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6 Tips Measuring Success ROI

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e-Builder.net 800.580.9322 info@e-builder.net 01/04/19 WHITE PAPER 2 Measuring Success and Capturing Return on Investment When deciding whether to invest in a project-control function and owner-centric PMIS, the most frequently asked questions are "How much does it cost?" and "Is the cost really worth it?" The cost and return on investment (ROI) are scalable and often commensurate with the size and complexity of the program. Below are some major areas in which ROI can be assessed and measured. 1 2 3 Productivity Improvement: Your organization will have the ability to efficiently take on additional projects with existing staff. PMIS, with the support of the Project Control Center (PCC), improves productivity by reducing mundane data re-input, digitally capturing and exchanging data vs. paper-based workflows, and quickly storing and retrieving the latest project information from one central location. With project information being consistently and electronically entered into a central PMIS, hours and days are also saved on consolidating information for project status and cash-flow reports. These improvements can be measured by automatically tracking individual task times and the overall duration of key processes -- such as payments, approvals, and change orders—through your PMIS. Ultimately, you will see an increase in the quantity of projects and construction dollars managed per staff member. Process Cycle Time Reduction: There are significant cost benefits to speeding up reviews, approvals, information transmittals, payments, etc. When information flows more quickly, it reduces the "ripple effect" of negative impacts down the line in a project. For example, when a request for information (RFI) goes unanswered for too long, a contractor may miss the deadline to procure materials that are needed to proceed with work on schedule. If the contractor misses that deadline, it is going to propose a change-order request to get additional money to cover acceleration costs to stay on the original schedule. Those acceleration costs are expressed in paying overtime to staff and a premium on last-minute procurement of materials after the RFI is finally answered. When construction tasks or procurement gets too compressed, the chances for errors and quality deficiencies begin to increase. The risk and magnitude of negative cost and schedule impact on a project drastically go up when information and key processes take too long. When using a PMIS, processes are consistently being executed across all projects, and process durations and iterations are automatically captured. Through historical data automatically reported from the PMIS, you can identify trends on why some projects or staff are performing better than others. Process-cycle time and the number of iterations can be correlated with quantitative data, such as the number of change orders, late payments, disputes, claims, cost overruns, schedule delays, or quality deficiencies reported on certain projects. Project Cost Savings: By improving staff productivity, accelerating the flow of information, and reducing the number of iterations on key processes, owners can capture material cost savings of 4% or greater in their construction programs. For example, when payments to contractors are expedited, not only are late-payment penalties avoided, but contractors also are incentivized to work for you and offer more competitive bids. Contractor carrying costs often attributed to long payment cycle times are reduced. Change-order pricing is generally more fair, and it takes less time to discuss or negotiate the final cost. Staying on schedule and opening the doors to your facility on time can make a huge impact on revenue generation, as well as reduce financing costs. PMIS, BIM, and firm stakeholder design review processes early in a project's life cycle greatly reduce the chances for operational disruption and rework costs. For example, health care facilities have some of the most complex and costly MEP (mechanical, electrical, and plumbing) requirements. If equipment vendors and end stakeholders aren't actively involved in verifying that designs meet their requirements, costly demolition and rework might be required post-construction, which disrupts operations of your facility. Many owners have reported spending hundreds of thousands of dollars in post-construction rework scenarios in which the completed facility didn't match the equipment requirements. When a facility is closed, it isn't generating revenue and strains other facility resources. Jan 0 $ $$ $$$ $$$$ $$$$$ Feb Mar Apr May Jun Schedule Jul Aug Sep Oct Nov Dec Jan Actual Actual Plan Late Cost Revenue Loss Issue Unidentied Issues Derail the Project 6% 10% Cost of e-Builder e-Builder Contingency Current Contingency 4% e-Builder Savings PROGRAM BUDGET +4% - $Millions SAVED "Doing nothing will cost you more than doing something."

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