Challenges and Opportunities for Construction Project Cost Management in Canada Revealed in Survey

Procore Technologies has released Canadian focused findings from a recent study developed in partnership with Dodge Data & Analytics. The report found both owners and contractors in Canada face a variety of challenges when it comes to project cost management, but believe using one streamlined tool will help facilitate construction projects and cost management more efficiently.

Conducted in July 2021, the report explores the industry’s perception of project cost management and how construction professionals across multiple regions leverage technology to effectively manage costs. Participants included construction owners, general contractors, and subcontractors in the public and private sectors across Canada, Australia, New Zealand, the United Kingdom and the United States.

When it comes to leveraging technology to track projects and costs, Canadian organizations are split – with many using multiple applications and spreadsheets to manage the information. While many are confident in their ability to track information to the benefit of their business, there are still many areas where there are needs for improvement.

Key Findings show Canadian confidence:

• Of all the regions surveyed, Canada led the way in knowing the real-time profit/loss status of projects/portfolio, with 68% of Canadian respondents agreeing or strongly agreeing that they know where they are making or losing money on a project or across their portfolio, at any given moment.
• 58% of Canadians indicated they can easily uncover cost details and create comprehensive financial reports from a single source of truth.
• 63%  said they can dynamically track every dollar in their budgets and forecast critical costs with real-time data from the field, while staying in sync with the accounting system.

The report shows that owners expressed more confidence in their overall cost management capabilities than contractors surveyed, and each type of owner studied (public and private) is more confident than either type of contractor (general and trade). General contractors are more confident than specialty trades.

When asked which cost-management activities their company has the greatest difficulty with, the top five selected by Canadian organizations are as follows:

• Determining appropriate contingency amounts 32%
• Accurately estimating total cost to complete for activities in the work breakdown structure 31%
• Tracking costs for every aspect of the job to determine how they impact overall project cost 31%
• Control of project cash flows 29%
• Understanding in real-time where they are making or losing money 26%

Canadians polled are collaborating with external partners in various ways including older, traditional processes – when it comes to workflows related to cost management:

• Email and attachments 17%
• Generic, third-party collaboration software 17%
• Telephone and personal communication 16%
• Manual processes relying on printed paper 14%
• FTP server managed by a project team member 13%

The Cost of Technology: Globally, general contractors and specialty contractors reported notably different levels of satisfaction with their use of software for cost management. The disparity sends an important message that the right technology – and the right amount of it – is needed to effectively support the workflows of every team member in order to advance the entire industry.

• And, while a high level of Canadian respondents indicated they know where they are making or losing money on a project or across their portfolio at any given moment, the results show there is room to spend more on the technology they need to be successful with 20%  of Canadian organizations said they are spending the right amount of time on technology required for cost management practices and 30% said they are spending somewhat or much less than they should.

Improvements Needed in the Next 3-5 Years: When asked about the most important future needs to solve with project cost management, tracking dollars and data were high priorities. Globally, forecasting critical costs with real-time data from the field topped the list (30%). In Canada, respondents cited these top three as the most important:

• Dynamically tracking every dollar in my budget 30%
• Leveraging data from previous projects to benchmark cost performance 29%
• Accurately assessing risk related to any changes or performance issues 29%

The findings show significant diversity between the needs identified by owners and contractors.

“The report shows that construction owners and contractors alike are ready and able to participate in a more holistic and integrated cost management approach,” said Stephen Jones, senior director of industry insights, Dodge Data. “Focusing on using fewer, more comprehensive technology tools and increasing all stakeholders’ engagement with cost management will ultimately generate better cost-related outcomes for all parties.”

For more details, visit: procore.com