Point-of-construction data feeds quality management metrics.
In The Balanced Scorecard: Translating Strategy Into Action, authors Robert S. Kaplan and David P. Norton assert that measuring business strategy needs to be an integrated balance of both financial and non-financial measures. Generally, it is the finanicial measures that are the well-established and well-adopted metrics, relatively easy to generate and easy to understand, such as gross revenue, gross profit and operating income, for example.
In the construction industry, it is the non-financial measures that are less readily available or not available at all, regrettably. Nonetheless, the non-financial measures are critical to the success of construction management operations, the core business of general contractors and construction managers. The key challenges with Enterprise Field Management are two-fold:
- Establishing the non-financial metrics to successfully define and measure business strategy;
- And, using the non-financial metrics to drive behaviors, advance performance and cause outcomes, with the goal of optimizing profitability and promoting growth.
Non-financial measures are at the crux of Enterprise Quality Management.
Today, non-financial measures are not at the forefront primarily because the data points and related information, which form the basis for the measures, such as quality coverage, conformance of work put in place the first time and turnaround time to correct deficiencies, is either locked up in paper documents or in digital files, archived away at substantial completion. Documents and files cannot be aggregated for reporting purposes during and after the projects. Or, the data points and related information, which form the basis for the measures, are not documented and captured at all in the field.
If the data points are not captured, managed, tracked and tasked at the point-of-construction in the field or on the job site, accordingly the information cannot be rolled up for reporting purposes, first at the project level and then across projects at the enterprise level. Upstream, dashboard-style reports on non-financial metrics of quality management, with trends and analytics for managers, directors and executives, depend on the thousands or millions of data points downstream at the point-of-construction, day by day, hour by hour.
Point-of-construction data feeds quality management metrics.
Grouped in to like categories or “perspectives,” as referred to by Kaplan and Norton, the measures of both financial performance and non-financial performance, such as quality management, collectively form the Kaplan and Norton’s “scorecard.” The scorecard serves to narrate the story and paint the picture of the strategy of each business unit and to the enterprise itself. Linked by a series of cause-and-effect relationships, outcome and performance driver measures form the structure of the narrative, by chapter and verse. Outcome measures are lagging indicators and performance driver measures are leading indicators.
According to Kaplan and Norton, outcome measures signal the effects of short-term actions. Performance driver measures signal how each business unit and the enterprise itself needs to act, today and in the present time, in order to create value in the future. A scorecard of connected or linked outcome measures and performance driver measures promote short-term actions which serve long-term improvement programs across the enterprise.
Three key points in summary:
- Non-financial measures of quality management are critical to construction management;
- Quality management metrics depend on aggregated point-of-construction data;
- And, quality management metrics balance outcome measures and performance driver measures.
Case Study: Turner Construction Company
Measuring and Managing Construction Quality with Field Software - a Turner Construction Case Study
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