Technology standardization is becoming more commonplace. With general contractors (GCs) requesting their teams use specific tools, subcontractors are often required to use the GC’s system of record while also leveraging their own system. Consequently, subcontractors often lose ownership of business-critical project data once the projects end.
This comes at a cost, as maintaining ownership of the project data they contributed to the GC’s system is just as important to subcontractors as it is to GCs. Lasting access to project data enables subcontractors to make data-driven decisions for future projects.
For instance, the ability to track and analyze performance over time facilitates evaluations, informing future improvements and helping protect profitability.
Additionally, data ownership mitigates risk by protecting subcontractors in the event of disputes or claims against their work on a project, as the ability to go back and trace a project’s design and construction changes enables subcontractors to defend their work.
Protecting Profitability
Field workers on subcontracting teams are typically paid hourly, meaning every minute of the work being done impacts the company’s bottom line. Spending extra time on work here and there can really add up and chip away at the profits that subcontractors are able to recognize on a project.
To ensure they are paid properly for the work they contribute, it’s important that subcontractors enter into projects with accurate bids. And historical data plays a critical role in developing accurate bids for future work.
For a basic example, let’s say an electrical contractor is brought in to build the electrical systems for a data center that has to be completed within a certain timeline. Based on the subcontractor’s work on a similar data center project the previous year, the team submits a bid for approximately the same cost as the earlier project. However, as the new project evolves, the team learns new types of equipment will be installed, presenting unique challenges that require more time and money than what was budgeted for in the original bid.
The additional charges for electrical work might then be negotiated down in attempts to keep the project on schedule and closer to its original budget. In other words, the subcontractor has to do the additional work within the original timeline and potentially be paid a little less—a situation that can potentially be avoided if subcontractors have their project data to refer back to.
In the above example, if the electrical subcontractor is able to refer back to their history working on data center projects, they can recognize a trend of late-stage updates with new technologies. Consequently, the subcontractor could include a cushion, or clause, within the bid and contracts to offset the pattern of increasing scope on data center projects.
Of course, data ownership also provides the opportunity for subcontractors to make proactive analyses about how they can improve operations. If a they are trying to optimize their operations to grow in a particular segment, then they can study the organization’s project data and determine whether it makes sense to cut down on work in other segments in which the projects produce a smaller return on investment. Additionally, they can see which GCs they work well with by tracking productivity and response times, making the business leaner.
Last, but not least, the ability to leverage data sets helps subcontractors strengthen their relationships with the owners and GCs on project teams. When subcontractors have ongoing access to the rich project data set, they are empowered to be most helpful to their partners across the project and able to develop stronger working relationships that might serve their business for years to come.
Mitigating Risk
Disputes are often inevitable on construction projects, especially when many teams are involved. Disagreements that arise during the building process can typically be addressed immediately as the work itself gets done. However, making claims against work that has already been completed on a project is not uncommon.
If something goes awry at a building after construction is complete, owners or inspectors may need to do a full reassessment of the work to pinpoint exactly where the issues are and fix them. In scenarios like these, subcontractors will likely be required to review their work and provide explanations for when and why they did what they did.
Owning the data that details exactly what work was done and what conversations took place around it gives subcontractors the ability go back and justify their decisions, and those justifications are essential for mitigating the risk of liabilities around the issues in question. Of course, reduced risks further protect a subcontractor’s profitability and, most importantly, their reputation.
Driving Success
The digital document and project management solutions used across the industry today can certainly help subcontractors maintain and leverage their data to protect their profit and mitigate risks. Solutions that are integrated across the various functions of the construction lifecycle—from design, planning and construction to closeout and operations—provide the richest data set for everyone on a team, including subcontractors, to refer back to.
With projects becoming increasingly complex and new challenges being introduced regularly, developing accurate bids informed by data is critical for subcontractors looking to protect their profitability. Even if subcontractors are only involved in a few phases of a project’s construction life cycle, they must be diligent about maintaining access to those rich data sets.
Whether doing so means establishing personal access to the tools housing the data or locally downloading the data itself, it’s an important resource that should not be overlooked. For subcontractors looking to develop or maintain a competitive advantage today, maintaining data to extract value from is key for project success.
