Reducing risk can increase your returns

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Risky business

If you’re in the construction industry you know that risk comes with the territory. Even if you have the best insurance coverage on the market, it’s only one small piece of the puzzle when it comes to risk mitigation. In fact, the reality is that more people use risk assessment than risk mitigation strategies—that is, sizing up the kind and amount of risk you’re running, rather than taking measures to lessen the risk itself. Day to day, this translates into problems arising and taking resources to get them resolved when it may be possible to prevent them in the first place. And that can be a very costly mistake. Unmitigated risks can lead to schedule delays, cost overruns, even disputes or claims.1

Let’s add to this some of the top challenges faced by construction firms. These include:

  • Lack of available resources (skilled or other)
  • Lack of visibility across projects
  • Inability to determine profit potential of new projects
  • Volatile business conditions (market changes).1

So if you’re feeling the crunch of inadequate resources and limited visibility across your projects, let alone the inability to accurately scope projects amidst market fluctuations, how can you stave off risk and increase profits?

There are no small decisions

First, it’s important to be mindful that every decision, no matter how small, can and will have an impact on your business and its bottom line. Fight the temptation to decide now and deal with the repercussions later. Be sure your decision-making process begins with a thorough understanding of all the information, including a comprehensive review of all the potential implications of your decision. Within reason, consider your time and resource constraints, identify specific metrics that will help you evaluate any potential impact on your business’s staff, equipment, revenue and overall operations, as well as how you might measure that impact. By taking this kind of holistic approach to decision making, today’s construction firms can avoid undue risk, and the right mobile resource management solution can help you with this.

Be resourceful

Second, with resources in short supply, firms must be proactive to ensure they are getting the most value out of the people and materials available to them. But without insight into the availability and optimal allocation of these resources, it’s extremely difficult to manage costs effectively.1

The ability to maintain healthy vehicles and equipment efficiently and nimbly rearrange jobs when unexpected downtime occurs is key to the productivity of your business. Visibility into your resources not only helps your mobile workers by equipping them appropriately for their work for the day, it also helps you avoid underutilizing what you have—either costing you money or keeping you from earning more.

Create open communication

Third, if you aren’t sufficiently tracking your performance using specific metrics, you don’t truly have way to only know what’s working well and what improvements are needed, for example, your on-time delivery rate or customer satisfaction ratings. Improved communications where job data can be accessed easily can also make managing subcontractors more effective and streamlined.

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Creating a transparent communication channel where information flows to and from individuals easily and quickly can be the difference between profit and loss, not to mention a satisfied and dissatisfied customer, even in the case of an unexpected delay or problem.

Look to the clouds

The best ways to mitigate risk is to have complete visibility into all your resources, projects and related data. This is where a cloud-based project management system can play a huge role. In fact, companies with cloud project management solutions are 58% more likely to have all their project details captured in one central place,1 meaning enhanced and easy access to all the vital information. Cloud-based systems provide all the necessary team members with real-time access to every facet of the project, enabling decision-makers to act immediately when needed, thereby better adhering to schedules and preventing additional costs. In other words, it might be time to retire those old-fashioned paper ledgers.

This level of transparency can and should translate externally as well, for example, offering insight to suppliers on payment timing and to customers on delivery schedules. It’s a 360-degree feedback loop for all parties, driving interaction, engagement and accountability at all stages. At each phase of the process, each player can know what is happening and any issues that arise can be solved quickly to keep the project on schedule and on budget.

Companies that use cloud-based project management solutions have some key capabilities that today’s tech savvy customers expect:

  • 9% greater improvement in time-to-decision
  • 98% are more likely to have electronic payment solutions, thereby creating more efficiency and visibility in the payment process
  • 73% more likely to deliver more projects on-time or early
  • 80% more likely to be under budget
  • 10% more likely to see improved year-over-year profitability.1

The right solution can help you accurately measure and evaluate your company’s performance, identify areas of improvement and provide insight on how to make those changes.

 

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