Construction Project Management: A Step-by-Step Guide
Regardless of its scale, construction projects are carried out in a sequence or phases to navigate seamlessly without succumbing to unexpected delays or accidents. Each step requires input or direct involvement of stakeholders, architects, engineers, contractors, and regulatory authorities.
At times construction companies have to juggle multiple responsibilities to meet industry standards, operate within conformed budgets, and stick to deadlines. The continuous need for alteration, rework, and risk management makes construction project management elemental to staying on course.
The hustle behind the scenes is synchronized through effective construction management principles, so everyone knows what to do and when to do it. From assembling project teams to dedicating resources and monitoring their allocation, this step-by-step guide will help you achieve successful outcomes for your next construction project.
What is Construction Project Management (CPM)?
Construction project management underlines the planning, execution, and supervision of a construction project from inception until completion. It involves the efficient organization of human and capital resources to ensure the project is delivered on schedule, within budget, and meets specified quality standards.
Unlike other types of projects, construction project management is mission-based — the supervision ends once the project is completed. Without effective management, construction projects remain on the verge of budget overruns, miscommunication, and costly delays.
It falls upon project managers to mark project objectives, allocate budget resources, relay the scope of work to relevant departments, communicate the latest developments with stakeholders, and devise contingency plans in case things go awry. The goal is to realize key project objectives and satisfy the client’s demands while staying viable in terms of functionality and budget.
Challenges of Construction Management Project
For a project to sail smoothly, every stage should occur in an organized sequence — tasks must be defined and relayed to each department, materials need to be delivered, and legal requirements should be addressed on time. Despite the homework, a construction project is prone to numerous challenges that contractors just cannot ignore.
Shortage of Experienced Labour
Being at the forefront of many high-end construction projects, UAE faces a higher demand for technically-apt and skilled workers but have nothing but migrant labors to fill the gap. Areas such as masonry, steel works, carpentry, and heavy-duty equipment operators are in dire need of expertise.
Managing a construction project without a proper workforce often lands a heavy price on construction firms in the form of exceeding budget expense and project schedules. The UAE construction think tank recommends a 15-step action plan to counter any challenges in the construction sector. [?]
Unrealistic Budget Expectations
Not to mention, unforeseen site challenges and the plausibility of alterations and rework can make it challenging for shareholders to earn good profits. Such high irregularities may cause considerable damage to your construction business if necessary steps aren’t taken.
Project managers and stakeholders must take into account fluctuating costs of materials and labor wages. Keep the budget flexible for any unexpected delays or last-minute changes in the project so you have a clear idea of what to expect.
Poor Communication and Disorganization
Ineffective communication is cited as a leading factor in 52% of construction disputes. [?]
To overcome the irregularities, project managers should employ advanced communication setups to keep everyone on board with the latest developments — changes in plans, roadblocks, and other issues. The goal is to ensure every relevant individual has access to and absorbs project information at all times.
Ineffective Project Scheduling
With no room for errors, project managers have to juggle supply chain issues and worker availability while also keeping up with client timeline expectations. But sometimes things don’t go according to plan.
A 2020 construction report states that less than 30% of contractors finish projects on time and within the prescribed budget.[?] It’s important to leave the door open for rework and alterations, to stay organized and operate within budget.
Construction Project Management Process
For professionals leaping into the construction business, it’s important to learn how a project is managed step by step to prevent any inefficiencies.
1. Project Initiation and Planning
The outcome of the study either persuades the stakeholders in favor of the project or raises concerns about the possible constraints and risks that may arise during construction. In case the feasibility study turns out positive, the involved parties exchange notes to create the Project Initiation Document (PID) — outlining the purpose, parameters, and scope of the project.
After the PID is reviewed and approved by the stakeholders, it’s time to develop a project roadmap for everyone to follow. The planning stage further formalizes the PID, creating a Project Management Plan (PMP) which notes the completion timeline, cost breakdown, roles and responsibilities, and risk assessments.
