female construction manager wearing a heard hat and holding a clipboard pointing to a building under construction
Operational Excellence

Construction Project Management: The Ultimate Guide

Written By: Joe Demski
February 8, 2022
20 min read

Construction projects don't just happen. A successful project requires careful orchestration between design and construction, your project team and outside project stakeholders, employees in the office and on the job site, and more. An entire project can be sunk by exceeding project costs, the inability to keep track of project progress, and poor communication between managers and construction crews. Before a construction project begins, construction project management processes are critical to guiding any build through the construction project life cycle.

Construction project management informs each step in construction projects starting before actual construction begins through quality control and post-project review. To ensure that your project progresses on-time and within the defined project budget, a thorough understanding of project management is required.

By starting with learning about these processes, construction project management software and tools, and tips for construction management, you lay the foundation for ensuring your construction process leaves project owners delighted and creates a happy and productive workforce throughout the project life cycle.

What is Construction Project Management?

Construction project management is the process of coordinating materials, people, and equipment for the purpose of completing a construction project. Effective project management addresses many important concerns, including cost estimates and control, construction scheduling, procurement, and risk assessment. Project managers interact with all team members involved in a construction project, from architects to owners to contractors.

Construction project management involves a variety of stakeholders. The project manager may need to coordinate with clients, architects, contractors, realtors, attorneys, city planners, and zoning officials–and that’s just for simple builds.

Construction project management also requires a firm understanding of supply chain logistics, as well as superb foresight. The best construction project managers know how long each phase of the project should reasonably take–and the good judgment to create timelines that allow for inevitable delays.

While construction project managers don’t necessarily have to be contractors themselves, it certainly helps if they have industry knowledge. This is especially true for builds in the following markets:

  • Transportation

  • Petroleum

  • Power

  • Industrial

  • Water

  • Manufacturing

  • Sewer/waste

  • Telecom

  • Hazardous waste

These markets tend to be highly technical and come with stricter regulations and oversight. If you’re planning a build in one of these fields, you must choose the construction project management method that best fits your project.

What are the Most Common Construction Project Management Methodologies?

Construction project management methodologies are frameworks you can use to guide your project. Each one is slightly different from the rest, but you’ll notice similarities between them. Don’t feel limited to just one, either. You can combine methodologies to create hybrid systems that work for you.

Traditional project management

Adopters of traditional project management, also known as waterfall project management, map out what has to be completed first, second, third, and so on and then create a timeline for each step. The traditional approach is an ideal technique for sequential projects. For building projects, this means that project managers begin with laying out the steps in planning phase and design phase before doing so for the construction phase.

This is one of the more widely used methods because of its simplicity. You’ve likely heard contractors and clients alike complain about its major drawback, though: if one step takes longer than anticipated, the entire build is put on hold.

Lean construction management

Lean construction management is a focus on creating efficient systems and maintaining a continuous workflow. Lean construction planning prioritizes a constant stream of work so that a project team is always completing tasks on the job site, minimizing the inventory of materials and tools, and reducing costs wherever possible.

For that reason, this method requires frequent communication. All team members involved must be on the same page. They also have to put in maximum effort. If even one person isn’t kept in the loop or isn’t pulling their weight, the whole project will be affected.

Agile project management

Agile project management is essentially a more flexible version of traditional construction project management.

An agile workflow can move more quickly than other methods. It also allows certain phases of construction to continue, even if others get held up. For example, if the sink your client wants is on backorder but the appliances are ready to ship, you can rearrange your project steps to focus on the appliance install first.

Similar to the lean construction method, agile project management can be a huge time-saver, but it requires airtight communication, close to real time insight, and quick thinking.

Critical path method and critical chain

Technically, these are two different methods, but they’re closely related.

The critical path method focuses on how quickly a project can be completed–and accounts for delays that can cause a late finish. To put it simply, it prioritizes construction scheduling and the steps towards completion.

The critical chain method, on the other hand, considers the availability of resources. Once you’ve determined your critical path, you can adjust your timeline to account for potential supply chain issues.

Construction Project Management Software

Regardless of your construction project management methodology of choice, you’ll need the right tools to see your project through. And while they are essential, this doesn't mean hammers and nails. Construction management software makes all steps from planning through the construction phase more fluid, simpler, and smarter.

