Accounting Systems by their nature concentrate on providing information about events that have already happened. They provide a numerical picture of the status of an organization at a point in time: the month end balance sheet. They provide a high level numerical picture of what has changed over the last month: the Profit and Loss Statement. They provide costs against budget on a periodic basis, sometimes 30 to 45 days after the fact. This information is important, but it doesn't really help management know how they are doing on a day to day, project by project basis, when important decisions need to be made. Accounting Systems simply aren't the proper tool to accomplish these needs. But when combined with Construction Scheduling Software, management has the information they need to make good business decisions.
To manage for profits, management needs information from the field on all projects daily. The field information needs to be available in a timely manner?preferably at the end of the construction day for which the information is for. This information needs to include who was at the site, what was accomplished, what slowed planned progress, what problems occurred, if there were any safety issues, code or inspection issue, and were the problems resolved or not. This information needs to be compared with the Construction Scheduling Software schedule and present variances to management in order of their impact on profitability.
Technology exists for this information to be collected daily from the field using wired or wireless laptop or tablet PCs, or PDA phones. Usually the necessary information can be entered into these devices in less than 15 minutes a day by an assistant project manager or site supervisor. When completed, this information should be electronically transmitted to a central computer where it can be compared with the plan or schedule. Variances can then be developed and sent to alert management each morning:
1. Any critical path activity that did not start before its late start date. These activities will cause the project end date to be missed unless additional labor is employed to bring the project back on track.
2. Any document that hasn't received approval and is required for a critical path activity to start. The issues with this document need to be resolved quickly or they may lead to the creation of condition 1.
3. Any activity that is running significantly behind schedule and may lead to additional costs to complete.
These are a few of many types of information that can be developed to help management see into the future and make improved decisions with more current information.
Cost accounting is a useful tool to look at the past and learn from history.
A far more useful profit management tool, however, is to collect actual construction site activity daily and present it to management in an easy to understand and decision impelling manner. Getting done ahead of schedule and under budget is possible if management receives the right information from the Construction Scheduling Software early enough to take the correct actions in time.
Free Construction Scheduling Software
These ?back-end? or ?back-office? systems concentrate on cost control. Certainly turning estimates into budgets into committed costs and measuring actual against committed costs is an important activity. Management needs this after-the-fact information to ensure that future projects in their construction scheduling software are planned and executed properly.
The difficulty with these approaches, however, is that they don't recognize the motto ?time is money.? These approaches do not provide top management with the tools they need to make decisions on a daily, weekly and month-to-date basis to make sure that a project and profit are on track.
Integrating the ?front-end? systems, such as critical path method scheduling and project management software, provides top management with these capabilities. Here's how:
- Field reports completed each night include what activities were accomplished as percent completed or by units put in place, whether measured by labor hours or materials or both. Done nightly, most field reports for the construction scheduling software can be completed in 15 minutes.
- The field report is captured electronically and sent to a central information server. There, the field information can be compared with the schedule and an analysis of variances completed during nightly processing. These variances can be broken into two major areas: alerts and schedule modification.
ALERTS
Activity-related alerts in the scheduling software include: critical tasks that have passed their start date; those that have started, but are significantly behind schedule; those that have started and are significantly ahead of schedule; and those that have not started, but have time to be completed before the late finish date.
Document-related alerts include those documents with manually set resolution dates that have passed and those documents that are related to an activity and are not resolved seven days or more ahead of the activity-start date.
SCHEDULE MODIFICATION
Recalculation if the construction scheduling software will indicate if the contract end date remains valid, needs to be adjusted or if changes in working hours and manpower are necessary.
With this information in the construction scheduling software, management can take action much earlier. For example, if a critical path activity, which is behind schedule, is not addressed quickly it causes the contract end date to be extended. When this happens, the contractor must either apply additional manpower later in the project to stay on track, face excessive general conditions or possible liquidated damages or an unhappy owner. All of these negatively affect the contractor's bottom line.
Integrated software also can remind management when the initiation of an activity is related to document approval, such as a permit. If this activity has little or no float (lies near or on the critical path), it is imperative to get the permit quickly. If this item slips through the crack, again the results are a reduction of the contractor's profit margin.
Construction scheduling software that constantly collects field information, compares it with planned activity and alerts management of the variances allows contractors more time to analyze alternatives and make better decisions. Better decisions result in a higher probability of meeting or exceeding planned completion dates and profit margins.
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