Project Management in Construction: Challenges, Solutions

Construction projects are huge undertakings: Massive amounts of time, money, and manpower are pressed into bringing each project to fruition. Even when everything goes according to plan, large construction projects can take several years to complete. Construction projects have critical dependencies on man and material supply chains, and even seemingly minor disruptions can quickly snowball into cost escalations and missed deadlines. This in turn negatively impacts sales and revenue targets for construction companies. 

On any construction project, project managers need to tackle and overcome a wide array of challenges daily. That’s why it is important to understand the potential challenges you could run into while managing a construction project. When you have visibility into the kind of challenges you might be up against, you can be better prepared to face them. Better yet, you can circumvent or pre-empt challenges before they hamper your project’s progress!

Here are the major challenges that construction project managers typically face:

  1. Poor communication
  2. Poor collaboration
  3. Lack of visibility
  4. Budget overruns
  5. Safety hazards
  6. Inaccurate reporting
  7. Relying on legacy systems and processes

1. Poor communication

Construction projects have a lot of moving parts. Several teams and stakeholders need to be aligned from start to finish. Poor communication between teams on such massive projects can lead to errors and require rework. This leads to an escalation of project costs and delays the project delivery.

Around 57% or almost 2/3rds of all projects fail due to poor communication and lack of transparency between the project teams. On a construction project, work is distributed and delegated amongst multiple teams. Therefore it is essential to establish a clear chain of communication and coordination between the key stakeholders - the architect, the engineers, the main contractor, and subcontractors.

For example, let’s say the architect has made changes to the design. This is a critical update that needs to be communicated to the structural engineers and the contractor on time. If the construction continues to follow the old design, the project is at risk of a major rework. This will not only be an added expense but can cause significant delays to the entire project.

Solution: To avoid lapses in communication, project managers should replace manual or paper-based documentation workflows with a digital collaboration platform. This ensures that project updates are delivered to all teams in real-time, and no mission-critical information slips through the cracks!

Benefits: Clear communication ensures that all project teams are aware of the project's progress and current status. When teams are up to date with the latest decisions and information, you can avoid erroneous construction. Clear communication between project teams eliminates the need for expensive rework, prevents unnecessary cost escalations, and makes sure that projects are delivered on time.

2. Poor Collaboration

For a construction project to be successful, the architect, engineers, contractors, sub-contractors, and suppliers need to collaborate from start to finish. 

But when different teams operate in silos, they remain disconnected from other stakeholders on the project. As a result, teams struggle to share information, and lack visibility into progress or status of shared responsibilities, leading to disjointed efforts.

Collaboration becomes harder when teams and stakeholders are dispersed across geographies and work in different time zones. In such situations, there could be significant delays in sharing information. When teams use outdated communication tools or manual methods of conveying information between the project office and the construction site, collaboration becomes much more difficult.

A lack of collaboration could mean teams stay in the dark about the status of the project, progress achieved, and blockers (if any). This can result in redundant work and costly rework, which escalates the costs of an ongoing project and causes significant delays in project delivery. This hurts the bottom line of the construction company.

Solution: The project manager should define clear guidelines to ensure smooth coordination between teams. For example, a daily status update on progress and obstacles is shared with everyone on the project at the end of each day. This can significantly boost visibility and smoothen out most coordination roadblocks. Cloud-based project and document management solutions can effectively address coordination challenges between teams, even on large projects.

Benefits: When all stakeholders are in sync with the latest progress achieved across the project, teams can execute their tasks without resulting in redundancies. This avoids wasteful expenditure on labor and materials, making sure the project stays within budget.


3. Lack of visibility

For project managers to make informed decisions and drive the project to successful completion, they need accurate visibility into project progress and performance.

However, practices that are commonplace in the construction industry can severely restrict a project manager’s access to such data. This can have adverse effects on the project:

  • Teams working on the same project tend to use disparate systems to track and log their progress. Project information gets fragmented into multiple siloes, and makes it difficult for the project manager to see the ‘big picture’.

  • Decision-making becomes reactive. It takes time and effort to stitch together data from multiple systems, making it harder to identify and pre-empt issues at an early stage. This could force the project manager into ‘firefighting mode’ at a later stage.

  • Without real-time project performance data, it is difficult to evaluate the performance of contractors and sub-contractors. The project manager will find it harder to identify and renew engagements with high-performing contractors.

