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Construction Project Management: A Step-by-Step Guide

Construction Project Management: A Step-by-Step Guide

Published 29 Mar 2024
The facade you see of a finished construction project — from towering skyscrapers to simple dwellings — conceals a multifaceted journey of planning, coordination, and flawless execution to turn it into what it is.

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)?

While the term hints at the administration and surveillance of a building under construction, the actual appointment is a bit more inclusive.

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

While the construction industry assures brighter prospects for 2024 with a 4% growth projection between 2024 and 2027, it’s still marked with concerns about profitability given the challenges it posits. [?]
With only a 1% increase in construction valuation in 2023, Dodge forecasts a 7% rise for 2024 taking the market valuation to $1.206 trillion. [?]
Starting and managing a construction project is bound with complications, from supply chain issues to inefficient communication between concerned departments.

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

Even though the economies look stabilized and new investments pouring into the construction sector, there’s a crisis looming overhead — shortage of skilled labor. [?]

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

Finalizing budgets for construction projects isn’t as straightforward. A standard, rigid cost projection of a building without accounting for the economic uncertainties and supply chain issues.

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

Innovative construction technology trends are set to shape the industry in 2024, yet most construction firms are still relying on outdated mechanics. Poor coordination between jobsite worker teams and in-house architects and engineers can cause delays in the schedules.

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

Basically, project scheduling means organizing a sequence of events that lead up to the completion stage. However, during construction project planning and scheduling, managers do not set plausible buffers in the timeline to accommodate unexpected setbacks and disruptions that may arise during construction.

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

Project management for construction projects isn’t any different from administering tasks in other spheres. The premise is simple. It is to get something delivered to the client within the constructed timeframe, alloted budget, to the defined scope and degree of quality.

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

Before the construction kicks off, construction managers are tasked to assess the project scope. It’s a feasibility study that examines the project requirements, budget considerations, and site limitations to determine whether a project is viable to execute.

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:
Work Breakdown Structure. The document outlines the scope of the project into an actionable checklist that classifies the content into visual, more manageable chunks.
Communication Plan. From pre-marked goals and objectives of the project to the tools and methods meant to fulfill them, a communication plan creates a formal framework that everyone has simultaneous access to.
Risk Management Plan. The document includes a formal risk assessment of potential budget cuts, worker shifts, and shortage of resources that may cause delays or irregularities in the project.

2. Assembling the Project Team

Once the project action plan is reviewed and finalized, the hiring begins. A skilled and well-coordinated team is essential for navigating the complexities of the project and steering it forward based on the set parameters and objectives. Around 93% of construction companies are on the lookout for qualified workers, but barely 22% of them are successful.[?]

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:
Determining the Key Roles. Besides filling the spots for construction managers and site supervisors, find specialists in key construction areas like scheduling, cost control, safety, and quality assurance.
Selecting Competent Team Members. Project managers must assess potential team members based on their track record in similar projects, technical skills, problem-solving abilities, and capacity for effective communication.
Training and Development. Invest in training workshops during the pre-construction phase to keep your workers on board with the latest industry trends, best practices, and safety protocols.
Promoting Collaboration. Integrate construction operations with an ERP system to facilitate information exchange amongst the team and ensure transparency.

3. Design and Pre-Construction

Design marks the first stage of collaboration between key authorities of your project team including contractors, architects, and engineers. Based on PMP and Project Action Plan, architects draft design plans and structural layouts while adhering to building codes and environmental regulations for 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:
Architectural Layouts. The conceptual designs, floor plans, elevations, etc. must fulfill functionality and aesthetics which the concerned parties agreed upon.
Structural Engineering. Propose a structural layout that meets building regulations and safety standards.
Mechanical, Electrical, and Plumbing (MEP) Design. A layout sketch for the integration of heating, ventilation, and plumbing systems in the building.
Design Development (DD). Identify the type of materials, range of equipment, and workforce required to execute the project while abiding by quality standards.
Even if the design documents are approved by the stakeholders, you still need a green signal from the building department before passing it on to contractors and engineers on the field.

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.
Learn to streamline all pre-construction activities to launch your project on time

4. Project Scheduling

Everything you have prepared until now is set to be streamlined in a comprehensive schedule that outlines specific tasks, timelines, and resource allocations. When you have a clear schedule to follow and an Enterprise Resource Planning system that supports real-time communication among all parties, you will most likely avoid any pitfalls and delays along the way.

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:
Setting Task Sequences. From bidding contracts and sourcing materials to project close-out and evaluation, every task should be carried out in sequence for smooth and timely progression of the project.
Estimating Project Duration. It’s important to estimate project hours during the planning stage to set deadlines and create accurate budgets. Track historical data, industry benchmarks, and team expertise to develop precise estimates.
Allocating Resources. A marketing manager must ensure that the right resources — labor, materials, and equipment — are available at the right time and in the right quantities.
Devising Plan B. No matter how calculated, project estimates are prone to delays and inefficiencies. Over 75% of construction projects fail to meet their proposed deadlines, making contingency planning crucial [-]. Add buffers in your timeline to limit any losses.

5. Construction Phase

With the design plans laid out, the schedule set, and the project team sorted, you’re ready to build. The construction phase, commonly known as the project execution stage, involves coordinating various teams, contractors, and resources to execute the project according to the proposed timeline, budget, and quality standards.

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

Although it’s labeled as a post-construction activity, performance monitoring and control overlap the construction phase where managers continue to supervise, regulate, and administer the ongoing work.

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

Project close-out is the final phase of the construction project management process. It underlines the formal wrap-up of the construction site after completion and handover to the client.

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

As evident from the management process, construction projects are an enormous undertaking. Building one from the ground up requires insights and direct involvement from various professionals. Here are some of the key members of a construction project management team and what they bring to the table.

Project Manager

Often referred to as the owner’s representative, the project manager leads and coordinates the construction project from initial planning to final execution. They are responsible for advocating the owner’s interests and ensuring everyone on the team works to fulfill those requirements. Project managers are also responsible for:
Developing and communicating the project vision, goals, and objectives
Creating a comprehensive project plan, including schedules and budgets
Mitigating risks and addressing issues as they arise
Communicating with the project stakeholders

Construction Manager

Often confused with the project manager, construction managers oversee day-to-day on-site tasks and coordinate activities such as scheduling, resource allocation, and cost management. Some of their main duties include:
Supervising construction personnel and suppliers
Enforcing safety protocols on the construction site
Overseeing the procurement of materials and equipment
Collaborating with the project manager to address challenges

Project Engineer

Project engineers play a key role in designing the project management plan during the pre-construction and planning phase. They assess the project scope, review initial layout drafts, and identify possible risks associated with the construction project. Their main responsibilities include:
Reviewing initial design drawings and specifications
Coordinating with architects and sub-engineers to address design-related issues
Monitoring the performance of construction materials and systems
Ensuring compliance with building codes and regulations

Cost Estimator

Cost estimator manages the project budget. From assessing the soft costs to finalizing labor wages and procurement costs, the cost estimator drafts initial budget estimates and makes amendments as required. Some of their main duties involve:
Analyzing project specifications and blueprints to determine project costs
Collaborating with suppliers and subcontractors to obtain cost quotations
Evaluating potential cost-saving measures and alternatives
Monitoring and controlling project expenditures against the budget

Contract Administrator

All project-related contracts are handled, reviewed, and negotiated by the contract administrator. They work alongside the project manager and construction manager to ensure all contracts are established and fulfilled effectively. A contract administrator is in charge of: