The vast majority of large-scale construction projects erected worldwide simply wouldn’t be possible without the combined work of several different subcontractors. But with project managers having to oversee the work of hundreds of different companies and individuals at any one time, solutions like construction ERP are becoming a near-fundamental part of the management process.
Subcontractors in the Construction Industry: The Requirements for Success
Every new home built in America requires, on average, the efforts of 24 different subcontractors ranging from electricians and carpenters to landscapers and roofers. When scaling up to large or more complex construction projects, project managers often need to work with hundreds of different subcontractors across a number of years to ensure a project is delivered both to spec and on time.
Subcontractors often handle highly specialized aspects of a particular build, with project success being heavily dependent on their respective competencies. This is why nurturing a trusting relationship between project managers and subcontractors is so vital; managers aren’t simply trading materials or expertise with subcontractors; they’re being relied upon to deliver crucial components of often elaborately designed buildings.
A successful contractor and subcontractor relationship demands clear communication, timely responses, quality performance, and payment transparency across every stage of each subcontractor’s role on a particular project.
To achieve this for a vast number of different subcontractors at any one time is an overwhelming challenge for construction project management professionals unless they’re able to leverage solutions like dedicated construction management software in order to resolve these challenges.
How Can Project Managers Ensure Subcontractors Deliver?
One of the biggest challenges when managing subcontractors is the fact that no individual or company works in isolation. Everyone is responsible for a part of the same overarching project, and a significant interdependencies between various tradespeople are inevitable and necessary to complete a construction project successfully.
Coordinating, whilst keeping everyone up to date on the project’s eventual design, demands a centralized platform. By keeping all subcontractor information in one place, project managers create a singer version of the truth, and they can check on the current status of the work of every subcontractor they’re working with. Changes in scope can be ascertained and communicated easily between everyone involved, enabling project managers to keep control over unforeseen changes.
Learn how IFS Cloud’s construction ERP software can aid even the most complex, critical infrastructure projects here.
The centralization of information and communication should also extend to further software solutions; often, different companies may rely on different software for reporting, invoicing or other key procedures. This creates a complex and often disconnected business system that’s held together by custom (unsupported) API connections. For a project manager, having real-time business information isn’t merely nice to have, it’s a must-have, especially when also managing and reviewing subcontractors’ progress.
Both centralization and construction-specific solutions also effect one of the most significant challenges faced by project managers, paying everyone on time. A project’s cash flow has to be visible and projected regularly to ensure all subcontractors can be paid for the work they’ve completed, with enough cash remaining in the bank to keep the project running smoothly.
By handling payment concerns alongside project timelines in a single solution, project managers can easily oversee the status of their project as well as any actions they need to take in the immediate term. IFS Cloud’s industry-specific capabilities, which include dedicated cash planning and schedule of work modules can also assist project managers by providing a superior level of financial visibility over a project, with sector-specific features designed to ensure large-scale projects can reach completion with as few bumps in the road as possible.
Learn more about Construction ERP and why choosing the right provider is vital for project managers in the construction industry here.
Subcontractors in Construction: Planning for the Worst-Case Scenario
Profit margins in the construction industry are some of the lowest of any sector on average, usually falling at around 3-5%. Overpromising in terms of design features or timescales, or subcontractors going over budget or under-performing, can completely derail even the best-laid plans of any build.
This is particularly true today, as supply chain disruptions, building material price rises, and other factors continue to impact the entire construction industry. To ensure these knock-on effects don’t become catastrophic, project managers have to be constantly forecasting to check the status of a project across every stage of its often-multi-year construction plan.
By forecasting regularly, project managers can better understand all facets of a project’s build. This process can reveal potential problems with a project or a particular subcontractor, which can then be rectified ahead of time.
Utilizing a construction ERP system also means managers can wield a greater level of control over the individual performance of subcontractors on any given project. This ability to improve the evaluation process ensures that every aspect of a project’s build can be signed off on quicker, and those responsible for the next task can be notified in a similarly efficient manner.
How IFS Supports Subcontractor Management in the Construction Industry
With the IFS Cloud, project managers can access construction ERP software and other advanced construction project management solutions in one centralized platform. Project managers can move away from trying to handle hundreds of different excel spreadsheets at any one time; instead, we can help to visualize all relevant data in a single, combined solution.
IFS Cloud also provides industry-specific solutions for the construction sector, including a heightened level of asset lifecycle control to help improve the efficiency of both the construction process and overall profit margins. Project managers can clearly assess real-time information relating to project timescales, subcontractor performances, and current subcontractor responsibilities, as well as overall productivity.
If you’d like to learn more about how to improve subcontractor management in the construction industry with construction management software, you can find more information about IFS Cloud for Construction here.
