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The construction industry is booming, with an estimated $4.2 trillion dollars of global construction work to take place over the next 15 years. And as a capital-intensive industry, construction project portfolio management is a must.
In this complete guide, we’re digging deeper into the role of construction project portfolio management, the benefits, best practices, and more. By the end of this article, you will be well on your way to refining PPM for your construction business.
What is Construction Project Portfolio Management?
Construction project portfolio management ensures construction companies align their projects to key business objectives, maximize ROI, improve performance, and manage their resources efficiently. It enables a strategic approach while offering a holistic way of managing construction projects.
Why Does Construction Project Portfolio Management Matter?
The rapidly evolving construction industry is more competitive than ever before! With the likes of AI, robotics, cloud-based tools, and new sustainability practices taking shape, construction project portfolio management is a must!
By taking a more strategic approach, businesses can meet new sustainability targets, mitigate project risks, and manage widescale resources with ease. Construction project portfolio management also enables organizations to stay ahead of the curve and maintain a competitive edge.
According to TeamStage.io, around 70% of all projects fail. In an industry that is very capital-intensive such as construction, it’s important that projects are completed, and within budget. Luckily, construction portfolio management is a means to improve completion rates.
In a nutshell, the benefits of construction PPM are very appealing in a rapidly changing industry. It mirrors the increased demand for rapid implementation, rigid planning, and the need to succeed without the mishaps that might occur with traditional project management practices.
Still not sold on the mighty power of PPM? According to one survey by Monday.com, 4 out of 5 project managers say they ‘rely on PPM to get by’.
Recommended Read: What is Strategic Portfolio Management?
Best Practices for Construction Project Portfolio Management
As you strive for improved efficiency, results, and ROI with construction project portfolio management, it’s important to grasp the best practices! Here we’re going to discuss aligning projects to wider business objectives, the role of efficient resource allocation, risk management, and other practices.
Align Your Projects to Objectives
One of the key aspects of all project portfolio management, whether it’s for a construction company or a healthcare clinic is the emphasis on strategic alignment. Your projects and efforts must align to wider business objectives.
With construction project portfolio management, this means picking opportunities that support things like company growth, sustainability or innovation. Your projects must reflect the goals you set at the beginning of the year.
For instance, a building services company might aim to minimize resource inefficiency. By implementing construction portfolio management, they can prioritize projects where resources can be allocated effectively.
Continuously Optimize Every Project
There is a lot to learn from existing projects. One of the best practices is continuous optimization. Understand what projects performed best with performance KPIs and metrics. This will have a positive impact on the wider portfolio.
As the saying goes, “The definition of insanity is doing the same thing over and over again and expecting a different result.” Continuously monitoring the progress and outcomes of your projects helps you steer the bigger picture and rapidly improve the entire portfolio.
Top tip: Using a tool like edison365 can be a great way to visualize the progress and success of construction project portfolio management.
Manage your Risks at the Project and Portfolio Level
It’s important to identify, mitigate, and manage risks at both the project and portfolio level. As projects evolve, and more resources are needed, setbacks can occur. Taking a proactive approach to risk management is one of the best practices you can adopt for your construction project portfolio management.
Truth be told, risks can lead to devastating consequences for your construction projects. From flat-out failure to expensive repercussions. Mitigating risks with any project is vital to its success, but at a wider portfolio level, it’s a must if you want to keep progress smooth.
Some of the common risks that construction portfolio management can support include overcommitting resources, overrunning budgets, and project delays. In some cases, these hurdles will only reveal themselves with thorough PPM standards! Be vigilant with your construction project portfolio management.
Recommended read: Smartsheet vs Microsoft Project
Leveraging the Latest Technology
Technology has increased tenfold in the construction industry and must play a role in your construction project portfolio management efforts. From artificial intelligence to digital twins and cloud-based management tools, the future is an exciting one for the construction space.
However, a survey carried out by RICS found that 56% ranked cost, effort, and a shortage of skilled workers as the biggest barrier to digital adoption. It’s clear that we’re still early into the digital revolution for construction, but it is coming!
For this reason, one of the best practices of construction portfolio management is the willingness, and ability to adopt the latest tools and technologies that are emerging right now!
Technology has the power to automate, digitalize, streamline, and simplify many different projects, processes, and efforts across the construction sector. It will improve the efficiency and success rate of construction projects too!
