Over the past year, “analytics” has become a hot topic in the construction industry. But much of the attention has been on its use by massive firms in mammoth projects. What is not mentioned is that even smaller projects and modestly-sized firms can use analytics to improve operations.

Effective use of analytics begins with collecting real-time jobsite data. For many smaller companies, this can seem like a deal-breaker, especially if they still rely on paper forms to collect information (e.g., paper inspection forms, punch lists, invoices, employee timesheets and incident reports). 

But paper-based reporting creates unavoidable challenges and delays. Project managers are effectively held hostage to how quickly paper reports are filled out, brought to the office and manually rekeyed into the company’s computer systems. Furthermore, collecting information on paper makes digital analytics impossible. Without accurate, actionable intelligence, managers end up chasing problems that have already surfaced, instead of being able to spot potential issues and quickly address them before things go seriously awry.

However, the hurdle of going digital is not as high as it appears. Most employees—and certainly most jobsite managers—have smartphones that can house data capture applications that can easily replace pen and paper. Just point and shoot, and information is automatically stored as a digital file that can be easily accessed and shared.

Once a company begins to collect data digitally, numerous opportunities arise for analytics to help optimize operations, increase efficiency and improve bottom lines. Here are a few benefits that stand out:

• Project progress in real time. By collecting data on site and in real time, a company can immediately assess the status of a project, with labor costs, accident rates, subcontractor performance and more. All of the information is then easily accessible on a minute-by-minute basis. Plus, insights gleaned from one project can be used to identify cost and schedule issues on other projects.
• Cost savings. Analytics tools enable companies to monitor costs on an ongoing basis across all operations. A firm can assess costs according to, for example, fluctuations in the price of materials, number of workers on the project, inventory of building supplies and more.
• Minimizing missed deadlines and cost overruns. Schedule slips and cost overruns rarely happen overnight; usually, there are subtle early indicators that trouble lies ahead. Analytics can help companies identify these “red flags” sooner rather than later – and, more importantly, quickly take steps to head off problems before they reach a critical stage. For instance, an organization can reallocate labor and order additional material at the first sign of trouble, thereby avoiding schedule creep and cost overruns.
• Better materials management. Having fresh data pertaining to the progress of a project enables a company to better manage and identify trends in its supply of necessary materials. For example, by monitoring the consumption of actual material use compared to projected use, a project manager can quickly spot when poor work is causing materials to be damaged or wasted. Without analytics, these trends are difficult to spot early on, causing the problem to be addressed only once it becomes a crisis.
• Reducing accidents. Analytics can help identify areas of greatest risk, especially around worker safety. By spotting common factors that lead to accidents, a company can proactively take steps to minimize dangers, thus resulting in lower insurance costs and fewer project delays.
• Gaining improvements across multiple projects. The application of analytics does not need to be confined to individual projects. By consolidating and analyzing data from multiple projects, a company can spot areas for greater efficiency and optimize management techniques across all projects This can result in significant cost savings and more efficient operations for current and future projects.
• Winning more work. Analytics allows companies to compare actual project costs with pre-project projections, which leads to more accurate bids. Companies are armed with a data-based basis for believing that projected profitability is likely to actually be achieved if the firm wins the bid. 

Moreover, analytics creates two other competitive advantages when bidding for work. First, with actual data in hand, a firm has the backup necessary to demonstrate that its bid is a credible, accurate prediction of actual project cost and time-to-completion. Second, a firm can demonstrate to a customer that project progress can be assessed on a real-time and ongoing basis. Customers will be reassured that instead of unpleasant surprises during a project, areas of concern will be spotted and addressed before they become problems that impact the project’s budget or schedule. 

Analytics technology is no longer reserved for only the largest players. Today, the barrier to entry is low, allowing firms of all sizes to reap these benefits. Indeed, given the ready availability of analytics applications, any firm that delays using analytics puts itself at a potential disadvantage competitively—especially as other organizations, big and small, adopt the technology for their own needs.

Smaller construction businesses can’t afford to risk getting left behind. The good news is that there is no longer any reason they should.