Project Information Management Systems (PIMS) Are Increasing Contract Awards
There is a vast amount of information available on the competitive advantages derived from leveraging the power of a modern project information management system (PIMS). Those who have embraced emerging technologies and learned to treat project data as a precious commodity are finding ways to transform their processes and separate themselves from an increasingly saturated market. And yet, after engaging several clients and industry veterans, there was one correlation that stood out the most. Those contractors who had successfully implemented a PIMS were also experiencing a profound increase in contract awards.
So, what were they attributing this to?
Reducing Estimate Uncertainty
Since the ‘great recession’, a sharp rise in the number of contractors has resulted in an increasingly competitive bidding environment. Owner’s and lenders have undoubtedly leveraged this competitive market to drive contractors into taking on a greater amount of risk while squeezing their margin profiles. This has placed significant pressure on organizations to better define and quantify execution risks, improve control over estimate accuracy and eliminate “compound contingency” in estimates to remain competitive.
So how does a PIMS play a role? By leveraging a wealth of historical and active project data, organizations can use simple business intelligence functionality to quickly find projects of a similar nature and assess the actual incurred labor rates, equipment costs, install rates, change order growth, material prices and a host of key performance indicators to produce more accurate estimates. The information available also allows for quick identification of potential scope gaps. This ultimately leads to an improved bid/no-bid process and greater control over estimate uncertainty.
Showcasing Project Control Capabilities & Reputation
Reputation and past project success plays a vital role in the contract award process. When estimates are comparably close, contractor selection will likely be determined by assessing which contractor is most likely to deliver the project on time and on budget. Now there are never guarantees, but if you maintain a reputation of doing precisely that, your odds of being awarded the contract are dramatically increased.
That was the obvious part. What might not be so obvious based on the feedback we received was how many awards were based on contractors confidently demonstrating their project control mechanisms. By showcasing the functionality of a top quality PIMS such as generating world class reports on the fly, monitoring early warning indicators in real time, and easy analysis of early warning indicators, clients gain insight into the proactive project management techniques that allow for critical timely decision making.
Increasing Client Engagement
A new trend has emerged in the industry, the birth of the “one team” mentality. Clients want to be involved in project execution more than ever before (within reason). The demand for real time key performance indicators, improved report quality and more direct access to project information is growing. A modern PIMS provides for all of this while allowing for complete control over the information that clients can access. Demonstrating to clients the willingness to allow them to directly access valuable project information in real time (again, within reason) helps to satisfy the growing demand for improved communication and establishes a tone of confidence in the ability to deliver.
One message that was clear through discussions with various organizational leaders is that a powerful PIMS serves a much greater purpose than simply tracking progress and generating project reports. If effectively embraced, an investment in a best-in-class PIMS can act as the difference maker in a highly-saturated market where differentiating oneself is difficult. After a number of conversations with leading contractors, it was evident that modern PIMS are providing a platform to increase project awards.