Construction project management software programs may have very specific focuses, like construction scheduling software or project monitoring benchmarks, but the best programs are able to provide a central location for project execution management and key data. Today, low-code software is particularly useful in equipping construction professionals with the ability to build their own management solution. Construction management software should handle:

  • Resource management

  • Cloud accessibility and document management

  • Payroll and contract management

Beyond these functions, a top-notch construction project management software will serve as a singular source for critical project documents and data like:

  • Work breakdown structure

  • Gantt charts

  • Project charter and project initiation document

  • Building codes

  • Risk management plan

  • Key performance indicators

Finally, construction project management software needs to be flexible and accessible to construction managers whether they are in the office, on the construction site, or anywhere else. Effective construction management software needs a few technical capabilities as well including:

  • Mobile app capability

  • Collaborative dashboards

  • Real time updates

Construction Project Delivery Methods

Beyond planning and project management methodologies and software, determining how your project team will actually complete the build is a crucial consideration. In other words, how will you coordinate actions between the project owner, the lead contractor, and the design team?

Typically, construction project management delivery uses one of five methods: design-bid-build, design-build, design-negotiate-bid, construction manager-at-risk, or construction manager-agent. Selecting the delivery method that is best for you varies based on your project and comes with pros and cons.

Design-bid-build

With the design-bid-build, the project owner first hires a designer and architect or engineer to design the new building. The owner and design team work together to finalize designs, then open the project for bids. Contractors are then sourced to work on the build based on submitted bids.

This method is lauded for reducing costs and ensuring fairness among bidding contractors. This is also the method most often utilized for public projects. However, there are drawbacks to design-bid-build. The quality of work can be adversely affected by selecting contractors offering the lowest costs. This method also does not allow for collaboration between the design team members and contractors before a project begins.

Design-build

The design-build model demands collaboration between architects and contractors. Under this system, a single entity handles both the design and the build. Designers and builders form a team to submit bids and complete the work in its entirety.

The design-build method is a very efficient method for completing construction projects. It is also very common with small, residential projects. The most significant benefit of this method is the accelerated project completion time. However, this also represents some risk to project owners. With only one entity working on the building process with complete autonomy, it is even more critical that a reliable and quality company is selected from the start.

Design-negotiate-build

The design-negotiate-build method blends the collaborative building relationship of the design-build method with the contractual aspects of the design-bid-build method. However, the design-negotiate-build makes the contract process more efficient by removing the need for a public bidding process. Instead, project owners select and separately contract their own architect and builders privately. This method then requires collaboration between these teams.

The biggest benefit to utilizing a design-negotiate-build process is the efficiency of getting projects from planning and design through the project execution phase without the reliance on a single entity. This method is widely used for private projects. The most significant drawback is the loss of competition in the bidding process. Eliminating public bidding saves time, but it does not guarantee a project owner will always receive the best possible price for the build.

Construction manager-at-risk

The construction manager-at-risk method shares many similarities with the design-bid-build process but relies heavily on a construction project manager to oversee all aspects of a project outside of architectural work. The hallmark of the construction manager-at-risk method is the cost estimate developed by the construction manager during the design phase known as the guaranteed maximum price. As the name suggests, a guaranteed maximum price is a cost ceiling that the project will not exceed. Should the total cost of a project exceeds that threshold, the construction manager's company is then responsible for making up the cost difference, hence putting them "at-risk."

There are numerous benefits for both owners and project managers when adopting a construction manager-at-risk method. Project owners are able to keep themselves removed from the construction process, lean on an industry expert to see projects through execution, and protect themselves from exceeding a project budget. Construction managers benefit by allowing construction work to begin earlier than other methods, maintaining greater project management control, and facilitating subcontractor efficiency. Often, this method also results in bonuses for construction managers who are able to complete projects under budget. Potential costs are the most significant risk for both parties.

For owners, a lack of negotiating or bidding on their own behalf doesn't ensure they receive the best price for all aspects of project work. For managers, they assume a great deal of financial risk should projects incur unexpected costs due to poor planning or change orders.

Construction manager-agent

In the construction manager-agent method, the role of construction management is treated like any other contracted aspect on a job site. The project owner operates as the responsible party for the entire project. Owners handle hiring the architect, contracting all project teams, and setting a budget. In this system, a construction manager is contracted to serve as a project manager for the work, however all decision-making power rests on the owner.

This process benefits managers by allowing them to make recommendations on project work without assuming any of the financial risk associated with the construction manager-at-risk method. However, the lack of decision-making or budgetary power can be a hindrance to project progress. For owners, the construction manager-agent process provides them with the ultimate oversight over the delivery of their project. This also means they assume all risk should a project go over budget or exceed the timeline.

