The most important KPIs for project management in the construction industry

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Demi-Jo Smith, June 9, 2022

Project management in the construction industry is unique. You must deal with a huge number of different parties involved, along with a very tight deadline ánd budget. To make sure the project runs smoothly, it’s smart to keep an eye on several key performance indicators – or KPIs for short. In this article we explain how to keep track.

Project management in construction

Project management is always a puzzle. Together with various parties, you try to reach the finish line. Within budget and with the best result. But every industry has its own unique challenges. The construction industry is no exception.

The construction industry is currently struggling with a severe shortage of personnel, materials are limited and there are more and more environmental issues to consider. Moreover, there is a lot of fragmentation taking place: as a project manager in the construction industry, you must deal with many different subcontractors, who in turn call in different parties and specialists. That makes communication and quality assurance even more difficult.

Moreover, the margins are small. Failure costs cut directly into profits, so the pressure is high. To be successful in the construction industry, project management must therefore run as smoothly as possible. Good software helps with that.

Also read: Construction project management – how to make it a success

Project management in de bouw
How do you keep an overview of all current projects?

The three phases of project management in the construction industry

No projects in the construction industry are the same. Yet project management in the construction sector is characterised by three phases that always return: the design phase, execution phase and evaluation phase. In this article we will focus on the execution phase.

KPIs in construction project management

With KPIs, you make specific results measurable. We share the KPIs that are important in the execution phase of project management in construction. Along with tips for making those KPIs a success.

KPI 1) Budget project management

Construction projects (nowadays) operate on small margins. When unforeseen costs are added, you immediately cut into profits. And with too much setbacks, a project can even become unprofitable, while you remain contractually obliged to complete it. With project management in the construction sector, it is therefore extra important to keep an eye on the budget.

Protip: You do this by closely monitoring all expenses in one central digital system. This creates an overview of checks and balances and ensures that you don’t overlook even the smallest costs.

This immediately provides an opportunity to hand out compliments.

KPI 2) Project deadline

Consumers purchase a property within a project. Or a company commissions the construction of a building. Whatever the situation, as the executor you set a deadline when you will deliver the project. In doing so, you contractually agree on how much overrun you are allowed to have. Do you have more overrun? Then you will have to deal with (large) fines.

As a project manager, it is important to keep a close eye on whether the deadline remains achievable and to adjust where necessary. But in the construction industry you work with so many parties that you quickly lose the overview. So how do you keep track? 

Protip: Plan check-in moments. Not just to see what still needs to be done and whether the project is on schedule, but also to see what is going well. This also provides an opportunity to hand out compliments.

KPI 3) Quality

Quality is a broad concept within project management in construction. One way to make it measurable is to identify the number of faults and their associated solutions.

Protip: As a project manager in the construction industry, it is valuable to document quality well. Also after completion. As the projects progress, you will recognize patterns. For example, there are always problems with the windows that are installed by a particular subcontractor. In that case, you know that you have to do something about it.

Also read: How to find the right software for quality assurance in construction?

KPI 4) Proof

Within a construction project, it is important to be able to prove who did what. Especially with so many different parties.

Protip: Make sure there is a proof of completion for each part, for example with a signature and photo as evidence. As a construction company, you reduce the costs of failure because you are immediately aware of problems or defects. This is beneficial for the client(s) as well. This way, they will have a grip on exactly what they have bought.

Follow a set checklist to make sure you don’t forget anything.

KPI 5) Safety

Working safely is hugely important in the construction industry. As a construction worker, you wear protection for your head, hands, feet, ears and eyes. When working at heights, you wear a leash. And you only work with decent equipment, of which you know how it should be handled.

Protip: Checking for certificates (VGA and VGM) is a good way to make safety measurable. That way, you can be sure that everyone on the construction site has the right papers and therefore the right knowledge of working safely.Protip: It is also a good idea to standardise workplace inspections. Follow a set checklist (for example, using a digital tool) to make sure you don’t forget something.

KPI 6) Overview in project management

Overview, you either have it or you don’t. How can you make that measurable?

Protip: You do this by dividing the various processes into separate tasks and by making the status per task and per subcontractor transparent. For example, create a dashboard where you can see at a glance whether all schedules are met, and which tasks are ready for you and your colleagues.

Protip: Another way to keep an overview is by saving your files in a smart way. By working together in one online file, you make historical versions transparent and (using a QR code) you are able to check whether you have the latest version in front of you.