The ultimate guide to effective construction project management

For a lot of construction companies, construction project management is one of the hardest things to get right.

That’s because construction is constantly changing: project size, scope, design approach, technology, location, project duration, contract type and stakeholders involved are all subject to alterations and all affect project success.

And whether you work in building construction project management or any other area of construction, project managers have to have control over the thousands of moving parts that make up a project, including:

• Time and cost planning
• Contract agreement
• Site management and build (including deviations)
• Acceptance and billing
• Documentation
• And more

If you don’t have control and visibility over all these areas, pockets of waste start to appear, creating anarchy across the project.

It’s no easy feat. But getting construction project management right can be the difference between a project that makes profit and one that doesn’t. This is especially important in construction, where ambitious companies’ growth is stunted by consistent low, and decreasing profit margins for projects (91% of projects tend to go over budget)

In this guide, we’ll cover the purpose, importance and processes of construction project management. Then, we’ll look at the major challenges teams face in construction project management, and how an integrated, real-time approach can help overcome these, and start making your project profits.

Ready? Let’s get stuck in.

What is construction project management?

So what is construction project management compared to other forms of project management?

Standard project management usually involves managing resources across a project lifecycle to control scope, cost, time, delivery, and profits, etc. This is the same in construction project management, except you work within a wider set of constraints.

Construction project management ends with the completion of a project build and review, giving each project a very set limit (although these limits often change). 

On top of this, each project has very different needs, such as design and build. You also have to manage a variety of different contracted and subcontracted roles, from specialist contractors, to site preparation, to installation services and more.

Why construction project management is important

The project is the beating heart of every construction company: it’s where they make and lose money and relationships grow or diminish – this is why construction project management is so important.

And as the construction industry becomes more and more complex and regulated, you need to make sure that decisions, reporting and delivery are as precise and informed as possible.

A project management team are the ones who ensure this, being responsible for the day-to-day and overall success of each project. That means they’re responsible for:

• Coordination and efficiency
• Resource allocation
• Risk mitigation
• Quality control
• Communication and stakeholder satisfaction

How does commercial project management work?

Commercial construction project management is often the responsibility of a team:

• A project owner: funds, oversees and makes key decisions about the bidding process, contractor selection and project delivery method for a construction project.
• A construction project manager: oversees the planning, coordination, budgeting, and supervision of a construction project, handling tasks such as cost estimation, scheduling, and stakeholder communication. This professional, often PMP-certified, utilises industry-specific knowledge and management templates to ensure the project complies with technical, regulatory, and client requirements.
• A general contractor: manages daily job site operations, providing necessary equipment, materials, and labour, and often hires subcontractors for specific tasks; responsibilities include supervising work, ensuring safety, handling permits, and managing waste and personnel. This role is typically awarded after the project owner selects the most suitable bid during the bidding process.
• Subcontractors: specialise in specific areas like plumbing or carpentry, are hired by general contractors to handle tasks beyond their expertise, with oversight through daily logs and the use of punch list templates to ensure no tasks are overlooked at project closure.

 

The stages of a construction project typically include:

Development and Planning

• Choose a site for construction or renovation.
• Conduct soil studies and boundary surveys to ensure site suitability.
• Set a budget, considering both hard costs (materials, labour) and soft costs (design, permits).
• Commercial construction manager plans and coordinates the project, overseeing crews and subcontractors.

Pre-Design

• Overlaps with construction planning; involves setting project objectives and determining timeline, size, and orientation.
• Budget for materials and equipment is established.

Design

• Create detailed drawings and schematics, ensuring compliance with building codes.
• Employ mechanical, structural, electrical, and civil engineers to verify plans and structural integrity.

Pre-Construction

• Obtain necessary permits and insurance.
• Conduct vendor bidding to align procurement with the budget.
• Assemble the field team for the project.

Procurement

• Secure materials and hire subcontractors, focusing on quality to maintain budget and ensure project success.
• Maintain clear communication with all parties involved.

Construction

• Prepare the site, establish guidelines for workers, and set up storage for equipment.
• Begin actual construction: lay foundation, erect frame, install roofing and siding, followed by internal structures like electrical and HVAC.
• Complete interior with walls, floors, windows, and doors; finish with lighting and paint.
• Landscape the surrounding area.

Post-Construction

• Conduct a walkthrough with the client to identify any issues using a punch list.
• Address all issues and pass the final inspection to complete the project.

The current challenges in construction project management

Challenges in construction project management tend to be characterised by one word: waste.

Wasted resources, wasted time, wasted profits. And ambitious companies are starting to realise that these inefficiencies aren’t just “part of the job”, they’re killing their business slowly.

Across the industry profits have been declining for the last six years, and are only estimated to be at 1-2% per project. And it’s only getting worse, with the industry expecting nearly half of all projects to be unprofitable.

