Key performance indicators (KPIs) are critical key indicators of progress towards the intended outcome. KPIs focus on strategic and operational improvement, provide an analytical basis for decision-making, and help focus attention on what matters most.
What is the meaning of KPI?
A Key Performance Indicator (KPI) is a measurable value that shows how well a company achieves key business objectives. KPIs are used by organizations at multiple levels to evaluate their success in meeting targets.
High-level KPIs may be concerned with the overall performance of the business, and low-level KPIs may be concerned with processes in departments such as sales, marketing, human resources, support, and others.
What are the aims of construction KPIs?
Construction KPIs are designed to help you understand how each organization performs inside a specific project. There are three main areas to consider here:
- The quantity surveyor and general assistant
- Construction project manager
- Construction supervisor
Each area will be studied to determine how it contributes to the overall success of the project. Of course, there is also a project goal to consider. How do these individuals contribute to the achievement of the product goal and the retaining of clients in the construction industry?
Why KPIs are important for Construction Projects?
Although many details of a project can be measured by your business, efficient performance analysis involves prioritizing a restricted amount of main categories of interest to track general project success and business health. These would be economic as well as non-financial issues that can be quantified.
Stronger knowledge of your projects ‘ overall quality will assist to decrease modifications and rework. Keeping a thumb on quality metrics is, therefore, a surefire way to keep up with budget and timing.
The following KPIs will assist your team to preserve a high-quality standard:
- Number of defects
- Number of defects due to workmanship
- Time to rectify defects
- Number of site inspections conducted
- The ratio of the number of inspection passed to the total number of inspection
- The total cost of rework
- Customer satisfaction
- Internal customer satisfaction
A safer location entails less danger and costs in the long run. If there are problems, they can set your project back in time as well as money. Beyond that, incidents of safety can imply greater payments for insurance.
Knowing and understanding your safety rating is therefore essential in order to reduce your expenses and keep your employees productive. Important safety KPIs for building include:
- Safety/ incident rate
- Number of safety meetings/communications
- Number of accidents per supplier
Performance metrics can deliver the productivity of a project. By assessing and understanding how time and effort are being spent, teams can adjust and allocate extra resources or instruments to those fields where they are most needed to achieve project objectives.
Here below some KPIs related to construction performance:
- Waste/recycling per job
- The average revenue per hour worked
- Percentage of equipment downtime
- Percentage of labor downtime
Examples of KPIs that can be used on projects include:
- Cost Vs Budget, the budgeted cost of the job that was actually done during a particular period of time in performing a planned job.
- The number of complaints.
- The number of accidents/incidents.
- The number of defects.
- The number of variations.
KPI Report for Project Activities
Seven main processes KPI indicators that companies say are particularly helpful in interpreting general performance. The studies indicate that contractors can decrease risk by implementing particular project management procedures, thereby minimizing downstream issues and enhancing efficiency.
The report’s following overview includes seven project activity categories, including:
1. Problems found in construction documents
3. Change orders
6. Labor productivity
7. Quality and close-out
What are the examples of construction KPIs?
There are nearly too many key performance indicators in construction to go through them all. However, we can look at a few common and important KPIs that will assist you in measuring success.
This is often a key indicator of your performance’s success. In an ideal world, labor productivity would be high. Why? Because it means that a large number of tasks are completed every day. The less productive the staff, the longer it will take to complete the project. As a result, the overall costs may increase.
2.Safety and inspections
Health and safety are crucial parts of your construction KPI metrics. Can you consider a project a success if there were numerous incidents on-site? How does it affect overall success if a huge proportion of your staff is injured or call in sick? Obviously, the more safety concerns there are, the worse the issue becomes. They cause disruptions, which decreases labor productivity and slows the whole project.
It can also be costly because you must hire new employees to replace damaged ones and pay to address any safety problems. As a result, a low health and safety incident rate imply a successful construction project.
Naturally, one of the best ways to determine how impressive your performance is is to ask your clients. If the satisfaction rate is high, it indicates that you were successful from the client’s perspective.
Regardless of anything else, you may rest assured that you exceeded their expectations and met their goals. However, this does not necessarily imply that the project was a complete success, as other variables can come into play.
4.Construction time and cost
In addition, the cost and duration of construction are important components. Yes, your clients may be pleased, and your health and safety standards were high, but how much did it cost? Add up all of your overall expenses to see how much it will cost to reach your goals. Ideally, you want the cost of construction to be less than what you are paid by the client. As a result, you’ve made a profit.
Otherwise, you will build something without getting any reward from it. The construction time is important because it often correlates with the costs. As previously stated, the longer a project takes, the more expensive it is.
5.Impact on environment
The construction industry must wary of its impact on the environment. The goal here is to have as minimal impact as possible. This includes measuring factors like the number of carbon emissions produced during construction, the amount of energy used, the amount of non-recyclable waste generated, and so on.
There are several other key performance indicators for construction projects, but we do not have the time to go over them all. In essence, you’re looking at all of the many elements of your project and how they contribute to the achievement of your goals. Consider the three key areas of management we discussed earlier: quantity surveyors, project managers, and supervisors all play important roles that contribute to the overall success of a project.
Project Management and Construction KPI Sample Template XLS
Project Management KPI Excel Template XLS is the simple visual representation of business KPIs to help Project Managers or teams in making a decision about the achievement of business goals and objectives. It’s the best way of communicating the information about performance indicators to its targeted audience.