While it’s been widely reported that construction has been slower to adapt to new digital technologies than most industries, it’s changing fast. Now it seems there’s an app for everything. So the challenge has evolved from deciding whether to take the digital leap to selecting and deploying technology in a coherent and value-added manner. Just having the latest tool does not necessarily guarantee results.
As a technology company in the AEC space, we see customers that are successful with their automation strategies and those that struggle to derive sustained value. What sets them apart? The selection and implementation of solutions within a digital strategy that not only recognizes data as a foundational element in the construction management process, but then reimagines workflows around the new capabilities and values that the data delivers.
In this article, we’ll discuss this construct in the context of current and future approaches to time and material (T&M) tracking as part of the field change order process. A workflow that for the longest time has been managed on paper T&M tickets, with significant downstream impacts to process efficiency.
WHAT IS T&M?
Construction projects are fast-paced, and work is often required in the field before change orders and client approvals are obtained. Subcontractors frequently perform work outside their contracted scope on the basis that approvals and change orders will follow. The resources expended are documented on time and material tickets. These paper documents record labor, equipment, materials, and a host of other important data that outline the genesis of the work, what was done, and the level of effort and resources required. From there, the T&M ticket is reviewed, approved, and incorporated into a change order. Simple enough, right?
Sadly, this description understates the problems that arise simply from the process documented on paper. Here are just a few of the key hurdles and the role digitization has in solving them.
CHALLENGE OF PAPER
Paper-based tickets are prone to loss, damage, or becoming illegible. They must get from the field to the office—or offices—of the people who need the data. This drives delays in visibility, awareness, and action.
Data must be transformed from a non-digital asset to a digital dataset, maybe in Microsoft Excel or the change order process. This happens in the contractor, subcontractor, and possibly the owner organizations, and is a hugely wasteful duplicate effort.
The data transformation is susceptible to error, misunderstanding and, of course, delay, while the tools that use the data are often one-dimensional, focusing only on cost impacts. Seeing the bigger picture is challenging when it ultimately rests on insights contained in stacks of paper.
As T&M tickets are commercially sensitive documents, concerning potential impacts to scope, cost, schedule, and contingency, they are typically managed by senior and executive members of the project teams. These include project managers, engineers, and superintendents—personnel whose time is much better spent managing the job.
Ultimately, transforming the data and entering it into systems drives delays and frustrations in a process that documents at-risk work that a subcontractor is performing for the benefit of the project. While contractors and owners typically want to compensate subcontractors in a timely and fair manner reflecting their position as partners critical for the execution of successful projects, the nature of the T&M process often makes that unrealistic. The paradox is that despite the best intents from all parties to compensate subcontractors fairly for the work they do, including timely processing and compensation for changes, the paper-based nature of the T&M process makes that almost unachievable.
These are the sorts of challenges in the construction industry that field-digitization can help solve. A solution that automates the generation of T&M tickets from the source is an opportunity to resolve many of the challenges described above. Let’s consider how this might happen:
Automating T&M tickets avoids time-consuming and wasteful manual data capture in the field and office. This is immediate value to your frontline personnel whom you rely on foremost for accuracy and completeness of data. When data is digitized at the source, insights are immediately accessible and useable. Management can leverage this for timely and effective intervention. In other words, they can do their jobs better.
Data can be shared with multiple stakeholders in real time. Questions can be answered and ambiguity on scope defined while timely change order execution and compensation can be achieved. Data that is entered once can perform a wide variety of functions and deliver value at multiple locations in a workflow and project system.
All parties to a project can rely on the data to manage risks appropriate to them. Subcontractors can focus on timely cost recovery and fair compensation, contractors can better manage project cost impacts and timely processing of change orders, and owners have the necessary information to manage project and portfolio cost and contingency risk. This is the value of digitization; a solution that solves one problem in the field and has the potential to drive multiple downstream benefits. As this value grows, it has the potential to compound benefits, by freeing up time for more value-added tasks, improve relationships by avoiding disputes, and improve the cash flow, profitability, and cost position of all stakeholders on a project.
While there are lower orders of value in digitization that arise from time-savings and process efficiencies, the real opportunity arises from the potential for automation to allow the AEC industry to completely rethink extant management workflows. It is only through new approaches empowered by technology that agents on a construction project can maximize the value of time and drive new process efficiencies on increasingly complicated and demanding projects.
Digitization offers opportunities, but real value and transformative change won’t come from the solutions themselves, but the re-imagination of the construction workflows that they empower.
About the author:
Guy Skillett is the vice president of construction innovation for Rhumbix, a mobile platform that modernizes construction field operations, helping builders go paperless in the field and improving how they measure and manage labor productivity. Headquartered in San Francisco, California, Rhumbix was founded in 2014 by Navy veterans with deep experience in the construction industry and is backed by tier-one investors. For more information, visit www.rhumbix.com.
Modern Contractor Solutions, May 2018
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