  • Lack of real-time data also creates blind spots in material inventory, manpower, and other resources. Without visibility into resource availability and utilization, project managers may find it difficult to allocate resources optimally.

Solution: Construction companies should implement a project management tool and onboard all teams, contractors, and sub-contractors. This will enhance visibility into the project status for all stakeholders involved.

Benefits: By setting up automated reports on project performance metrics and creating dashboards, project managers can access real-time project data and make informed decisions with ease.

4. Budget overruns

Budget overruns are a prevalent issue in the construction industry. As per a KPMG report, 69% of all construction projects launched between 2020-2023 failed to complete within 10% of their budget. Nearly a third of all construction projects fail because they overrun their initial cost estimates. 

A combination of factors can cause your project costs to escalate: Changes in the project design, unfavorable working conditions at the construction site (eg. bad weather), poor material quality, rise in material costs, shortage of skilled labor, et al. resulting in unforeseen expenses. 

When projects overshoot their timelines, construction companies have to foot the bill for the added running costs: labor wages, payments to subcontractors, and additional rental costs for construction machinery,  invariably result in budget overruns.

Solution: Budget overruns could also be the result of inaccurate cost estimates. It is important to be meticulous when drawing up the budget estimates and make reasonable provisions for additional expenses.

Benefits: In the worst-case scenario, unforeseen escalations in costs can bring the project to a grinding halt. An accurate, well-planned budget with provisions for cost escalations can ensure sufficient availability of working capital to see the project through to completion.

5. Inaccurate reporting

Traditional industries like construction are slow to adopt technology and rely on manual methods of collecting and analyzing data to create reports. That’s how human error creeps in, and results in inaccurate data reports. Inaccurate reports lead to misinformed decisions, which result in projects missing deadlines and overshooting their cost estimates.

What are the causes of inaccurate reports?

  • Manual data entry is prone to errors, leading to inaccurate and inconsistent information
  • Lack of standardization in reporting formats can lead to inconsistent make it difficult to consolidate, compare, and analyze data
  • Data gathered from multiple disparate sources tends to have inconsistencies and leads to inaccurate reporting

Solution: To inform project decisions with accurate data, construction firms should prioritize investing in a digital project tracking solution that automates data collection, analysis, and reporting.

Benefits: Reports provide visibility into project and business status and provide insights on improving processes in the future. Data and reports drive decision-making, which determines the success or failure of a construction project.

6. Relying on legacy systems and processes

While good project management software can boost your efficiency, relying on legacy software and processes can become a burden that slows down your project. And yet, construction companies resist adopting new technology. Most companies continue to rely on spreadsheets or other legacy software.

Solution: Construction projects need solutions that provide advanced analytics and automation. To overcome the resistance to adopting new technologies, construction companies should provide sufficient training and support. This will help teams transition from legacy systems to modern project management platforms.

Benefits: Modern project management software that is purpose-built for the construction industry has several functionalities that simplify project management: Automated worker assignments, workload balancing and management, Gantt charts, and more.

7. Safety hazards

Construction sites present significant safety challenges. Workers can be at serious risk of accidents and injuries. Construction companies need to follow stringent safety protocols to ensure the safety of their workers. 

Although safety is a top priority on construction projects, construction companies regularly run into safety challenges such as: 

  • Hazardous working conditions: Construction sites are inherently dangerous. Most construction work involves high-risk activities: operating heavy machinery, working in unsafe environments such as high altitudes or low-lying areas, exposure to extreme conditions such as extreme heat or risk of flooding, etc.

  • Lack of safety training: Workers need adequate training on using construction equipment safely, identifying potential safety hazards, following safety procedures at all times, etc. Insufficient safety training can leave workers vulnerable to injuries at the construction site.

  • Poor safety culture: Complacency in enforcing safety protocols such as wearing protective gear, ensuring availability of fall protection, etc. increases the risk of accidents. Construction companies need to put in place strict supervision to make sure there are no compromises in adhering to safety protocols.

Solution: Accidents and injuries to workers can be avoided by strictly enforcing safety protocols. Construction firms should regularly conduct safety protocol training for their on-site workers. 

Benefits: Higher awareness about safety hazards significantly lowers the risk of mishaps at the construction site.

In conclusion

Project managers face a wide range of challenges on construction projects. These challenges can be addressed through a combination of strategies and the right project management tools. 

By leveraging modern project management software that is purpose-built for the construction industry, project managers can improve visibility, enhance collaboration, ensure safety, and maintain control over budgets and schedules.

June 14, 2024

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