A new report from Procore and Dodge Data & Analytics looks at the role technology has to play in construction cost management, and suggests that contractors and owners both feel they have more work to do to improve financial oversight.

The Construction Cost Management Report surveyed the opinions of 243 owners, 240 general contractors and 241 trade contractors across Canada, the United States, the United Kingdom, and Australia/New Zealand. It looks at the industry’s perception of project cost management and how construction professionals leverage technology to manage costs.

One of the key regional findings of the report is that Canadian respondents scored highest in knowing where they are making or losing money on any project at any given moment. On the flip side, less than 20 percent are spending the right amount on technology.

“Cost management is one area that has often taken a back seat as construction has become more digitized,” said Jas Saraw, Procore’s Vice President for Canada. “Understanding the financial health of your project in real-time can have a significant impact on operations and on the bottom line. This report offers great insight into both the challenges and opportunities for the construction industry, and how technology can play a significant role with project financials.”

When it comes to leveraging technology to track projects and costs, Canadian respondents were split, with many using multiple applications and spreadsheets to manage information. While many are confident in their ability to track information to the benefit of their business, there are still many areas where there are needs for improvement.

Fifty-eight percent of Canadians indicated they can easily uncover cost details and create comprehensive financial reports from a single source, while 63 percent said they can dynamically track every dollar in their budgets and forecast critical costs with real-time data from the field, while staying in sync with the accounting system.

The report shows that owners expressed more confidence in their overall cost management capabilities than contractors surveyed, and each type of owner studied (public and private) is more confident than either type of contractor (general and trade). General contractors are more confident than specialty trades.

When asked which cost-management activities their company has the greatest difficulty with, Canadian organizations identified determining appropriate contingency amounts (32 percent), accurately estimating total cost to complete for activities in the work breakdown structure (31 percent), tracking costs for every aspect of the job to determine how they impact overall project cost (31 percent), controlling project cash flows (29 percent), and understanding in real-time where they are making or losing money (26 percent).

Across the survey, general contractors and specialty contractors reported different levels of satisfaction with their use of software for cost management. The disparity, says Procore, sends an important message that the right technology -- and the right amount of it -- is needed to effectively support the workflows of every team member in order to advance the entire industry.

And, while a high level of Canadian respondents indicated they know where they are making or losing money on a project or across their portfolio at any given moment, the results show there is room to spend more on the technology they need to be successful. Twenty percent of Canadian organizations said they are spending “the right amount” on technology required for cost management practices and 30 percent said they are spending somewhat or much less than they should.

When asked about the most important future needs to solve with project cost management, tracking dollars and data were high priorities. Globally, forecasting critical costs with real-time data from the field topped the list (30 percent). Canadians’ top three responses were dynamically tracking every dollar in my budget (30 percent), leveraging data from previous projects to benchmark cost performance (29 percent), and accurately assessing risk related to any changes or performance issues (29 percent).

Featured image: Canada led the way in knowing the real-time profit/loss status of projects with 68%. (Business Wire)