At the Construction Lenders Risk Management (CLRM) roundtable recently held in California, one topic of discussion was technology and how it is being used in the construction industry. The construction industry is starting to embrace technology in order to ensure that their projects stay on schedule, on budget, and more transparent to all stakeholders. Developers are increasingly adding a variety of smart technologies, such as drones for survey and data collection as well as BIM, GPS and sensor capabilities, to traditional tools to make the design and development process more efficient. But, lenders are much more interested in new technology platforms and software.
Be Realistic About Risk
Projects rarely run smoothly without adjustment, so construction risk management is the name of the game. Lenders are willing to pay for tools that will keep a project moving. There is value in spending additional money up front to prevent extensive costs during the project. It’s a classic case of not being ‘penny wise, pound foolish’ and an educated borrower will see the benefits of the additional spend up front. With this philosophy in mind, lenders are increasingly relying on sophisticated project management platforms to better manage these risks utilizing these databases. These platforms can collect data and deliver reports-whether during the construction of your project or managing a portfolio of projects simultaneously.
The Proof is in the Platform
Construction projects are a series of moving parts and, as all project managers are aware, managing so many line items can be daunting, with many opportunities for something to fall through the cracks. One seemingly small miss can suddenly throw a project off track-compromising the schedule, increasing cost, and derailing the overall success of a project. Lenders need to be able to see all of these elements in real time to avoid the risk associated with any project.
An online, multi-user database could be just the answer to managing risk. Lenders now have the information for any and all properties at their fingertips at any point in the project. Being able to see how tasks are progressing, how resources are being allocated, and how the budget is being managed is essential to keeping potential risk factors under control. One such product, SiteLynx, is able to provide 360 degree project visibility. This report delivery and project database tool is designed with risk management in mind. Project tracking capabilities include construction progress management tools such as work completion status, contract status, schedule of values, change orders and waivers. Other benefits of using a software platform of this kind include:
- Scalability – Tracks not only short term project tasks but can serve as a tool for future capital planning in the long term
- Customizable – Users have the ability to tailor a client dashboard based on individual user or project needs
- Remote manageability – Monitor daily operations of your project from across the country. Manage multiple projects simultaneously in one comprehensive database
- System integration – Talks to other systems-current databases, invoicing software, etc.
- Cloud based accessible – Data can be accessed from smart phone or tablet
All parties involved in the project-lenders, owners, property managers, and other shareholders can gain access to a customizable dash board to review reports and ensure that daily operations are running smoothly. If an issue arises, it can be immediately identified. Resources can be shifted and tasks can be re-prioritize before it causes scope or budget creep.
All of this data and up to the minute reporting can help lenders make better lending decisions, mitigate uncertainties, and consolidate multiple processes into one easy to review database or report. Viewing tasks, resources, budgets, and other critical risk factors can assist lenders in more easily managing projects and making smart financing decisions. The small additional investment at the project onset is not only valuable for the initial project and risk management for lenders but the data housed in the platform can be used to manage and maintain the property/portfolio. Not only will lenders reap the benefits of this new technology, owner/developers can use the data and reporting for capital planning, facility condition indexing and master planning, and funding projections for use in prioritizing and planning future expenditures can easily be pulled and analyzed by property owners and facility managers. Planning ahead using an online reporting and facility database management tool like SiteLynx can keep your building efficient and up to day without breaking the bank, ensuring greater tenant retention, better spending management, and an overall more valuable asset.