathering data. Since most construction professionals work with jam-packed schedules, that time to sort things out is key. 

To make that data collection successful and accurate, it should be clear that there won’t be any ramifications for employees with low-performing data points. Instead, the focus should be on how things can be improved for the organization as a whole. 

3. Get the whole team on board to drive results.

Since “audit” can be a panic-inducing word, when the team learns about an upcoming audit, it might make them think they’ve done something wrong. It’s important, then, for the GC to manage the optics of the process audit. 

Make every effort to make it clear that the plan isn’t to scrutinize individual team members. Instead, the goal is to understand how the firm is functioning as a whole. Beyond that, it’s to find ways to improve processes, ideally making life easier for individual team members. 

Having clearly identified goals and outcomes helps with team buy-in. Since the audit will likely require work for the people involved, showing them the value proposition helps to justify that added effort. To create buy-in, be transparent about what data will be collected and what the firm plans to do with it.

Most importantly, highlight what individual employees stand to gain from this. Illuminating how the process audit can help them save time or avoid headaches should make people more willing to be involved. 

For example, the GC might tell the team that management is aware that many procurement staff members regularly work 60 hours. The goal may be to refine the procurement process so they’re not so overloaded and can get home to their families earlier. 

4. Use existing audit trails — and create new ones.

Auditing a process means working to get as clear of a view of that process as possible. Audit trails help here. Whether it’s filed hard-copy information or digital records, tapping into what data has been captured supports the audit and its desired outcomes. 

In fact, GCs can look for a way to do that without creating more work for their team. In some cases, the permissions and role-based access in the GC’s software might allow the audit team to pull the reports they need on their own. It’s still important to be transparent with affected team members. But avoiding making more work for them is ideal. 

As they undertake the audit, the team should look for ways to automatically create new audit trails, too. The ability to collect and analyze data without human effort supports the GC firm, giving it a better ability to continually refine its processes. 

5. Leverage technology.

Historically in construction, the audit process has been a nightmare that required going through paper files and trying to aggregate things together. Technology can do a lot of the heavy lifting here. 

Specifically, the GC should look to any software it deploys when undertaking a process audit. The data collected, and particularly the resulting reporting functionality, makes an audit much faster and easier. With the click of a button, someone can automatically generate a report that might otherwise have required dozens of employee hours to create. 

Like audit trails, using existing technology is helpful, but looking for new ways to deploy tech is even more so. As the GC audits its processes, finding ways to intelligently leverage technology in its process refinement drives outcomes. 

Take RFIs as an example. Traditionally, those might need to be manually pushed from the subcontractor to the GC, then over to the owner or design team. At each turn, a game of telephone was often played. But with a construction management software solution in place, everyone can clearly see what was asked, what’s already been answered and by whom. The RFI can even automate reminders to the responsible party. 

In terms of process improvement for a GC, tech can deliver better outcomes with less effort from their often already overtaxed team. 

With these best practices, an outcome-driven mindset and transparency with their team, GCs can use process audits to move the needle on their schedule and budget KPIs. When delivering projects on time and with margin cushion gets easier, it sets them up for continued success.

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