5 Success Factors for Construction Firms

Construction Success FactorsSince the economy’s slow improvement, the construction industry has seen growth as well. The issue, however, is the growth is mixed. Some companies are benefitting from the economic environment, while others are still being trampled by the lasting effects of the recession. Raken, a construction reporting app, shares success factors for construction firms in a recent whitepaper.

Following is a summary of the 5 factors for successful construction firms.

1. Operations Visibility

Visibility gives managers and executives a complete view into the daily processes and activities within their business. It allows these leaders to evaluate the progress of active projects. It also allows for the opportunity for them to make well-informed decisions, or address project issues early.

Threat: Silos

Departmental silos take place when one department does not want to share information with other departments within the company. How it hurts the business:

  • Reduced efficiency
  • Lack of collaboration
  • Employee dissatisfaction/turnover

Remedy: Tear Down Silos

Open communication is critical. Ensure the entire team knows the objectives, risk, and expectations of a project.


  • High morale
  • Projects completed on time and under-budget
  • Few unpleasant surprises


2. Embrace Technology

Out of the top 19 major American industries, Construction spends the least on technology- only 1% of total revenue. With all the benefits of technology, why the hold-up?

Threat: All Levels of the Workplace are Reluctant

It’s coming from both those at the top and the bottom of the pyramid. Execs view technology as an expense, rather than an investment. While initially, the company loses money, major benefits and cost-savings will be the result long-term. Additional, companies may perceive that they are technologically advanced because of their adoption of spreadsheets. In reality, this is a very simplistic approach to technological advancement. The data may be stored, but not yet converted into meaningful information. Older employees at all levels are slow to accept technology, because they trust the same processes they’ve used for years.

Remedy: Purposeful and Mobile Apps

Applications will not only store data, but communicate it in a meaningful way. Find an application that is made specifically for the construction industry. The benefit in this is that it asks and provides only relevant business information. Mobile apps are extremely helpful because they can be used on-site, and, interestingly enough, they’re appealing to the older generation. Many find it easier and simpler to use than a software program.


  • Increased productivity and efficiency
  • Greater control over projects
  • Long-term cost-savings


3. Manage Complexity

Construction projects are growing increasingly complex. Some factors of a complex environment:

  • Multiple subcontractors and locations
  • Architects are designing smart structures, including components with which contractors have had minimal experience
  • Unanticipated events- accidents, severe weather, shipping delays

Managing multiple tasks and responsibilities is not easy.

Threats: Generic Software and E-Discovery

Some executives are cutting corners when installing software. By selecting Enterprise Resource Planning software (ERP), companies are saving money, but the programs are generic and can be used for any industry.  There are multiple issues with choosing incorrect software:

  • Generic software can mean larger expenses to configure the software to meet industry demands
  • While software changes are made, decisions will need to be made using incomplete and inaccurate information

E-Discovery is another potential, and costly, threat. If your business does wind up in court, your company may have to pay a lawyer or expert to sift through stored data relevant to the case.

Remedy: Communication and Tech

  • Clear communication and active collaboration
  • Accurate data entry as early as possible
  • Tech with a simple, human interface
  • Tech specific for the construction industry


  • Effectively manage active projects
  • Generate accurate estimates


4. Document Only What Matters

Although we want to document everything, it’s not feasible. Data documented should accomplish two things:

  1. Manage projects
  2. Resolve disputes

Everything else is noise.

Threat: Data Collection On-Site

  • Data gets stuck on-site if work flow isn’t clear
  • Inadequate training on collecting data
  • Work-sites too busy to document consistently

Remedy: Accuracy, Structure, and Supervision

  • Ensure the team understands the importance of accurate documentation
  • Document every issue that can lead to litigation
  • Automate documentation with mobile devices
  • Active supervision


  • More accurate documentation when recorded as it happens
  • Executives receive necessary information to manage projects and minimize risk


5. Avoid Litigation

Litigation is very costly. It is not unheard of for a construction firm to face bankruptcy and fail because of a lawsuit. Some potential suits: mold, water damage, and defective workmanship.

Threat: Plenty of Litigation to Go Around

71% of large construction firms are spending over $1 million on litigation currently. Clearly, lawsuits are widespread in the industry.

Remedy: Documentation

If the court date comes, companies need to be prepared with relevant documents. Inadequate documentation is an easy way to lose in court. Keeping daily reports makes the firm look prepared and thorough. It shows that the company paid close attention to the project. Foremen need to execute regular spot checks noting defective materials and any disputes with subcontractors and suppliers. Photo evidence is also important to have.


Documentation builds your defense, but avoiding all together avoids costly legal fees. With close monitoring of projects, potential legal issues can be avoided.

Construction Management Success at Your Fingertips

Visibility, communication and technology are clear themes in successful construction companies. Keep up-to-date, but keep in mind your company’s needs when selecting technology. Accurately noting key information keeps the whole team on board and, with active communication, can boost morale.  Adopting some of these practices can improve both your efficiency and bottom line.

1 Comment

  1. Dakwerken

    Insightful post. These mentioned points are really helpful, especially adopting new technology and managing documents is really important for every firm. Thanks for sharing this article.

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