Design-Build – How Will Construction Companies React?

Design-build construction

As the profitability situation for Construction and Architectural firms tightens, how will your company react to these developments?

  • With Missouri’s passage of new design-build legislation, 50% of U.S. states now allow the delivery method to be used on public projects, according to Building Design + Construction.
  • The new Missouri law permits cities and school districts to issue one contract for both design and construction services versus the traditional design-bid-build process many public entities utilize.

  • A study by the Construction Industry Institute and Penn State University found that projects using the design-build delivery system cost approximately 6% less and are completed almost 34% faster than those using design-bid-build.

Undoubtedly, the most pertinent bullet point above is number three. The business and technology implications for Architectural & Construction firms are challenging, and with growth flat on larger projects (as we all hold our breath for the upcoming election), this represents even further pressure on tightly managing profitability – project by project, on site and in the office. Most importantly, your clients will be leveraging this model to demand faster response and cost savings. How will you react?

Internal systems will need to be both expanded (to accommodate tracking the design phase) and streamlined to accommodate the hand-off from Design to Construction. Technology can help, but first there are several challenges to overcome:

  • Most modern Construction systems do a pretty good job of tracking the construction phase of this process, but expensive ‘work-around’ processes are needed to track the design phase.

  • Profitability tracking has to expand to include back office designers and business development personnel in order to track true profitability.

  • Management needs much more visibility into this design process to manage profitability earlier and to develop ‘walk-away’ points during the design and RFP response stages.

  • Hand-offs from Design to Construction phases can no longer be expensive, clunky integrations between disparate systems – it adds unnecessary costs, even as margins decline.

Wait!  You are expected to do more, faster AND at less cost? Retirement may seem like a pretty good option right about now, but wait – there is a way – and here are our recommendations:

  • It’s time to start looking at your technology backbone and realize that ‘Construction’ Solutions are just that and no more. They will not serve these new expanded needs.

  • Stop adding new software programs to an already complicated technology stack – it’s costly, complex and expensive.

  • Get out of the data center business as your core competencies are design and construction, and with each new requirement you notice that IT guys seem to multiply like rabbits.

Microsoft Dynamics AX (also known as Dynamics 365) is an enterprise-wide system that easily handles back-office design processes as well as field based labor and delivery functions. From any device, anytime, anywhere. Because it is cloud-based, you can eliminate expensive data center costs and eliminate down time problems worldwide.

With an enterprise wide system you can not only track every cost associated with a project (Business Development > Design > RFP Response > Design to Construction Handoff > Materials and Labor Requirements > On-Site Construction Project Management & Control), but your management can begin to look at Projects holistically. You no longer need to check multiple ‘point systems’ for progress and profitability, you have one cradle-to-grave tracking system.

The cost savings from such a system will help you meet your customers’ expectations of cost savings inherent in a design-build scenario. And, by making data more accessible for decision making, you can build in the speed they will expect.

So, don’t retire yet, stop wondering about the ‘Cloud’ and leverage it to simplify your business. Microsoft Dynamics AX can help – and so can we…

Check out our other blogs in the Construction series, including:

4 Technology Trends Construction Firms Should Embrace

Are You Ready for Trump’s Construction Economy?

Dynamics 365 – Disruption for the Construction Industry

KPMG: Slow Technology Adoption Plagues Construction Profitability

Why do Construction Companies Struggle with Automated Job Assignments?

If you want more information about Microsoft Dynamics AX, visit our Construction page or Contact Us today!

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