Business Analysts that want to be profitable and understand how they can make quantifiable gains as they scale up must prioritise Business Analysts as a crucial skill set and operational imperative. Businesses are aware of this as well; in a BCG survey, for instance, 72% of executives in the manufacturing sector stated that they thought sophisticated analytics was vital.
Meanwhile, the construction industry’s profitability is constantly in jeopardy due to issues with employment, the rising cost of building materials, and the fragmented character of the construction ecosystem.
According to estimates from the World Economic Forum (via Autodesk), society could save $100 billion worldwide with a 1% decrease in construction costs. With the construction industry’s ecosystem striving to carry out projects in a rapidly evolving setting, these existential challenges warrant organisational changes to better negotiate the trials and tribulations at hand.
To put these potential obstacles into greater perspective, we also need to take the average cost of construction companies into account. Assuming that labor, materials, tools, and overhead make up the majority of a construction project’s total cost, concentrating on your areas of control will help you become more profitable. For instance, you might negotiate work to fit the resources you presently have, even though you might not be able to control the cost of materials. You can also prepare to improve internal procedures to increase efficiency. Check out the business analysis course to learn more.
How can these colleagues from different departments collaborate to achieve improved profitability results? Here are five ways:
1.Procurement Strategies
In order to evaluate demands based on ongoing in-flight projects and corporate annual goals, as well as to set objectives for procurement strategies and capital investment, a business analyst, connected to company forecasting, can collaborate closely with inventory managers.
When addressing financial commitments related to inventory, they may plausibly accomplish strategic themes together and put cost-cutting measures in place, such as:
- Appropriate Safety Stock Purchasing: In order to define policies for shelving inventory and planning for needs (i.e., how much to buy, when), a business analyst and inventory manager can collaborate to cross-pollinate company-specific analytics related to equipment purchasing, historical trends of project needs, and current commitments. Such collaboration can assist appropriate procurement to avoid inventory stockouts and help prevent excessive inventory procurement that would otherwise result in needlessly increasing overhead. Furthermore, utilising artificial intelligence in advanced analytics might assist in forecasting future requirements.
- Proactive inventory audits to improve long-term inventory management results and avoid unnecessary spending during project lifecycles.
- implementing sophisticated, cost-centric inventory management techniques, such as just-in-time inventory. In order to deploy only what is necessary when needed, this approach prioritizes strategic, lean operations, limiting wasteful inventory procurement (and, as mentioned above, preventing needlessly escalating overhead). In order to prevent job site hoarding, inventory managers must also take proactive measures, which is why inventory tracking—such as Bluetooth tags and GPS trackers is essential.
- Calculating constant demand (X), fluctuating demand (Y), and uncertain demand (Z) involves doing an XYZ analysis. Inventory managers can more successfully attain more favourable results by evaluating these inputs, which rate the frequency and predictability of item demand over time.
2.Job Costing
Apart from preparing financial projections and reports, business analysts might collaborate with inventory managers to implement a task-costing approach. In the construction industry, “job costing” refers to the proactive measures and procedures used to monitor the related expenses and income of a particular project over the course of its lifetime.
This procedure can be used for inventory management, allowing managers of inventories to set rental rates (daily, weekly) for equipment that is sent out into the field, whether it is single items or large quantities of inventory that have been packaged and delivered all at once. The cost incurred for each day (or week) those things are in the field is then determined by job costing software.
This process can help:
- Inventory managers can more effectively track and profit from the equipment they deliver to their network of job sites.
- Provide borrowers with financial incentives to return equipment on time, therefore cutting down on the amount of “time on site” for a specific piece of inventory and avoiding the need for extra safety stock, rerouting equipment from other job sites unnecessarily, etc.
- Give building companies new sources of income.
3.Reporting
Inventory managers can collaborate closely with Business Analysts to offer further reporting options, such as the following, in addition to the business analytics dashboards that an analyst may create for a business owner as covered in the job description above:
- Tool Management Reports: These are data on how inventory is being used over time (such as average “days on site,” as we covered previously, to help improve how inventory is used going forward; alerts related to services, to help proactively manage equipment maintenance, increase longevity, and save costs; inventory assigned by job site or individual, to increase accountability; etc.).
- Asset-specific reports, like usage on some smart power tools, can assist in identifying issues before they cause a breakdown that would stop work on the job site and give customers and inspectors peace of mind that installations were completed according to specifications.
4.Interoperability
The process of interacting with other construction systems (such as software platforms, apps, and processes) and determining how well they can share information and function together is known as construction interoperability.
According to a KPMG analysis, only 16% of executives asked said their firms had completely linked systems and tools. Considering how fragmented the construction environment is, Business Analysts this is a big issue. A method for locating and fixing faulty data has only been used by 36% of businesses (Autodesk/FMI research).
Business analysts and inventory managers working together can begin to develop system interoperability that can serve as a single source of truth and stop events that drive up costs, such as rework (for example, according to the same Autodesk/FMI analysis, 14% of all construction rework may have been caused by bad data, creating $88.69 billion in avoidable rework globally).
Business Analysts Possible interoperable systems include:
- Connecting data flow between civil engineering, architecture, and design (e.g., Revit, AutoCAD, SketchUp, Bluebeam, Autodesk BIM 360, Civil 3D, ArcGIS, Bentley STAAD, etc.) and project management systems (e.g., Procore, Autodesk Construction Cloud, Contractor Foreman, Houzz Pro, etc.)
- Establishing a connection for data flow between mission-critical systems (such as project management and design) and inventory management systems
- Creating digital twins, such as asset, component, system, and process twins, can offer decision-makers real-time data and simulations, predictive analytics, and comprehensive views of cross-network activity.
5.Planning For Addressing Technical Debt
Operational delay is caused by dependencies that are introduced when implementing new software and hardware solutions, a phenomenon known as technical debt.
Here are five strategies that will help construction companies avoid technical debt.
- To keep technical debt associated with construction activities from accruing, an inventory manager may collaborate closely with a business analyst, construction technologist, or both.
- They might collaborate with IT to implement cloud-based solutions, such as real-time collaboration.
- To make sure that every inventory activity is captured in real-time, they will install gear for inventory tracking.
- They’ll see to it that mobile apps and construction ERPs are integrated.
- To guarantee appropriate MDM deployment and Business Analysts data security best practices with regard to inventory, they might collaborate with the cybersecurity team.
Conclusion
The construction industry is confronted with severe operational difficulties. Construction Business Analysts can concentrate on aspects they can control, such as streamlining internal procedures and enabling the team to collaborate more effectively, even when they may not be able to influence the cost of materials. When inventory managers and business analysts collaborate, businesses can become more strategically oriented, operate more nimbly and eventually become more profitable. Check out the business analysis training to learn more.