5 Stages of Construction Projects

As a project moves along, there are 5 distinct stages in which the construction management process shifts and needs evolve. The stages are as follows.

1. Planning and development

Before getting invested in a project, a construction manager needs to make sure it's feasible. In the planning stage, you’ll do extensive preliminary research to decide if you want to proceed.

Ask yourself the following:

  • What’s the expected ROI?

  • What are the risks, and are they manageable?

  • Is this project a good fit for my company?

Collecting data and performing research is critical at this stage. A thorough planning and development stage generally includes running feasibility studies, risk assessments, and capital budgeting models.

The positive findings and any concerns which arise from these planning exercises need to be communicated to primary stakeholders promptly. A combination of hard data and human insight will inform you how a project should move forward.

2. Design

If the project passes the planning stage, you can press on to the design phase. At this point, stakeholders will create increasingly precise renderings of the final build.

This stage usually starts with simple conversations and rough sketches. As your team gets clearer on the project vision, these sketches should develop into full-on blueprints.

This stage can be time-consuming. However, it is critical to the success of a project, as all parties need to be in agreement about the design specs. Otherwise, your project will run into snags down the road. Once the design is finalized and approved, you’ll have what you need for the preconstruction phase.

3. Preconstruction

In the preconstruction stage, you’ll develop a course of action to see the project through to completion. This is the point where your construction project management skills start to shine.

This step is more involved than simply creating a schedule, however. Processes you will need to complete in this stage include:

  • Determining who needs to be involved and what they’ll do.

  • Configuring your work breakdown structures (WBS) and organizational breakdown structures (OBS).

  • Figuring out what resources and permits your team needs.

  • Calculating an overall budget, as well as smaller budgets for each project phase.

  • Developing a timeline, and setting project milestones.

This can also be a time-intensive stage. There are a lot of moving parts to consider, so you need to take a Murphy’s Law approach. Anticipate the worst-case scenario for each step of the build–then create contingency plans so you and your team are prepared.

4. Procurement

Once you’ve determined your project workflow, it’s time to source supplies. The goal in procurement stage is to get what you need as quickly and as economically as possible.

This stage is made much easier and more efficient if you have an established network of suppliers and a firm grasp of supply chain logistics. If not, consult with a member of your team for advice or bring in a procurement specialist.

Another consideration is whether you want to acquire all of your supplies at once or spread out the procurement stage.

Piggybacking on our earlier example, it may not make sense to purchase lumber, flooring, and appliances at the same time. Instead, you might get the lumber first, then acquire other supplies as they’re needed. If you go this route, be careful with timing. You don’t want to wait too long to order materials and hold up the next steps in a project.

5. Construction

Finally, your project can come to life. By now, your team should be fully prepped on what they need to do, how they should do it, and when. You should also have supplies for at least the first couple of construction phases.

Your job as construction project manager isn’t over just yet, however.

While the hardest part is over, you’ll still need to oversee the project to keep everyone on track. Curveballs are inevitable, so be prepared to adapt your plan as needed. With careful monitoring, you can preempt possible hiccups and adjust your workflow to stay on track and under budget.

The 4 Steps of the Construction Project Life Cycle

Construction builds follow a few specific stages as projects move from concept to completion. The construction project life cycle steps are sometimes referred to by different names, but the specific processes that occur and considerations you need to adhere to are the same. The four steps are generally as follows.

1. Ideation phase

During ideation, you and your stakeholders will determine how to make the project worth your time. Within the ideation process, a great deal of research goes into the feasibility, risks, and ROI of the project.

Here, you’ll anticipate possible challenges and their solutions. If you can’t see a reasonable way forward or if the obstacles outweigh the benefits, rework or ditch the project. You don’t want to commit yourself or your company to a failing project.

To make your decision, go beyond consider the following:

  • How would this project affect my company’s reputation?

  • Does my company have time for this whole project?

  • Do we want to work with this client, or does the client present a challenge in and of themselves?

2. Planning phase

If you’ve decided that the project is worth taking on, you can start the planning process.

Start by determining what construction project management methodology makes the most sense. Then, fill in the blanks using that framework.

During this stage, you’ll flesh out details like who needs to be involved and what their specific responsibilities will be. You also need to clearly define your role.

As you plan the project, be sure to consider reasonable expectations. This stage allows for a great deal of creative problem-solving. You should also plan for contingencies in case of emergency.

