Data Overwhelm – How to Find a Needle in a Haystack
Twenty years ago, a construction company showed up on jobs and built things. Technology was not a big factor in the way construction business made decisions. Fast forward to today and the average construction company has more data than it knows how to use.
Accounting, estimating, BIM, equipment, scheduling and other systems flood companies with data. The real question has become how to leverage that data to make smart business decisions.
Many construction companies today add new systems with the belief they will add insight and perspective on their business. The problem is that once the system is in place, the key variables are not defined. This fact leads companies to spend countless hours mining information from systems to answer questions.
Leveraging a system means not just thinking about how to implement a system, but taking time to ask the questions, “What information does the company want to get out of this system? How will the information this system provides impact the company’s business? What are the key variables the company should measure once the system is in place?”
Most people have heard of Key Performance Indicators (KPIs). Defining these key items will help harness the power of systems data. How does a company go about defining KPIs for a system and the business?
First determine what type of data the system produces (financial, estimating, operations, etc):
- Determine which business units gain the most value from the systems and data (scheduling systems provide operations data as well as forecasting data for accounting.)
- Each business unit that gains value from the system must determine the KPIs (estimating systems provide a percentage of bids won. The question becomes what percentage of jobs a company bid did it win? On the jobs the company did not get, how far off were they from the winning bid? What percentage above cost was the winning bid over the cost of the company?)
- After the KPIs for each business units are defined, the next step is to determine how to source the data from the system.
- At the same time, have each business unit draft how they would like a dashboard or report to look with their KPIs.
- Determine if the proper reporting tools are in place to provide the feedback needed to the business units. If not, find an effective reporting tool.
- Determine if the proper business processes are in place to capture and process the data in a timely manner. If not, revisit the business process and make the changes needed.
- Once the reporting tool is in place and there is efficient flow of data, it is time to develop the reporting. Look at internal human capital and skill sets. Determine if the work will be done in-house or outsourced.
- Once developed, launch the dashboards and put a feedback loop in place to watch for issues or missing items. Over time as the dashboard evolves, circle back and look for ways to improve the dashboard.
The task of defining and developing business impacting KPIs can be daunting and take time. Once the information is in place, the business impact and ability to adapt and make decisions will become a competitive advantage.
The first version of the dashboard will not be the last. Go after the key variables first and focus on one system. Over time the information and value will grow. This process continues for the life of the business. Companies should continue to evolve and change their dashboards to meet changing needs over time.