Communication bottlenecks are being unearthed and a new generation of workers are bringing in higher demand for digitisation, phasing out the old manual spreadsheets.

But project managers are still plagued by challenges in construction project management:

Construction is behind when it comes to digitisation

Digitisation is no longer just a buzzword in the construction industry. Young talent entering the workforce expect modern construction tools that help improve efficiency, regulation requires companies to keep tighter records of project threads and the inefficiencies of excel and pen and paper are arising.

There is a critical need to modernise old systems and working methods. But a lot of construction companies are struggling to keep up – resulting in lost growth opportunities and reduced competitive advantage.

Good investment in the right technologies can ensure financial gain in the long term and position you at the forefront of development, but the challenge is balancing the day-to-day operational work with that investment.

Those who are investing in digitisation are investing in disparate tools

Companies in a rush to keep up with the need for digitisation have invested in separate, unconnected systems or apps.

It’s a step in the right direction, but having one app for client invoicing, one for timesheet management, one for snagging, one for variations, one for costing etc. is causing even more project anarchy than before.

Digitisation is done in patchwork, causing frustration at multiple different logins, and unconnected information about the project.

Communication bottlenecks are formed 

When tools are disparate and uncoordinated, different parts of the project aren’t properly informed by the other. In construction, data analytics doesn’t flow between the many tasks that your people are getting done, which means you don’t get an accurate view of what is happening in your project.

Lack of project visibility

Projects of all sizes have hundreds or thousands of moving parts: spreadsheets, communication bottlenecks and siloed apps can never provide the transparency or visibility needed to run projects well.

Construction people are smart, but a lot of them end up clueless most of the time due to outdated insights, lost, mishandled or inaccurate information and lack of clarity.

The result of all this is that construction project managers only get snapshots of what has already happened in a project. 

This after-the-event siloed data doesn’t come close to exposing where money goes to die in projects. 

Waste breeds. Burnout and stress are common. Ambition becomes impossible.

The companies that will rise above these challenges are the ones who recognise the importance of these things:

• Smarter, integrated digitisation
• The power of connected construction data 
• Real-time insights and project control

Let’s take a look at what this approach looks like.

How an integrated construction project management approach can help

A new approach is needed, and this comes in the form of integrated construction project management.

In the past, disparate construction project management tools managed different stages of the project lifecycle. However, an integrated approach pulls them all together into one platform for comprehensive project visibility.

In today’s landscape, this approach isn’t just beneficial – it’s imperative for ensuring profitability and project control.

Ambitious companies need all-in-one construction project management tools that are engineered to streamline every aspect of project management from quote-to-cash.

This is the platform teams need to enable project managers to maintain a tight grip on all project tasks in real time:

Centralise control with real-time data

Integrated construction project management eliminates the anarchy caused by disjointed manual processes with a centralised, cloud-based system. 

With features like real-time project planning, time reporting, budget forecasting etc., integrated directly into the platform, managers can make more informed decisions quickly, foresee potential issues or deviations early and avoid costly delays and overruns.

Enhance efficiency and reduce waste

A platform that digitises and automates work orders is critical to address the major pain points of ambitious construction companies.

Compared to the old, manual way of doing things, this approach significantly reduces the time taken from initiation to billing. As a result, operational efficiency is boosted and administrative overhead is slashed, allowing more resources to be focussed on project execution.

Financial accuracy and visibility

All-in-one construction project management should also bring together invoicing and payment plans, automating them to streamline financial operations. This makes sure that every pound spent or earned is accurately tracked and accounted for against the status of the project in real-time.

This visibility is vital in an industry where profit margins are currently tight and financial oversight is critical to success. An integrated system should also have the ability to integrate data from any other financial and payroll systems you use, ensuring that all financial data is synchronised and up-to-date.

This means lower risk of errors and financial control.

This is where Next Project thrives.

Gain real-time project visibility, return on construction data and maximum profits

Next Project is the all-in-one digital tool for business and project management in construction – and it’s tailor made to reduce waste.

Next is for ambitious construction businesses that want real-time control over every project. Our platform delivers dramatically lower project risk based on real-time visibility and makes it easy to get accurate, comprehensive visibility across the entire project management lifecycle – as it’s taking place, not after the event.

That means full, connected control over:

• Project planning
• Time reporting 
• Work order management
• Field reporting
• Budgeting
• Revenue forecasting 
• Tendering and invoicing 
• And much more

No more manual data lift and shift. We capture and make visible all the hard-to-predict movements in real-time that happen inside and between the thousands of jobs and tasks that make up every project. The things that erode profitability and kill customer satisfaction.

Next helps you control costs, see errors before they happen, and makes it easy to manage project deviations. It’s simple to deploy, non-disruptive to the rest of your operations and delivers insight immediately.

Want to see how our solution can have immediate effects on the visibility and profitability of your project? Check out our free demo today!