The High Cost of Poor Document Management In Construction

When we think of the big issues in construction, we talk about project delays, lack of communication, and payment delays. One overlooked problem, which silently causes most of these issues, is poor document management. Let's take a look at how companies get affected by this.

Picture this: on a typical day at the jobsite, bustling with activity, a critical update is made to the electrical plans to address a safety issue. However, due to poor document management practices in the company, this vital update is filed under the wrong project folder and hence overlooked. The electrical team, operating under now-outdated plans, inadvertently installed wiring that later failed safety inspections, leading to costly and time-consuming rework. This scenario showcases the consequences of poor document management in construction, highlighting the importance of having the latest project information.

Such mistakes are commonplace in construction, causing the industry millions of dollars every year in lost time and rework.  

In an incredible stat, 25% of all misplaced documents are never found again!

The integrity of any construction project lies in the accuracy of plans and efficiency of execution, both of which require proper document management. Yet, the construction industry is grappling with exactly that problem, which has proven to be a silent killer of construction projects.

Pitfalls of Poor Document Management

Communication Breakdown and Misinformation:

When documents are not managed well, chaos arises. Outdated versions of plans may be circulated, leading to discrepancies between teams. Incomplete or missing documents can impact decision-making and slow down progress. These breakdowns in communication can result in costly mistakes, budget overruns, and delays, undermining the company's reputation and profitability.

Dangers of Inaccurate As-Built Drawings:

As-Built drawings serve as the definitive record of the project as constructed and completed, documenting deviations from the original design. They are essential for future maintenance, renovations, and even legal matters. Misplacing these documents or having them inaccurately updated can cause major issues right from misled maintenance work, inaccurate repairs, all the way to uncertainty in future renovation work.

Legal and Compliance Risks:

While misinformation in the form of drawings can cause temporary delays, projects can get scrapped whole in the case of missing documents during compliance and audit checks. Misplaced contracts, outdated insurance certificates, or missing inspection reports can lead to severe consequences, such as financial penalties, litigation, and damaged client relationships. Ensuring proper document organization and retrieval systems can mitigate these risks and protect the company's interests.

Impact on Collaboration and Teamwork:

Delayed access to critical information, inability to track changes, or difficulty sharing documents can impede teamwork and cooperation. The resulting disarray can strain relationships with architects, engineers, subcontractors, suppliers, and clients alike, jeopardizing future business opportunities.

Effect on Client Relations:

Ultimately, if projects continually experience delays, errors, or quality issues due to inadequate documentation, clients lose confidence in the company's abilities. To maintain a positive reputation and secure future projects, it is crucial to prioritize efficient document management.

Improving Document Management Practices

Adopting Suitable Document Management Software

Digital platforms and cloud-based systems provide centralized access to documents, facilitating real-time collaboration and version control. By embracing these document management tools, construction companies can significantly improve efficiency, reduce errors, and enhance project transparency.

Implementing Best Practices and Continuous Learning

Ideally, a software is complemented by implementing standard best practices to be followed across the organization. Establishing clear protocols for document creation, storage, naming conventions, and version controls ensures consistency and enables quick retrieval of documents. By prioritizing regular training on document management tools and processes, companies can steer their team towards better file organization and accountability, minimizing the risk of errors and delays.

Good Document Management Leads to Great Outcomes

In any construction project, document management touches every aspect of its operation. It is now becoming imperative for companies to adopt cloud-based software to enable better communication, accuracy, and accountability when it comes to a project’s documents.  

In our next article, we will take a closer look at a typical document management system and explore how companies could benefit from using it. We’ll also look at some of the best practices needed to complement the use of such systems.

February 27, 2024