7 KPIs for Construction to Maximize Project Performance
Many companies across a variety of industries use key performance indicators (KPIs) every day to track and compare performance against strategic and operational goals.
In Manufacturing, for example, an industry similar to construction, KPIs for construction are often used to optimize processes and set standards for comparison. With the the exception of EMR in construction, the industry has lacked overall objective benchmarks, making it nearly impossible to define construction KPIs and enhance construction project performance.
Putting this knowledge to work, we asked ourselves, "What are common KPIs in the Construction Industry?
So Autodesk commissioned a study with Dodge Data & Analytics, surveying more than 200 US-based contractors to identify and analyze construction process management and benchmarking. This study found that 50% of contractors do not consistently capture and review project data to measure construction project performance.
However, the majority of those surveyed believe this is a major gap in current processes today. The study revealed seven KPIs that most owners agree would be useful for interpreting overall performance. It shows that by adopting specific processes for project management, contracting firms and trades professionals can reduce risk and minimize downstream problems, improving performance.
Using Construction KPIs for Construction Process Management
EMR or Experience Modification Rate is the only current standard metric used across the construction industry. This number is used by insurance companies to gauge both past cost of injuries and future chances of risk. The lower the EMR of a given business, the lower their worker compensation insurance premiums will be.
EMR in construction is thus a measure of safety on the job site, and it is an important metric. Since it is the primary “standard” metric for evaluating contractors, they have an incentive to invest in resources to keep workers safe, ensuring they have a lower EMR score. While this has the ancillary benefit of helping to ensure job site safety, it doesn’t reflect total construction project performance.
What if there were other stated benchmarks, industry standards, that contractors were encouraged to work towards? How would this impact productivity, price, and other factors of a project? That’s where introducing these standard KPIs for construction process benchmarking can assist with meeting and measuring strategic progress.
In this example from the KPIs for Construction study, we look at the impact of managing jobsite safety with software
Improving Construction KPIs
Digital advances in technology for construction management are swiftly removing barriers to measuring performance.
With tools like BIM 360 for construction data management, having a central location to collect and analyze data does not have to be a barrier to measuring performance. Digital tools like smart devices and software geared specifically for document control and issue management are also readily available.
Many companies are using such digital technology to manage different aspects of their construction projects. Now, the information generated from these tools can be used to identify patterns and measure new benchmarks for construction process management.
This progress in moving from manual to automated and digitized data aggregation is enabling more firms to take that broad view of success.
Is Your Firm Ready for the 7 Construction KPIs?
You can learn more about the seven common metrics revealed in our summary report of the Dodge’s Data & Analytics study. The report covers findings around the seven categories of project activities and highlights some striking statistical data that indicates opportunities for growth across the industry. While it’s not meant to be seen as the end-all-be-all, we can at least start the conversation by measuring how contractors, from Trades to GCs to Construction Management companies, currently run their operations. With these first-run benchmarks, we have identified some specific areas where improvements can be made.
Whether you’re a global design/build firm, or a local independent contractor, the story these numbers tells is one you need to hear because they represent a new vision for measuring success.
Click the image to see our interactive infographic if the 7 Major Construction KPIs
Autodesk has also created a tool to help you see how prepared your current processes are today to support this form of construction project measurement.
The Construction Health Check is a free 15-minute assessment. A true “checkup” if you will – that measures if your current processes give you the proper data to measure and maximize performance to reduce risk, avoid downstream problems, and improve quality.