Like your project as a whole, think about what could go wrong if these kinds of contingencies aren’t spelled out. Then, iron out your duties just as you would for your other team members.

3. Execution phase

After you’ve crafted a detailed plan and anticipated enough worst-case scenarios to last a lifetime, the project itself can begin.

Throughout the execution phase, you should routinely check in with your stakeholders. Do they have any concerns? Do they need anything from you?

Additionally, you’ll want to visit the build site. Putting boots on the ground is the surest way to know that everything is coming together as it should. If the location is inaccessible or too far away, have one of your stakeholders video chat you from the build site.

Be proactive here. Don’t wait for problems to arise. Get ahead of any potential issues, and let your actions show your stakeholders that you’re just as invested as they are.

4. Closing phase

Now that the build is complete, you can walk away and start your next project, right? Wrong. Once you wrap construction, your final step is to evaluate the process as a whole.

This is a prime opportunity to go back over your early data collection and targets. See if your initial analyses hit the mark, and check to see where you could’ve saved time and money.

Just like with the other project processes, you’ll want to gather feedback from everyone involved. Ask them quite plainly what they thought worked well and what they didn’t.

Check in with your client, too. You’ll either get constructive criticism (pun very much intended) or the chance to ask for referrals and a five-star review.

Tips for Succeeding in Construction Project Management

Tip 1: Communicate, communicate, communicate

You really can’t overdo it when it comes to communication. As the project manager, you’re often the middle man between multiple collaborators. It’s your job to make sure the information they give you gets passed on to everyone else.

A good rule of thumb is to assume that no one else on your project knows what you know.

This doesn’t mean you should be condescending, but rather that you should be as thorough as possible. You don’t need to recite a dissertation, but you should never leave out relevant details.

Another smart strategy is to use the communication methods that are most successful with each party.

Do your contractors answer the phone on the first ring but never check their emails? Call them. Does your client always send you to voicemail but reply to emails within the hour? Email them.

Keep records of what you’ve shared and with whom, and don’t be afraid to ask for confirmation. Close with a simple, “Let me know you’ve received this,” or, “Let me know if I can clarify anything.” This ensures that you’re being heard and opens the door to resolve miscommunications right away.

Tip 2: Include your stakeholders–especially when plans change

If communication is key, then input is the doorknob.

It’s one thing to share information with your stakeholders, but including them as much as possible is an absolute game-changer.

As the project manager, you have a great deal of influence over how the build comes together. You’re not acting alone, though. The people on your team, regardless of their roles, will trust you more and be more cooperative if you make a point to involve them where appropriate.

This is particularly true during the design and execution phases, where most of the decision making takes place. You’ll also want to gather input when the project plan needs adjusting.

Instead of making those calls solo, ask your team what they think is best. Even if you ultimately decide against their judgment, you will have demonstrated that their opinions are important and that the final directive was an informed one.

Tip 3: Read the fine print…twice

This might go without saying, but going over contracts with a fine-tooth comb is a must.

Construction projects–even straightforward residential builds–can involve a great deal of legalese. You could easily agree to less-than-favorable terms if you’re not careful. Not only would this impact you, but it could also negatively affect your company, your stakeholders, and the project itself.

Get everything in writing, and don’t indicate agreement (verbally or otherwise) until your attorneys have had a chance to read through the terms. Be prepared to negotiate, and be willing to set firm boundaries if there are terms you simply can’t accept.

You should also consider including exit clauses in the contracts you sign.

Let’s say you hire a plumbing company that turns out to be completely unreliable. Their phase of the project should’ve been finished a week ago, and they haven’t even started. With an exit clause, you may be able to terminate their contract and find a more trustworthy business. Without an exit clause, you’re stuck.

FAQs

What type of project management is used in the construction industry?

Regardless of the project scope, construction project management usually employs one of the following methodologies:

  • Traditional project management

  • Lean construction management

  • Agile project management

  • Critical path and critical chain methods

Project management in the construction industry covers a variety of submarkets: residential and commercial builds, transportation, petroleum, power, industrial, water, manufacturing, sewer/waste, telecom, and hazardous waste.

What are the steps to managing a construction project?

From start to finish, the steps to managing a construction project are:

  1. Ideation and development

  2. Planning and design

  3. Preconstruction

  4. Procurement

  5. Construction and execution

  6. Closing

What makes a successful construction project?

Successful construction projects are those that meet quality standards and fulfill the client’s wishes. They’re also within the allocated budget and completed on time.

Written By: Joe Demski
Tags:
Process Improvement
Construction
project management

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