Consulting project
“The management control of the construction company”

Tools and control methods specific to companies in the sector

The summary of the intervention
The intervention provides construction companies with control tools adapted to their particular activity. The specificity of a construction company, compared to the normal manufacturing company, manifests itself in some crucial processes:
– the process of participation in tenders and the issue of estimates, with the evaluation of  the costs, the volume of works acquired and their quality
– the management of individual sites, whose profitability must be controlled, which is not only connected to its specific costs, but also to its execution times
– management in its entirety, which must receive a margin from construction sites able to cover overhead costs: this poses problems at various times
– in a preventive measure, due to the uncertainty of the acquisition of new orders
– in the final report due to the difficulty in estimating the progress of work.
The intervention responds to these needs, providing specific tools resulting from the experience gained in the sector.

The symptoms of his need
Who directs the construction company perceives problems in the fundamental management processes.
Participation in the competitions absorbs a lot of time and resources. There are many calls for tenders and there are many quotes coming out of the company, but the jobs acquired represent a very low number compared to the total.
Sometimes in order to acquire a job it is necessary to go down a lot with the offer price and a vicious circle is grafted for which you take jobs only if you do not make money.
Once a job is acquired, often with very reduced margins, it is not possible to keep the profitability under control, which decreases until it shows a negative income. Sometimes profitability is not even valued, except for the feeling that it is not satisfactory.
The management of the company is poorly planned, based on contingent circumstances, such as the sudden need to close a job to fix the budget of the year, or to acquire jobs to face sudden moments of inactivity of the staff. There is a lack of work planning beyond the following months and there is a general feeling of uncertainty.

The course of the intervention
The process of participation in tenders and the creation of quotes is monitored carefully. It is structured so as to be able to manage the level of attention, and cost, assigned to individual tenders or estimates. The process of tenders becomes an entity that is controlled in its profitability and inexpensiveness, with a work plan and a budget of its own.
Construction management is structured according to project management principles, where both profitability levels and time compliance are planned and followed. Financial management, contract risk management, organizational aspects and data flow are also dealt with in the management of construction sites. Control instruments are also developed to plan the future needs of construction sites and the margins required by the company. The budget is set up so as to be able to manage the not knowledge about the entry of new contracts.

The human resources involved
The intervention involves the management in the part of understanding their needs and strategies.
Human resources at the operational level will be involved in the technical and operational aspects of the project. Each aspect of the project will be monitored together with the management, while the operators will take input, needs and cases.
As in any Farnetani Consulting project, we will tend to limit the impact on the company’s ordinary activities, alternating the people involved, limiting their use, and optimizing the interaction with the consultant based on the work requirements of the individual operators.

The intervention can last from ten to fifteen days of work of a consultant, depending on the size and complexity of the company. In any case, the duration of the intervention is agreed on the basis of a specific quote. The days are scheduled according to the operational needs of the company.

The advantages achieved
The company has an area of contract acquisition that operates efficiently and effectively. The acquired orders are known, examined and monitored in their progress. Once a cost or time deviation has been ascertained, the company work to find the causes, remove them and not meet them again in the next order. The critical moments caused by the lack of work are identified beforehand and managed, acting on the leverage of the acquisition of new orders.
The management of the construction company, difficult in many respects, acquires a sense of planning and there is a widespread feeling that, despite the difficulties, the system is under control.

Future developments
The system can be developed and refined, in the following phases, in many ways.
The level of monitoring of the bidding process, the analysis of the orders acquired and the search for the causes of deviations can be increased.
A future development of the work, often requested by construction companies, is the intervention on the organizational structure, in order to make the company more receptive to the control and optimization tools of the construction sites. Analysis, monitoring and removal of the causes represent a virtuous cycle that, if pursued constantly over time, leads the construction company to high levels of efficiency and effectiveness, and therefore of profitability.