The Increasing Importance of KPIs in Managing Commercial Construction Project
KPI, short for Key Performance Indicators, is a crucial tool for measuring the effectiveness and success of various aspects of a project. For those unfamiliar with the term, KPIs are an effective method for assessing the degree to which objectives are achieved. In the context of managing commercial construction projects, KPIs are instrumental in evaluating how well construction initiatives are executed. Moreover, the insights gained from KPIs can be valuable for planning and initiating new commercial building ventures. Understanding the importance of KPIs helps ensure that construction projects are completed efficiently and meet the desired performance standards.
Understanding and tracking a variety of KPIs aids construction firms build long-term resilience and reaching short-term financial targets simultaneously. A highly effective method to monitor KPIs can be accomplished using software for managing projects. The software is packed with features for managing projects that help project managers follow and monitor each particular project detail.
Construction KPIs will assist any business owner in understanding how different companies perform in an individual construction project. Here are three important areas to be considered:
- Construction Project Manager
- Construction supervisor
- General assistant and the quantity surveyor
Tips For Creating & Using Project KPIs Effectively
Keep your KPIs simple and targeted
The templates for managing project KPIs are helpful, but KPIs must be S.M.A.R.T: specific achievable, quantifiable, and timely.
Make sure you choose your measures with a purpose
Many organizations track things just because they have to, which can lead to an excessive amount of insecure KPIs. We suggest tracking only the most important metrics that are relevant to the goal you’re trying to accomplish. If you cannot explain why a certain KPI is crucial, it’s an adequate reason not to track it. Be aware that the higher the number of KPIs you’ve got, the greater the effort required to present information on them.
Always include the Goals
Companies that are just beginning to use KPIs may feel the lack of data to establish an accurate goal. But working without a specific target can add a certain amount of uncertainty to the measure. How can you determine if you’re doing a good job or not? We suggest choosing KPIs so that you can determine an appropriate target by analyzing studies in the field or data from the past.
Be aware of when to stop the use of a KPI
If you’re not using the KPI when making decisions for your company or having a strategy gathering, this could be a sign that it’s not worth keeping track of. You may be putting excessive effort into trying to measure things that aren’t providing the value you need.
Safety
Putting safety first on the job is essential due to the importance of both short-term and longer-term benefits. When you invest in workers’ safety of workers it’s less likely to have problems like expensive insurance costs or other unexpected expenses. Knowing why safety is a crucial KPI is vital to keeping your employees safe and cost-effective, efficient content. Here are some crucial construction KPIs concerning safety at work:
- Safety/incident rate
- Number of safety meetings/communications
- The Number of incidents per provider.
Quality Control
Improving the overall quality of your work is a crucial aspect of avoiding the possibility of making changes later. It is crucial to prioritize quality measures to ensure that your project is within budget and on time. Many companies with an enterprise level have employees on their team to ensure quality control is in places, such as architects and engineers. Since it is crucial to pass all inspections, having highly trained employees on your team can ensure a high percentage of inspections that have been passed total. This is a crucial KPI to measure how good the work is and impacts the reputation of a business.
Construction quality KPIs may be:
- The number of defects
- The time needed to correct the flaws
- Customer satisfaction
- Cost of rework
Bottom Line
It’s often comfortable and sensible to use financials to measure. Was the project over cost or budget? How much was the yield for the most recent sale or the return on investment for that primary investment?
When it comes to high-level indicators, C-suite and owners’ teams alike tend to focus on dollar numbers. 43% of construction companies focus on satisfying short-term financial targets instead of achieving lasting operational efficiency.
It is important to note that many of the major home builders and the leaders of building products have reliable ways to measure the crucial indicators. This means that executives, vice-presidents of construction and project management, and superintendents of local and regional builders and building material companies might discover these KPIs an excellent way to get started tracking more effectively shortly.
