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Construction KPIs: Key Metrics for Measuring and Improving Project Performance

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You might be wondering, how can one measure the success rate of a project. How to know if you will achieve your goals or not? How to know if you are on the right track or not?

For many people, it will be easy to consider the financials in a project as an indicator of the performance of the project. It is shown that about 43% of construction businesses usually consider the financial goals of a company their priority instead of organizational resilience. But this is where they make a mistake. If they wish to keep a record of their performance or want to have a deep insight into the financial performance of the company, they must incorporate construction KPIs into their business and let the KPIs do their job.

What Are KPIs? 

KPIs or metrics are defined as the quantifiable measurements used by businesses to increase their efficiency and gauge their performances in day-to-day operations.

Advanced companies and businesses use KPIs to estimate their day-to-day working efficiency. KPIs can measure everything.

What is the importance of Construction KPIs?

The industry of construction has been expanding at an exponential rate. In this ever-increasingly industry, tracking your performance is considered to have a very prime importance.

To meet the demands of customers and the need to produce products faster and more efficiently, companies have to set and monitor the goals closely. This is where KPIs help such companies achieve their goals.

KPI is crucial because it provides you with a standard with which to compare your current performance. KPIs demonstrate whether or not you and your team are reaching your manufacturing goals. Executing and utilizing KPIs in your construction company allows you to set goals, develop a successful technique to achieve your objectives, and assess your performance.

How Can You Make Sure That Your Company Tracks Construction KPIs? 

When you introduce KPI into your construction business, you might face a few challenges with many different projects. Not everyone in your construction company or business may know what construction KPIs are, how to use them, and what benefits they provide.

For this purpose, you need to ensure that everyone on your team is on the same page. Everyone knows what construction KPIs are. Arrange some educational sessions for your team to help them understand the basic concept and why construction KPIs are very important for your organization to move ahead in this field and how these KPIs when used efficiently can increase the overall productivity of your construction company.

You must use KPIs to get insights into what is required in your business and determine which areas need further improvement. You have to share this data with everyone on your team to enlighten them about the usefulness of these KPIs.

Benefits of Key Performance Indicators

Key Performance Indicators (KPIs) are a way to measure the success of an organization and its employees.

You may have heard about KPIs before, but if not, here’s what they are:

– Key Performance Indicators are metrics that measure how successful an organization is at accomplishing its goals.

– KPIs can be used to track how well an organization is performing against specific goals or objectives.

– KPIs can be used as a tool for measuring employee performance and satisfaction so that managers can make sure they’re addressing any issues before they become more serious problems

Why use Construction KPIs? 

Using the financials as a primary indicator of your company’s performance is like calculating the calories in a cake after it has been baked. You might want to know this for the sake of your interest or might want to know it out of excitement, but this is useless if you wish to cut down on your calories. How can you do that once the cake has been baked and is ready to eat? You could have controlled the calories in the cake before baking it by adjusting the ingredients of the cake.

Similarly, you can not rely on financials only to track your performance. You must take the key performance indicators into account to ensure that your construction project or company is working according to the goals and objectives of the company. These KPIs will help you record everything and make preparations and amendments accordingly.

Examples of Common and Important Construction KPIs: 

Let’s now discuss why construction KPIs are important and how you should measure your profits and productivity using such KPIs.

A few important and commonly used KPIs are mentioned below:

  • Schedule performance: This KPI helps you measure the progress of your ongoing project according to your schedule as you planned. It helps you gain an insight into how the progress is going on and if it will be able to achieve its desired results within the time limit allocated or not.
  • Cost performance: This construction KPI helps you get to know the real costs of the projects when compared to the budgeted costs. It helps you gain an understanding of the total expenses of the project. This enables you to carry out the project wisely.
  • Safety performance: This construction KPI is used by construction companies to measure the safety performance of the construction site. It helps you maintain the overall environment of the construction site. This understanding helps you avoid serious mishaps at the site of construction like accidents or near misses.
  • Quality performance: Quality performance is another very important construction KPI that helps you track the quality of the construction work going on. It helps you carry out your project according to the standards set and enables you to keep track of the performance.
  • Productivity performance: This construction KPI helps your company measure the productivity and efficiency of your company. It enables you to enhance the output of the construction crew and increase the overall productivity of the company.
  • Materials management: This KPI can help your construction company in several different ways. It helps you track several processes going on in your construction company all at once. It gives you insights into processes like ordering, delivery, and storage of construction materials.
  • Equipment utilization: This KPI is used by several construction companies to measure the efficiency and productivity of construction equipment. It is very essential to maintain a check and balance in the company and this KPI does it all. It helps you maintain the equipment in its ideal form.
  • Customer satisfaction: Satisfaction of the customers is a top priority for many businesses. This KPI helps you measure the satisfaction rate of the customers. This helps you maintain and retain your old customers as it is very difficult to gain new customers.
  • Environmental performance: This construction KPI helps you track the impact of your ongoing project on the environment. Processes such as waste management and energy usage are all monitored by this KPI.

How to Track Construction KPIs with Dynamics 365?

To track construction KPIs with Dynamics 365, you need to follow these simple steps:

  • Specify the required KPIs:

You first need to specify the KPIs according to your demand. Your construction company may have specific demand for a specific project. You must keep those demands in mind and select your KPI according to the demand. Find out which KPIs apply to your project and why you need that construction KPI.

  • Set up data collection:

Once you have specified the KPI you desire, next connect Dynamics 365 to the appropriate data sources to compile all the data which may be necessary for your KPIs.

  • Create KPIs in Dynamics 365:

After connecting Dynamics 365 to the data sources, use the KPI functionality in Dynamics 365 to create custom KPIs. Then configure them with the relevant data.

  • Visualize KPIs:

Dynamics 365 provides you with the ability to visualize your KPIs using charts, dashboards, and reports

  • Monitor and adjust:

Assess your KPIs regularly to monitor the overall productivity and performance and determine the areas where more improvement is required. If required, make adjustments accordingly depending on your needs.

Implementation and Evaluation

If your construction company wishes to successfully implement the construction KPIs, you need to prioritize your too concerns and select the appropriate and the best technological support. Here are a few demands you need to keep in mind before implementing the KPIs:

  • Standardizing reporting and measurement
  • Achieving support from key players
  • Incentivizing participation
  • Estimating overall productivity and progress
  • Considering the effect and making transformations
  • Standardizing reporting and measurement


Why are key performance indicators so important?

KPIs are important because they help you understand where you as an organization stands. It helps you set goals and gives you a deep insight into if you are making progress or not, if you are achieving your goals or not, and if you’re headed in the direction you want.

What are examples of construction KPIs? 

There are many construction KPIs used by different construction companies according to their demands. A few common ones are mentioned below:

  • Equipment utilization
  • Productivity performance
  • Safety/ incident rate
  • Number of safety meetings/communications
  • Number of accidents per supplier
  • Number of defects
  • Number of defects due to workmanship
  • Time to rectify defects
  • Number of site inspections conducted
  • Waste/recycling per job
  • The average revenue per hour worked
  • Percentage of equipment downtime
  • Percentage of labor downtime

What are the types of KPIs used in the construction business? 

The most common conventional form of construction KPIs used in these businesses are

  • revenue
  • cost
  • profit.

Profit deals with the gain and the profit margin a contractor makes from the construction project. Especially when dealing with a risky project, the profit margin needs to be closely monitored to ensure the project is progressing well.

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