Improve the management of construction variations
It’s no secret that construction variations often cause delays and conflicts in the industry, quickly turning what could have been a relatively simple project into one with unmanageable complications. So how do you manage variations more effectively and efficiently?
In a recent webinar hosted by Payapps, a panel of industry experts – Iain McIlwee (CEO, FIS), Bill Bordill (Quantum Expert, Decipher) and Kevin P’ng (Commercial Director, BW Interiors) – discussed discussed the impact of variations within the built environment. The panel debated whether variation is one of the most serious risks facing the success of construction projects.
The impact of construction variations
Speaking first, Iain McIlwee explained why risk in construction falls into four main categories: design, quality, time and price. Variations can be achieved in any of these four areas, so this is an urgent concern.
But what is a variant? Bill Bordill described variations as “any change in price, quality, or time allowed to perform the work of the contract”, and listed common variations as:
- Instructions from Contract Administrator, Architect or Engineer.
- Drawing changes.
- Changes in site or labor management methods and procedures announced by the employer.
- An instruction to spend provisional sums.
- Changes in legal requirements or regulations.
- Discrepancy in or between the contractual documents.
During the webinar, a live poll of the audience revealed that “the time it takes to administer” the variations was a major challenge for 32%. A staggering 45% said the main problem caused by variations is inaccuracy, and therefore a subsequent lack of information.
How much do variants cost?
As Bill Bordill has pointed out, variations are often due to planning or drawing changes, or following vague instructions from contract administrators. Variations are sometimes unavoidable due to existing supply chain issues or material or labor challenges. As such, it creates an extremely difficult business environment for construction companies.
That said, some common causes of variations can be avoided. Kevin P’ng noted that customers and end users can each play their part in minimizing variation: “More and more end users are rushing into the market and want to get started to progress. However, if we give ourselves more time to absorb and ratify the changes or variations, it can help lessen the volume of the variations and their impact.
Construction projects can only get off the ground if all parties work together to achieve a common goal. However, variations, when they occur, can still cause delays in projects and are undoubtedly a key factor behind the many projects not being completed on time.
Ian McIlwee spoke about the industry as a whole saying, “I think we’re still very lost and wrapped up in this late payment issue, and I think late payments, fair payments and variations are all linked.”
But how often do variations cause late payments? Some 64% of survey respondents in the webinar audience said variations cause late payments “very often” or “often”.
Manage and mitigate the impact of construction variations
Storing information across multiple spreadsheets is a traditional way of working when it comes to managing variation, despite the risk of miscommunications and delays.
When the webinar audience was asked about their variations management, only 10% said they use software such as Payapps, even though these solutions are designed to standardize and automate the variations process.
Kevin P’ng – BW turned to Payapps while Kevin was Chief Commercial Officer to help digitize the payment processing app and improve variation management.
Kevin explained that it was necessary for BW to move away from “Excel’s security blanket”.
“Simply put, Payapps has allowed us to communicate more effectively with our supply chain. Not only is Payapps simple to use and monitor, but the huge benefit has been the visibility it has given us,” he said.
“At any time, management can dive into projects and see important information very quickly, or we can see there’s a red flag. In the past, this was blocked in emails or Excel documents.
How can technology help manage construction variations?
A significant portion of the webinar discussion focused on visibility, transparency, and collaboration as fundamental tools in the fight against variation. Across the industry, there are already signs of positive change and transformation – but can technology accelerate this?
The webinar panel members were all in favor of the technology, with Iain McIlwee sharing his experience: “Everyone has different systems and processes. If we could bring more consistency to the industry, that would help – technology is a key driver to achieve this.
The industry, however, is still working towards acceptance of the technology and Kevin P’ng shared the following insight: “The basis of building is people and their relationships. Perhaps that’s why we refrain from embracing technology wholeheartedly. But building has to look outside our bubble and see how others have done it and steal ideas about how we can work better and more efficiently.
Yet, when the webinar audience was asked if they thought technology had a role to play in improving variation management, the responses were (almost) unanimous: 99% answered “Yes”.
Thus, traditional methods are questioned by avant-garde people in order to increase the chances of success of the project. Those who want to reduce the risk of delays and disputes are turning to cost-effective solutions to manage difficult construction processes; processes such as managing variants and payment requests.
To learn more about the expert panel, watch the full recording of the Managing Construction Variations webinar.
Marketing Manager, UK
Tel: 0191 651 1765
*Please note: This is a commercial profile