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A Guide to Getting Construction Planning Right

If the project is the beating heart of every construction company (where they make and lose money), construction planning is the system of electrical signals that keep it beating.

Effective construction planning keeps all the requirements for a project on track. 

Projects can be huge, and contain up to thousands of moving parts, so without a good planning strategy, including things like construction scheduling, projects will inevitably run overtime, over budget and cause everyone working on a project significant stress.

In other words: lack of effective construction planning means projects are mired in waste, and have a low chance of making a profit.

A lot of construction companies are still stuck in old, inefficient methods of planning, such as manual scheduling, documentation and cost planning.

This is causing more profitless construction projects than ever in the industry. Data reveals that profit margins from construction projects have been diminishing for the past six years, now hovering between 1-2%. 

Additionally, a staggering 91% of projects exceed their budget constraints, which significantly contributes to about half of all projects ending up unprofitable. 

If ambitious construction companies want to mitigate these financial risks and make a profit, the need for robust, adaptive and comprehensive construction planning is crucial.

In this guide, we’ll go over:

  1. What construction planning is
  2. What goes into a construction planning process
  3. What can go wrong in construction planning management
  4. Construction planning techniques to mitigate issues

Let’s dive in.

What is construction planning

So, what is construction planning and how does it work?

Construction planning is the process of organising all the stages, tasks and jobs of the construction project lifecycle so that teams can accurately track and maintain control over their projects.

Construction planning is a collaborative process led by project managers, along with engineers and architects, who play crucial roles. 

They define the project scope, develop schedules, estimate costs, and coordinate the procurement of resources. Additionally, they manage stakeholder communication and ensure compliance with legal and regulatory requirements. 

Effective construction planning involves these professionals working in concert to align project objectives with practical execution, enhancing efficiency and ensuring successful outcomes.

Things that go into a construction planning process

Within the construction planning process, jobs that need to be done are:

  • Define your project

This should be the first step of your construction project planning process. Establish what the goals and purpose of the project is, including a plan on how you are going to achieve those goals. You should also map out who your stakeholders are. 

In this stage, you should also determine what the return on investment of the project is for your business (profit gain / loss)

  • Map all the activities that need to be done

Breakdown, name and structure all of the tasks that are needed to complete your project. This should also include the milestones you need to reach along the way

  • Material Takeoff (MTO)

This is a list of all materials you’ll need for a project. It’s crucial for accurate cost estimation, procurement and preventing delays and project overruns.

  • Determine a construction estimate

Assign costs to your list of construction materials created in the MTO.

  • Resource scheduling 

Resource scheduling is vital for the success of your project. It makes sure each activity has the right workers allocated at the right time and that you have the correct materials and equipment.

It gives you a timeline to prep and execute each task and job at the correct time.

  • Identify permissions

Identifying permissions in a construction planning process is crucial because it ensures compliance with legal and regulatory requirements. This helps avoid legal disputes, fines, and project delays, ensuring smooth project execution and adherence to safety and zoning standards.

These planning jobs run across all stages of a construction project, from development and planning, to post-construction.

Cost planning in construction projects

Effective cost planning in construction is more than just a preliminary step; it’s a cornerstone of successful project management. 

Whether you call it cost planning in construction, construction cost planning, or construction finance management, the principles remain the same: it is essential for maintaining control over financial expenditures and ensuring operational efficiency throughout the lifecycle of a project.

Why cost planning is vital

At its core, construction cost planning involves a detailed outline of all expected expenses before the first brick is laid. 

This foresight not only helps in forming a realistic budget but also provides a benchmark against which actual costs are measured as the project progresses. This continuous comparison between estimated and actual costs is crucial for spotting budget overruns early and allows for timely adjustments.

Finance management in construction

Managing finances effectively goes beyond keeping a project under budget. It encompasses strategic allocation of resources, ensuring money is spent wisely to maximise value. 

For example, through construction finance management, a project manager can decide whether to invest in high-quality materials upfront to reduce maintenance costs down the line, balancing immediate costs with long-term benefits.

Operational efficiency

The impact of robust cost planning extends into operational realms. With a clear financial roadmap, project managers can streamline processes, reduce waste, and schedule work more effectively. 

This efficiency not only helps in avoiding delays—a common pitfall in construction projects—but also in enhancing overall productivity.