4 Benefits of Construction Portfolio Management
There are plenty of benefits of construction project portfolio management, including improved ROI, increased project visibility and transparency, and better project success rates. Let’s take a look at these individually, shall we?
Improved Construction project portfolio ROI
Firstly, construction portfolio management empowers companies with data. From ongoing metrics and insights into budgets, to project progress and ROI analysis. This information is invaluable.
It enables construction companies to plan accordingly, reduce failures, and minimize inefficiencies. From one project to another, and across an entire portfolio. After all, ROI is the reason behind a lot of projects, the backbone of all efforts.
Increased Visibility and Transparency
If there’s one thing construction project portfolio management software offers, it’s increased visibility and transparency. In fact, it’s one of the biggest motivators in leveraging project management tools like ours!
What’s more, centralizing your efforts with construction project portfolio management enables better transparency at every level. From major stakeholders down to team members. It creates trust and openness around projects.
Better Project Success Rates
With so many projects failing to reach their goals, it’s no surprise that one of the major benefits of construction project portfolio management is better success rates. As we touched on earlier, clearer prioritization helps pick out the projects within your construction portfolio that are more likely to succeed!
Enhanced Decision-Making
Streamlining your efforts with construction project portfolio management enhances your decision-making. That’s because each decision is backed by real-time insights that are being tracked across your portfolio.
Data-led decisions are key to ensuring projects progress effectively, risks are avoided, and the overall operation is a success. See how reporting in edison365 can help steer the PPM ship for your construction business!
Other benefits of Construction Project Portfolio Management
Take a look at the list below to understand some of the other benefits of construction portfolio management that weren’t covered above!
- Quicker adaptation to market changes
- Better project alignment
- Reduction of redundant projects
- Well-managed resource allocation
- A balanced portfolio of short and long-term projects
- Increased accountability
Best Construction Project Portfolio Management Software
There are plenty of tools and applications out there to help execute your construction portfolio management. It’s important to know what features you need exactly, and how they can help.
Below we’ve created a Powerplay vs edison365 comparison table, along with crucial features you should look for when choosing construction portfolio management software.
| Key Feature | edison365 | Powerplay |
|---|---|---|
| Software Overview | edison365 prides itself on being the platform to “deliver it all”. Describing their end-to-end experience from project to portfolio management, innovation to powerful reporting. | An incredibly powerful platform for small to mid-sized construction projects and portfolios. |
| Portfolio Management | A comprehensive portfolio solution with Gantt views, customizable workflows, task management, and more. Ideal for large-scale projects. | A great solution for small to medium construction portfolios, with basic portfolio views and reporting dashboards. |
| Project Management | Powerful project management capabilities, including Gantt Charts, customizable templates, workflow functions, real-time reporting, and business case features. | Powerplay offers basic Gantt Chart functionalities and task-tracking features for most construction projects. |
| Resource Management | edison365 offers deep resource scheduling across all types of resources, cost tracking, and more. | Although less customizable than edison365, Powerplay offers basic resource allocation, focused on labor allocation for small construction projects |
| Innovation Tools | A plethora of gamified innovation and ideation tools like crowdsourcing, triage sliders, and reports. | Limited or little innovation management tools, with a focus on traditional project management. |
| Ease of Use | Very user-friendly, with a drag-and-drop feel, and little need for specialist consultants. | The minimal setup makes Powerplay a straightforward option but lacks full customization and advanced portfolio management. |
| Integrations | Integrates well with the wider Microsoft environment for a familiar, secure experience. | Limited access to third-party integrations, with a focus on the tools and functionalities built into Powerplay |
| Support and Training | Regular tutorial videos, 24/7 customer support, and robust onboarding. | Basic support with some training resources. |
| Pricing | Various subscription-based licenses are available to meet the needs of different project management teams. | A more cost-effective alternative to edison365 for smaller construction projects and portfolios. |
| User Rating | edison365 has a user score of 4.7 on G2 | Powerplay has a user score of 4.5 on SoftwareAdvise.com |
Construction Project Portfolio Management Software Features
From real-time reporting to risk management, here are the key features you must look for when choosing project portfolio management software for your next construction project!
Real-time Reporting for Construction Projects
Reporting is an absolute must for construction portfolio management. It’s the backbone of decision-making and helps you determine and deliver your most vital projects. Not only can it help you identify risks, but it ensures you’re working optimally in every sense across your construction portfolio.
