What would you think if I were to tell you that daily reports are the most important set of documents to any contractor involved in the commercial construction industry? Let me guess, you’d think I’m crazy. It probably seems a little odd that someone would say this, considering that contractors often overlook daily reports. I bet that if you asked 1,000 construction industry veterans the question, most would say that the contract is the most important document. Or the drawings and specs. Or the payment applications. I bet almost none one would say daily reports (unless you have been in a nasty dispute). Believe it or not, daily reports have a unique (and often unknown) tie to the profitability of a construction company – if they are utilized in the correct manner, of course.
The whole point of submitting the daily reports is to document the history of the job. Daily Reports certainly didn’t become a contractual requirement to give supers, foremen, etc. something to complain about. Rather, they serve a very significant, important purpose in construction. Construction daily reports are the only pieces of documentation that can collectively recreate the detailed history of the job. These documents are designed to tell stakeholder’s the actual story, rather than the planned story of construction – and they are loaded with all the data that enables one to analyze planned versus actual cost, schedule, productivity, etc. across any level they desire. The analysis of the data that represents the actual details of ones projects is beneficial in the beginning of a project (when preparing the plan), throughout a project (to gauge performance, progress, productivity and for management and forecasting purposes), and at the end of the project (to closeout a job, especially if there is a claim). These are all very important things when it comes to profitability in construction.
We live in a world where 75% of commercial construction projects exceed the budget and 90% of projects are delayed. To maximize profits construction, it is important to ensure that you minimize budget overruns and delays – or at the very least, getting compensated for it. This requires the ability to accurately understand the detailed history of the project in order to pinpoint and explain causation and responsibility for the impacts that led to the overages. I have spent the majority of my career as a construction consultant, so I have had an inside look at how much contractors really know about their projects and how to make use of their own information – and it isn’t pretty. I have routinely seen general contractors and subcontractors spend more time and money that necessary and also underpaid on projects simply because they did not have data – their data – accumulated, organized and analyzed to explain the difference between their original estimate and what is actually happening on their job.
In reality, a construction site is one of the most dynamic places on Earth, with an endless number of activities taking place every single day. Dozens of interdependent companies with competing financial interests work simultaneously to build one thing. Every day presents new challenges without the luxury of an “assembly line” routine (like many of the other industries). Simply put, Construction is organized chaos. Because of this, it is imperative to smartly track what is taking place, every day, in the greatest possible detail. “Daily’s” really are the only acceptable tracking system in construction and are the only set of documents that collectively provide the opportunity to tell the whole story in construction.
By using daily reports intelligently, project managers will be better prepared to control the chaos and reduce the risk of financial underperformance. Simply put, those in construction that know more about their projects will likely make better business decisions. Those who make better business decisions, in any industry, will make more money. Construction daily reports are very useful documents that can be the difference between a profitable project and a project that ends in a protracted dispute.
If you are interested in this topic and/or agree with me here and want to learn more about our game changing project intelligence and data management technology, SmartPM, please visit our site (www.smartpmtech.com).