Building Performance - What are the most important performance indicators (KPIs) in construction?

Date: 16-08-2022
Author: Alina Răfoi

Top KPI Constructii BlogRegardless of the industry, indicators are performance measurement tools and are the only means of knowing if a process's performance is improving or degrading and if an intervention is required.

Performance indicators (KPI) are of several types: strategic indicators (market share, profit, turnover, customer satisfaction), managerial indicators (availability of resources, costs, budget), operational indicators (individual performance, process performance, products, specifications, efficiency). If not measured and treated properly, performance indicators can negatively influence the results of companies operating in the field.

How is the success of construction projects measured? Apart from financial indicators, what else should construction companies pay attention to?

For most of us it is easiest to track and see the financial side of a project as the main performance indicator. According to Euroconstruct, 43% of construction companies give priority to financial objectives. However, there are a number of other essential construction KPIs that can indicate whether a project is on track and provide more useful information on changes that need to be made.

Using only financial indicators to measure performance is like counting the calories in a cake, but only after it has been taken out of the oven. While it's interesting information for those with dietary concerns, it's a little too late to make any changes to get a different result. On the other hand, if you calculate the calories and measure the ingredients correctly before you put them in the oven, you will know exactly what the end result will be. But let's get out of the kitchen and back to the site, shall we?

What other performance indicators should be monitored besides financial ones? How to ensure that you have a profitable business, efficient teams and satisfied customers? Below we present 3 examples suggested by CFMA (Construction Financial Management Association), but we also welcome your input.

Security on the construction site

It goes without saying that a safer site means less risk and, as a result, lower costs in the long run. Whenever security is compromised on the construction site, you can waste valuable time and money trying to fix the problem. In addition, security incidents can mean higher insurance premiums. Therefore, knowing and understanding the safety rating is critical to keeping costs down and staff productivity up. Important construction safety KPIs include: safety level / incident, number of safety meetings / communications, number of accidents per supplier.

Quality of construction works

Tracking construction project quality metrics is a surefire way to stay on budget and deliver projects on time. The following construction KPIs will help site teams maintain a high level of quality: number of defects, number of workmanship defects, time to fix defects.

Employee performance

Regardless of the field in which they operate, people are the most important cog in the gear and can influence (in any direction) the balance. Yes, it is important to measure the performance and efficiency of employees, but it would be equally interesting to measure their satisfaction. An engaged and happy employee will work more efficiently in the long run and contribute more to the end result.

Together we build performance

To begin implementing and evaluating construction KPIs, standards must be established to ensure correct input and use of information. Standardizing and automating construction processes is now easier than ever thanks to digital transformation. This change includes cloud technologies that improve workflow by allowing real-time sharing of information from the office to the site and back.

A recent report released by JB Knowledge found that 30% of companies surveyed said they had problems because they were unable to integrate the many applications they use.

This is precisely where we intervene with a complete and integrated software solution, in the cloud, with functionalities dedicated to construction companies. SocrateERP provides an integrated application to companies active in the field of construction and helps in the efficient management of all processes in the company: procurement, management of contracts, costs, consumption, employees, equipment and machinery, maximizing profit through the efficient execution of each project and the possibility managing more projects with fewer resources by integrating and automating key processes.

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