Accurate Risk Management
The next most important feature of construction portfolio management software is risk management functionalities. This is where setbacks, hurdles, and costly u-turns are prevented! By identifying and mitigating risks at both a project and portfolio level, construction projects can run smoothly.
With some projects costing well into the millions of dollars, there must be little room for error and mishaps. Ensure your next construction project portfolio management software is equipped to help you quash these effectively!
Best-in-class Resource Management
Thirdly, your choice of construction project portfolio management software must be able to support your resource management needs. The construction sector is very labor-intensive, and most projects will require an array of different skilled workers, equipment, and more.
These are all resources, and their whereabouts, condition, availability, and time must be well-managed. Luckily, most robust project portfolio management tools come equipped with resource management functions.
Common Construction Portfolio Management Challenges
Construction PPM doesn’t come without its challenges! It’s important to be aware of things like complex resource management, fragmented project data, project misalignment, and aggregating portfolio risks.
These construction project portfolio risks and challenges can be minimized with careful consideration. First, we need to understand them in a little more detail. You can never be too cautious, after all!
Complex Resource Management
One of the major setbacks when it comes to construction project portfolio management is complex resource management. But what does that mean? In layman’s terms, trying to balance everything from equipment to labor, and materials and lead to drastic setbacks and inefficiencies.
The construction industry is a complex one, requiring the output of various factors. It’s not as easy as say, IT project portfolio management! Where the equipment is minimal, the materials few, and the labor small.
To overcome this construction portfolio management challenge, it’s important to be rigorous with resource management and tread carefully. Try to break each segment down into bitesize chunks. Something you can manage accurately without a headache! If that means receiving a helping hand, so be it!
Fragmented Project Data
The next challenge construction PPM poses is fragmented project data. This occurs when data is here, there, and everywhere. From project to project, portfolio to portfolio, real-time on a large scale that may be missing parts of the puzzle.
Analyzing data on this scale not only takes much more time but can lead to poor decision-making if the data collected isn’t accurate. Like complex resource management, create smaller, digestible reports that keep this clear and concise.
Depending on the nature of your reports, consider delegating certain reports, and decisions to individuals who are closer to the matter at hand. For instance, for a construction project focused on delivering a digital twin, decide if the person leading those efforts is better suited to take care of reporting.
Fragmented project data is a huge construction portfolio management headache! Now you know, minimize this issue before it wreaks havoc over your reports!
Project Misalignment
Although construction portfolio management aims to squash project misalignment, this can still times happen! Typically, with large-scale portfolios, some projects may be inaccurately prioritized. This leads to project misalignment.
Perhaps the numbers didn’t quite add up, or the resources were reports too complex. Whatever the case, it’s important to keep on your toes. Don’t be fooled by some of the construction project portfolio management shortcomings like this!
Balancing Portfolio Risks
Finally, portfolio risks! Managing risks associated with one project is much easier than managing – and mitigating – risks across an entire portfolio. Obviously! Because each risk interacts with other risks differently at the portfolio level. More complex scenarios threaten project progress, and heavier setbacks can occur.
What’s more, risks accumulate, and while you may be capable of managing several project risks, the prospect of combating several more on top, might not be so enjoyable! But fear not, with adequate planning, and robust risk management tools, you can prepare yourself for anything.
This is one of the hardest challenges to go up against with construction portfolio management, so it’s best to have a tool like Powerplay, edison365, or any other solution, to help you progress seamlessly!
Final Thoughts on Construction PPM
That’s a wrap on our construction project portfolio management guide. A mammoth introduction to some of the biggest benefits, most challenging factors, best practices, and more.
It’s clear there’s a lot to gain by managing construction projects in a more strategic, holistic way. It enables companies to move into that fifth gear and compete much more strongly as we move forward in an ever-evolving industry.
From AI to sustainability goals, construction portfolio management is the extended arm that helps organizations act on both short-term and long-term objectives. When it comes to the breadth of tools out there, the world is your oyster!
Investing in the right tool to help steer your construction project portfolio management ship is paramount. And whether that’s edison365 or Powerplay, we’ll let our comparison table do the talking!
Ultimately, construction is the backbone of society and is a tremendously important industry with labor-intensive, costly projects that occur all around the world. Construction portfolio management therefore cannot be overlooked, as it has the potential to be game-changing in both the present and future!
