Margin fade doesn’t need to be a cost of doing business. Getting out of spreadsheets into a single data environment gives contractors the ability to monitor, review and learn from their estimate and historical data to improve project predictability.
We were recently speaking with a CFO at a large contracting firm who told us his team had just finished a long, tedious internal assessment that uncovered they had been routinely underpricing a particular division by 40%. Because of the limitations of their data and difficulty of analysis, they did not know how long this had been going on for. He was relieved to have caught this systematic error now, but it begs the question, what risks could be averted with built-in, continuous monitoring?
Currently, the entire construction workflow is siloed: estimating software here, accounting and project management there, and many, many spreadsheets in between. The fragmented nature of a contractor’s data makes monitoring and analysis nearly impossible. If all a contractor’s data were housed in a single data environment, then continuous monitoring and improvement becomes very feasible. Project audits would no longer be time-consuming or small slices.
We were talking with another CFO about margin fade. He referenced a recent project where the projected margin was 8% but actual was 3%. He was frustrated that this was shrugged off internally as the cost of doing business. He is searching for tools to allow him to put systematic improvements in place so that future projects could meet their projections more reliably. We believe that the first step to achieving his goal is to implement a single data environment for his company.
How getting out of spreadsheets into a single data environment improves a CFO’s life:
Currently, leadership struggles to hold teams accountable because of a lack of clarity into profit drivers and opportunities to affect meaningful improvement. A single data environment gives executives access to the real-time data they don’t currently have that would allow to make improvements and drive sustainable change. Unanticipated risks erode margin. A single data environment changes the paradigm for contractors.
Relay is a single platform to connect your preconstruction team and processes to deliver on-time and accurate bids you can learn from.
By subscribing you agree to with our Privacy Policy and provide consent to receive updates from our company.