A large general contractor needed external support to improve their ability to predict margin erosion on large projects before it became an issue.
After engaging Carpedia, the assessment identified the following areas of opportunity:
- Budgets were not based on historical data and took too long
- There was no standardized method to schedule, manage workloads, and track variances
- Resource management tools and practices were not standardized and did not provide actionable information to manage burn-rates to avoid margin erosion
- Project reviews were not being completed consistently both in terms of frequency and effectiveness
- Executive reports did not contain actionable information
- Financial reviews were not frequent enough to give leadership visibility to variances
Carpedia partnered with the client to enhance the management performance system with the goal of improving predictability of margin erosion, resource balancing, and project management throughout all business units.
- Created a method change scorecard to provide visibility to which SBUs were adhering to the changes and how much savings they were contributing
- Utilized historical cost data to create conceptual budgets
- Enhanced the Project Review process
- Developed new tools for project resource planning
- Implemented a new resource management dashboard to highlight to identify unacceptable ‘burn’ rates
- Developed a business management calendar to align all business performance meetings
- Implemented an Executive Dashboard to give leaders visibility to KPI’s
- Improved active management through Carpedia College training and on-the-job coaching
The Results
The engagement transformed the client into a data-focused organization, equipping them with the systems, training, and tools to track key metrics and variances effectively. Operational changes empowered leaders to clearly report team status and proactively address potential margin erosion. These improvements are now being implemented company-wide.
Results included:
- 17% improvement in gross margin
- 75% improvement in estimating capacity
