Harness the power of operations data to manage change orders more efficiently

2月 24, 2020 ブログ No Comments »

Harness the power of operations data to manage change orders more efficiently

A highly complex industry with a wide variety of players, building design and construction presents a real challenge for optimization, since validating the quality and timeframes of work is difficult and time-consuming.

Here is why change orders keep draining your budget

As every building project owner knows, things in construction tend to happen hazardously triggering multiple changes to the original contract. A recent report found that a typical commercial construction project involves on average 56 change orders, which not surprisingly constitute the most common cause of construction delays driving budget overruns and costly litigation. The toughest part is the disputes over verbal changes, often due to a disagreement about its validity and additional payments. Litigation lawyers admit that major disputes in construction arise in fixed-price contracts when subcontractors perform work on an unwritten change order.

If we look closer, the root cause of the overall uncertainty and the abundance of change orders comes down to the absence or poor functioning of data management systems on construction sites. Optimizing internal workflows and introducing corporate tools to manage data streams in construction is a critical necessity, but the reality is that very few enterprises have a credible system in place to efficiently collect operational transactional data.

Rely on operational data to optimize change orders management

McGraw-Hill Construction cites better communication via technology as one of the core strategies to cut rates of change and error in construction, while another report suggests that extracting actionable insights from operational data can increase enterprise profits by up to $117 billion globally. To leverage the power of data analytics to mitigate the factors that drive uncertainty in construction, parties need to adopt a lean toolset for efficient collection and management of change order transactional data.

1. Collect 100% credible data

  • Pull data points into a scalable cloud to have a 360-degree real-time view of the project’s stage.
  • Manage change orders in a single interface where they are signed between the parties and automatically date/time stamped.

2. Leverage preventive monitoring.

Prevent inefficiencies of construction sites by pulling the data points on the project stage and discrepancies between the terms set in contracts and the actual state of affairs.

A reliable data collection system running across the project will ultimately optimize time and asset management on construction sites and ensure that costs associated with change orders remain low making it simpler for subcontractors to correlate and track information. And Taraxa offers just that — a flexible cloud-based data collection solution powered by distributed ledger technology that makes it simpler for general contractors to track progress across multiple teams, with smart contracts automatically issuing invoices and payments linked to project milestones.

Monitor numbers, stay within budgets and make better data-driven decisions with Taraxa. To learn more, reach out at partnerships@taraxa.io

Sources:

 

The Trouble with Change Orders

Major disputes can arise in fixed-price contracts when subcontractors perform work on an unwritten change order, and…

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Deloitte Survey: Data-Driven Culture Helps Companies Outperform Goals – Press Release

More than two decades after the term “big data” was invented, a majority of companies still do not have initiatives in…

www2.deloitte.com

 

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