Biz Intel: To Measure Data is to Manage it

by MARC KRICHMAN, President, Lantern Data Systems | March 7, 2016

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Healthy profit margins don’t come easily to design and construction companies. Every project is different, so it’s hard to deliver consistent quality on time, within budget. The key is to avoid problems before they arise and implement best practices across the organization. And that takes information.

Enter business intelligence. ‘BI’ aggregates information from multiple sources and presents it in easy-to-grasp formats. Decision makers use that information to identify problems, single out best practices, and improve the performance of individuals and the organization.

When Data is TOO DISPERSED

BI solves the problem of vital information being hidden from the people who need it. Three examples:

• A large global program management company has so many departments, managing vendors and subcontractors that senior managers couldn’t even identify major vendors! Contracts were spread over many systems, and aggregating data was so labor-intensive as to be impractical. The challenge was perfect for a business intelligence solution. A BI system gathers data from all of the company’s contract systems and presents it in an easy-to-read dashboard. The contract management team now has the information needed to make better, more timely decisions;

• An ENR Top 400 general contractor’s senior project manager needs to mentor trainees, but the senior managers don’t have time to retrieve project data such as profit, past-due receivables, and job-to-date costs from the financial system, and to gather documents such as RFIs, submittals, and action items from the project management system. Instead, a BI system automatically gathers the data and presents it in a purpose-built dashboard. Problem solved;

• A leading regional construction firm had people enter productivity and profitability data into multiple Excel spreadsheets. Despite consuming vast resources, the process failed to deliver adequate results. After implementing a BI system and dashboard, more and better information reached key people faster than ever. That, in turn, has led to an increase in staff productivity and job profitability.

BI insights improve performance

BI’s greatest benefit is the way it enables company-wide performance improvements. For example, my company, Lantern Data Systems, recently helped an organization identify a way to improve client satisfaction across the company.

We aggregated data that had been contained in a mix of Excel spreadsheets and web survey tools. Key outputs included:

• The top 10 projects (most satisfied);
• The bottom 10 projects (least satisfied);
• The top 10 clients (most satisfied);
• The bottom 10 clients (least satisfied).

The dashboard also compared performance by project type.

Data revealed most issues were caused by miscommunication. Managers compared projects and clients by categories to find the highest performers were all in operations and maintenance (O&M). Why? O&M projects had better communication guidelines.

The key to improving client satisfaction became obvious: Learn from O&M communications guidelines to improve guidelines across all categories. As a result, client satisfaction scores have risen, leading to more, better referrals, and a greater rate of repeat business!

nip problems in the bud

Another company has set up a system to predict potential claims by analyzing the number of RFIs by project phase. Managers can see, for instance, when the number of RFIs exceeds 20% of the average for like projects or contracts. Although it’s still early, they anticipate reducing the number of claims by flagging problems sooner.

The same company also compares invoicing to the degree to which a project is complete. Doing so enabled the company to see that a particular contract was 171% invoiced but only 60% complete. This meant either there was a serious problem with invoicing or there were contract changes which hadn’t been input into the system. Either way, the potential problem was identified, and identified quickly.

Based in Sacramento, the author is president of Lantern Data Systems, a provider of business intelligence (BI) software platforms and consulting services to AEC firms for better decision making and risk identification. A Newforma partner, Lantern combines data from Newforma’s Project Center and other systems into one intuitive platform to enable improved performance. For more, go to www.lanterndata.com.