PMP starts with the survey team identifying the project scope, potential risks, and limitations, and devising mitigation strategies to prevent damage. The document is shared with the project manager, who then devises a plan of action for seamless execution. The following documents are included in the planning stage:
2. Assembling the Project Team
The bidding process often takes into account the project delivery method, contract type, and objectives of the project. Most clients only concern themselves with hiring a general contractor or construction manager, but for better outcomes, you need to take it a step further. Building a project management team involves the following steps:
3. Design and Pre-Construction
The client’s input is invaluable during the design stage. Architects must really understand the requirements and objectives of the project while planning its layout. Be open to design iterations and revisions until you produce accurate design documentation that meets the client’s expectations. Key activities during the design phase include:
Often, the project manager is responsible for procuring necessary permits, preparing contracts for subcontractors, planning for site mobilization, and setting up construction facilities. If you haven’t already determined a project manager, it’s time you take action.
Set up a series of meetings with your top-end staff to refine your budget based on the designs, contact suppliers and vendors, and create an in-depth construction schedule that outlines the sequence of activities and milestones. Implement an ERP system to get your project off the ground early.
4. Project Scheduling
Clients need to actively engage with stakeholders, updating them about the project's progress and estimated durations while also integrating their feedback into the plan. Effective product scheduling involves the following components:
5. Construction Phase
It begins with the site mobilization, where the project site is prepared for construction. The construction team — including subcontractors, labor, and suppliers — performs tasks assigned to them.
Whereas, the project supervisors and managers oversee the progress, update schedules, assign resources, hold status meetings, and keep stakeholders in the loop at every step. Being constantly aware of the project’s status enables them to promptly address any challenges and setbacks that may arise along the way.
The construction phase demands adaptability and responsiveness, more than ever. You are bound to encounter unforeseen circumstances and hiccups that may require a change in plans. With the entire workforce counting on the manager you must act swiftly.
Maintain strong coordination with the concerned parties, keeping them informed about the decisions you need to make to keep the construction project on course.
6. Performance Monitoring and Control
While the project is underway, the goal is to ensure it progresses according to the designed layouts and within the specified budget. Project managers compare the work done against the defined milestones in the project schedule. They review the completed tasks and objectives achieved in a given timeframe.
However, supervision isn’t limited to meeting schedules and deadlines. It’s important to keep the financial situation under control as well. As soon as the construction project is set into work, start tracking all the costs incurred and measure them against the allocated budget to ensure there are no overruns.
Any delay in progress or financial irregularities should be communicated back to the stakeholders before taking the necessary steps to resolve them. Construction ERP software can serve as a real-time tracker that can help monitor project progress and set the account record straight.
7. Project Close-Out and Evaluation
The closeout phase entails one final inspection of the project site to ensure everything is in accordance with the approved plans and quality requirements. Any underlying issues and deficiencies are outlined and resolved during this stage.
The in-depth inspection is followed by a team meeting of all project managers, subcontractors, and engineers to discuss project workflows — what milestones are achieved and what went wrong.
Based on the hours of the meeting, the team prepares a project report and presents it to the client for approval. With a thumbs up, all final payments are released to the project manager, who then resolves financial settlements with the contractors and suppliers.
As part of the formal review, contractors are asked to collect feedback from the client and identify shortcomings and areas for improvement. The survey helps build upon those learnings to ensure better outcomes for the future.
Project Management Team: Key Roles and Responsibilities
Project Manager
Construction Manager
Project Engineer
Cost Estimator
Contract Administrator
Construction Management Bidding Process
As the project manager, your job is to select the most credible, qualified, and cost-effective bidder to carry out your project. Before you advertise the project for bidding, develop an idea of what contracts to expect. The two main contract models in the construction industry are:
All acquired bids are evaluated on predetermined criteria — proposed costs, timeline, contractor aptitude, and preferred construction methods — for choosing the ideal contractor. The project is awarded to the one whose bid offers the best overall value and alignment with the project’s goals.
Construction Project Management Software
Key Takeaways
From pre-construction planning and documentation to resource procurement, construction projects involve lots of moving parts. Experts suggest incorporating smart tools and software to enhance their performance output and maintain transparency throughout.
If you’re just getting started in the business or need to fast-track an existing project, book a demo with the industry-leading ERP platform to navigate your next construction project with ease.
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