Profit erosion is a constant challenge in the construction industry. Project margins can diminish for a range of causes, from poor communication to unplanned disruptions.
Procore covered the topic on ‘Jobsite,’ where industry experts shared their views. Senior Site Supervisor for SHAPE Australia, Jan Profant, explained the leading cause of profit erosion.
He says it all boils down to “mistakes and miscommunication.” Construction firms get lost in finding, tracking, and managing correspondence.
Additionally, the complex nature of projects adds to the challenges.
How to Prevent Profit Erosion in Construction
A workshop in Groundbreak 2023 will focus on how to prevent profit erosion in the construction industry. Experts will share how to leverage Procore and ERP data to boost visibility and stay on top of project costs.
Here is our take on the vital challenge with top insights from our team.
Boost End-User Visibility
Various stakeholders work on different aspects of a construction project simultaneously. Moreover, the work may be spread across multiple locations.
The dispersed nature of construction work can easily lead to miscommunication and delays.
Procore comes with management and collaboration tools to streamline communication and project data. The information becomes more potent when you integrate Procore with your ERP.
End-users can access financial data in real-time and stay on top of project updates. They can view budgets, expenses, and forecasts without having to wait for manual reports.
Real-time data empowers stakeholders to make informed decisions on the ground to avoid bottlenecks and mistakes.
For example, project managers can address unforeseen expenses quickly when they arise by assessing their impact on the budget.
It helps construction companies reduce the risk of profit erosion.
Deliver Timely Updates to CFOs and Finance Teams
CFOS and finance teams are essential to preserving the financial health of a construction company. However, they need timely and accurate financial data to make strategic decisions that impact profitability.
Procore and ERP integration ensures construction data from projects is automatically synced with the latter. The automation helps you eliminate the need for manual data entry and enhance data accuracy.
Most importantly, CFOs can access up-to-date financial reports, cash flow forecasts, and profitability analyses without waiting for month-end reconciliations.
The real-time visibility allows them to make more accurate financial projections, manage cash flow effectively, and allocate resources strategically. They can detect potential financial issues early, such as cost overruns or project delays.
As a result, they can take timely action to protect the organization’s financial health.
Make Proactive, Data-Driven Decisions
Unexpected issues can become expensive problems in construction if you don’t address them promptly. Being proactive is necessary to mitigate these risks.
Procore and ERP integration can help construction agencies adopt a data-driven approach to decision-making. Firms can analyze historical project data, trends, and performance metrics to identify patterns and potential risks.
Let’s say a particular type of subcontractor consistently causes delays or cost overruns. You can use this information to make more informed decisions during bidding or selecting future subcontractors.
Moreover, data-driven decision-making extends beyond individual projects. It can inform long-term strategic planning, such as identifying which types of projects are the most profitable.
The proactiveness helps construction businesses preserve their profits on current projects and drive sustainable future growth.
Rely on Procore Correspondence
Procore Correspondence allows you to send and manage correspondence with clients, contractors, subcontractors, and more. It provides a centralized platform to manage communication seamlessly from a single interface.
For example, you can easily create a Variation when a request for information is raised. Additionally, the clear communication trail makes tracking simple and effective.
Moreover, you can keep everyone in the loop on processes, product variations, design, and more. It is possible to create custom groups to share information, assign tasks, and track contributions.
The tool supports visual information like photos of onsite work or notes from an email. Everything is stored in the cloud for easy and quick access.
Catch More at Groundbreak
We will learn more at Groundbreak in the workshop by leading minds in the industry. Assetsoft will be present at the event and take note of all lessons. Contact us if you want to implement Procore for your business to protect your profits and ensure project success. We can also train your staff to leverage the solution to the fullest.