How NAVBUILD address the Construction Project Risks?
The Construction projects are unique and are perceived to be inherently risky due to the complexity, Long Project Period, Cost Changes, complicated contracts and involving complex relationships in several tiers of contractors, Suppliers and Architects. These risks spread throughout the construction project life cycle and have the potential to lead to undesirable consequences in project delivery on time, budget and Profitability.
Significant inefficiencies and problems still exist in both manual operations, Generic ERP or non-integrated solutions in the construction Industry. NAVBUILD, Microsoft certified Engineering & Construction Industry Ready solutions, designed to address and manage the key risks of the construction Projects, namely
Financial Risk – project exceeds its budget and costs and endangers the financial health of the company
Budget overruns are a real problem, and not always a matter of poor construction supervision, they are often the result of poor estimates or inaccuracy in cost estimation, bad planning, missing the change orders, poor procurement decisions or lack of project governance. This is one of the major risks and it could affect the entire project margin completely. You need to know what causes them and, even more importantly, how to avoid them.
Change/Variation Orders Risk– lead to delay project completion, decrease productivity, increase project costs, Complex approvals process hamper procurement
Change/variation orders are inevitable in most of the construction projects, and its major risk factor when not managed on time and properly including approved and unapproved change orders. The change order can be cost increase, time delays or poor work. Contractors are always worried about the implications and potential risks associated with change orders claims.
Schedule Overrun Risk- Delay can lead to many undesirable effects including devastating financial consequences and contract termination
Schedule risk is constant when it comes to construction projects of all types and sizes. A great deal of inefficiency and cost mismatches exist without the use of baseline, compared with the project schedule and not collaborating with the Project team real time. The full traceability of baseline history and monitoring schedule variance will help to avoid the schedule risks
Administrative risks – lead to missed approvals on costs/Orders, missed Invoice & Payments on time)
Half of the battle with time and cost overruns is due to admin issues, either project processes are not in order, no standardizations, Inadequate cost monitoring and control systems or lack of real time data or approval process for the informed, timely decisions
All the above risks can be addressed in both the pre-construction phase and execution phase of the Construction Project life cycle. Industry ready ERP System with best Practices are needed to handle and manage risks so that the success of projects can be ensured. The initial estimates of cost, time, and trouble are bound to change dramatically as work progresses, But the directors and top management of the company can identify, analyse, and rationally control these risks by proactively monitoring every cost, revenue and communication from planning to closing and make informed decisions.