What can go wrong in construction planning management

Every project of any size has a plan, but construction planning management can be plagued by a common set of challenges that can derail projects, leading to financial losses, delays, and high levels of stress among teams.

More often than not, these project planning challenges come down to lack of connected construction data, no real-time visibility and decision paralysis.

Inadequate real-time visibility

Outdated information: Traditional construction planning often relies on periodic updates rather than real-time data. This means that by the time project managers view the reports, the information is already outdated, leaving them making decisions based on past circumstances rather than current realities.

Impact of delays unseen: Without real-time data, delays in one segment can cascade through the project without immediate visibility. This lack of insight makes it difficult to mitigate issues before they expand into critical problems.

Data silos and integration issues

Disconnected systems: Many construction projects use a variety of digital tools that do not communicate with each other effectively. This results in data silos where information is isolated, making it hard for project managers to see the big picture.

Compromised decision making: When data lives in silos, the interconnected impact of decisions on different aspects of the project—like resource allocation affecting the budget or schedule adjustments impacting procurement—remains obscured.

Stress and decision paralysis

Burnout from inefficiency: Constantly dealing with emergencies and unforeseen changes can lead to burnout among construction teams. The stress of managing a project without a clear, integrated view of all activities leads to panic, fear, and inefficiency.

Reactive rather than proactive management: The lack of visibility into real-time data forces teams to operate reactively. They’re constantly putting out fires rather than preventing them, which can lead to suboptimal decisions that compromise project success.

Without the ability to see and adjust to real-time project data and impacts, projects frequently exceed budget constraints. 

This is a significant contributor to the trend of diminishing profit margins in the construction industry, with many projects failing to meet financial expectations.

The cumulative effect of these planning failures is not just financial; it also affects the morale of the team and satisfaction of stakeholders. Continuous issues and lack of control can leave all parties frustrated, questioning the feasibility of project timelines and quality.

Construction planning techniques to mitigate issues

So, what construction planning techniques can solve these issues?

Breaking down data silos

By adopting an integrated construction project management approach, teams can centralise all aspects of a project, from initial quotes to final billing, into one cohesive platform. This method enhances project visibility and ensures all construction data is interconnected, allowing for deep analytics and proactive adjustments across different project stages.

Real-time data access

Embracing systems that provide real-time data (we call it data in motion) transforms planning techniques in construction management. This approach enables managers to see the continuous flow of project activities, adjust dynamically to changes, and understand the real-time status of the project, thereby mitigating risks before they become costly issues.

Interconnected resource scheduling

You need to have 100% control of the resources in your projects. A tool that allows for smooth, dynamic resource scheduling is the key to success. 

It should enable you to not only get a full overview of the project, but show how changes to each aspect of a project affects the timeline and budget, like:

  • Personnel and equipment
  • Holiday periods, milestones and deadlines
  • Staff occupancy
  • And more

Choosing the right software for construction planning and scheduling

Choosing the right construction planning and scheduling software isn’t just an operational decision; it’s a strategic one that significantly influences the success of every construction project. 

Effective software not only streamlines processes but also provides critical, real-time insights that can make or break a project’s profitability and timeline.

For construction companies striving to overcome these challenges, selecting the right software for construction planning is paramount. Next’s planning tool exemplifies a powerful solution that integrates every aspect of construction project management into a single platform.

That’s where Next comes in.

Our planning tool gives you:

  • Agile and real-time control: Our planning tool offers a drag-and-drop scheduling interface, allowing for agile and real-time adjustments to the project timeline. This feature ensures that all team members are up-to-date with the latest project developments.
  • Comprehensive visibility: With features like customisable views for dependencies, resource allocations, and cost projections, Next helps project managers maintain comprehensive oversight over their projects. This kind of visibility is crucial for detecting potential delays or budget issues early.
  • Efficient collaboration: The tool facilitates efficient communication across the team and with clients. Schedules can be exported as PDFs or shared via online links, ensuring that everyone involved is informed about the project status without delays.
  • Ease of use: Accessible online with no need for downloads or installations, Next can be quickly implemented into any project’s workflow. 

We’re currently offering a free 30-day trial of our planning tool, making it a low-risk, high-reward solution for construction companies eager to improve their project management practices.

Want to find out more first? Get a free demo or chat to one of our construction experts.

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