Administrative costs in construction projects

Budget overspend and time overruns in construction are often solely put down to the obvious - unaccounted scope changes, inaccurate project estimates or avoidable design errors.

While all these factors are certainly a major contributor to unprecedented project delays and expenditure, poor asset tracking, or the lack of such, can be equally destructive to site productivity and the root cause of most administrative issues found in the construction sector.

Costly administrative errors and the inability of your department to function to its full capacity can ruin a project as easily as a last-minute scope change. Therefore, timely and adequate admin management processes should not be ignored.

In this blog, we look at the specific challenges presented by poor administrative processes within the construction sector, the impact that those could have on your business if left unmanaged, and how you can minimise and/or completely remove them through asset tracking.

This blog article is one in a series developed to share knowledge and equip you to get even more out of your tools and staff. Read the other articles here. 

Which are the main administrative challenges found in the construction sector?

Mistakes are easily made when administrators lack effective communication between each other. Problems that occur on one aspect of a project, may not even become known to other project managers until it’s too late - even small administrative errors can lead to catastrophic results.

Below we examine the three most commonly found administrative challenges shared by our clients.

Probably the biggest challenge when it comes to administration within the construction sector is the use of physical paperwork and the lack of its adequate management.

Paperwork is used everywhere, from offices to construction site environments, and is the main method of communicating project changes, inventory levels, asset location and movement across personnel and sites, as well as the sites level of safety and compliance with regulatory obligations.

Knowing where your assets are at any given time. Knowing that they are compliant and tested regularly as per safety regulations. Knowing your employees are trained and hold the necessary certifications to do their jobs within the law. All these rely solely on the ability of each member of your team to manually fill in the relevant documentation and ensure it’s been timely delivered to the right people for processing. You can already see the rock that starts the avalanche rolling, can’t you?

A lot of responsibility lies in paperwork and often serious mistakes are made when it’s not managed properly, especially when documents have to be managed on site, where the main priority is getting the job done and everything else comes second.

Paperwork related challenges:

• Issues with paper asset transfer and asset requisition forms
• Not knowing where assets are and who has them as a result
• Wasting money on hiring assets that you already have in place, but can’t be found
• Buying duplicate tools and building up excess stock
• Non-compliance of people and tools on construction sites
• Fines for overrunning project timescale
   

It is often the case that companies need to have a good level of understanding of what their inventory looks like at any given time and what stock they’ve got on the shelves. This tends to be processed manually, making the job extremely tedious and time consuming, and sometimes even impossible to do in the first place.

Inventory can be the cause of both going over budget and over time on your projects. This could be due to two different reasons. One being running out of needed stock, therefore, causing operational issues and unnecessary downtime waiting for supplies to arrive and be available to use. The second challenge usually directly related to going over budget is buying unnecessary stock because of lack of visibility of what you already have in the warehouse.

Safety and compliance is an ongoing issue for the construction sector. Latest statistics by the HSE show that the sector is actually occupying second place for the highest number of workplace injuries, only preceded by agriculture, and is actually leading the list when it comes to workplace fatal injuries.

Poor administration and lack of visibility over compliance can have serious impact on the level of safety on your construction site. The two crucial challenges that no company can leave unresolved include:

• Managing employees’ training qualifications and certifications
• Managing inspection and maintenance regimes

Both can easily slip out of hand, leading to serious consequences, such as project overruns, damaged reputation, prosecution due to non-compliance, limitless amount of fines, and in the worst case scenario, jail time for duty holders.

Is there a solution?

Many contractors believe that the best solution for bad administration is to simply increase the size of the administration team. However, increase in staff numbers doesn’t necessarily mean better results and in most cases only leads to further costs and higher risk of collaboration failures.

Instead of adding more to your admin team, equip them with the right tools. Latest asset tracking software can play the role of multiple administrators, giving you the ability to view a project from multiple angles.

With extra digital support, administrators will have an easy way to communicate with each part of the organisation and have full visibility and flexibility to keep operations and logistics running smoothly. In the following chapter, we look at the specific details of how asset management software can help you lower your administrative costs and solve major challenges.
 

How can asset management help you reduce administrative costs?

Companies tend to spend 20 hours a month administering training certificates, work permits and safety data sheets. By using asset management software, you could slash this time by 33%. On the other hand, automated renewal reminders can cut 90% of time, otherwise spent to monitor due dates monthly.

Implementing asset management solutions could significantly lower your administrative costs, streamline your business services, improve customer service and allow you to scale your business upwards quickly and easily.

As administrative persons would no longer need to track down assets manually, their time would be free to utilise in other, revenue-generating activities. Asset tracking can also help minimise asset loss and theft, therefore, reducing project spend. Furthermore, it will enable the administrative department and other departments to effectively communicate with each other and have better visibility over the project’s progress.
 

The most reliable asset tracking technology on the market should give you easy and constant access to the system wherever you are - such as a version available for mobile devices - designed to ease the work of those employees that are constantly on the move. This will eliminate the need to fill out long, dire documents and ensure that no important documentation is lost.

With digital asset management, it’s not only communication that’s made easy, but compliance of staff and equipment, as well. Services and certification alerts can be setup on the background, eliminating the need for administrators to check Excel spreadsheets and miss deadlines due to expire. Alerts can also be made visible to several people, enabling proactive management.

Asset management software allows you to run instant inventory reports, helping you avoid time consuming manual inventory checks and provide regular stock level updates to your clients.

You will have full visibility of consumable items used on job sites and know exactly how many tools and equipment there are available, who’s using them and what’s their exact location, therefore, avoiding unnecessary downtime searching for equipment or causing yourself cash flow implications because of overstocking with items.

Another benefit of asset management software is the ability to set up alerts that notify you when you go above or below a certain stock level. You can also control the more expensive assets, such as power tools, making sure that you have enough of certain tools and that you utilise everything regularly, avoiding having dormant assets.

Asset management technology will also give you full visibility over the certification deadlines of your team and inspection and maintenance due dates. Useful reminders of inspection and maintenance due dates and certification renewals will also be setup, so that you receive automatic notifications.

Not only this, but employees will also have the ability to access their certifications or essential documentation, such as site cards, on their device at any given time.

Undeniably, asset management software can not only reduce administrative costs, but make your life easier in general, keeping your site compliant and productive. Do you think your business could benefit from it?

If so, our free to download guide ‘Introducing asset management software for the construction sector’ is the right read for you. In our eBook, we put together our years of industry experience and knowledge into an educational easy-read that provides essential information on how to effectively manage physical and administrative assets on construction sites and the benefits of digitising your asset management processes. Follow the link below to download your copy.