5 Factors to Consider When Starting Your EPC Project
For EPC project companies, there is lot more to project management than just pitching and winning projects. When contractors think about new projects, they have to start with an effectively prepared project estimate. They have to plan thoroughly to come up with a project cost that’s viable to them. No doubt, today’s businesses use ERP for constructions to simplify their project planning process.
Let’s look at five factors that EPC contractors have to consider while starting a new project.
- Project Cost Estimation
While preparing your EPC contracts, you need to consider the cost of several components to add up the estimated project costs. Some of these components are:
- Detailed designs of everything to be constructed
- Site survey costs
- Directs costs such as fixed labour
- Indirect costs
- Cost of procurement of materials and machinery
- Overhead costs
While calculating project costs, you should aim to get it as accurate as possible. The fact is, project estimates are predicted and can be uncertain. If project proposal gets approved by a project sponsor, you will have to make do with the approved project cost.
To keep the budget under control, you will have to bring in operational efficiencies through solutions such as the best software for EPC contractors.
- Design Control and Updates
Before starting a project, it is ideal to get all the designs finalised. Make sure you understand the challenges of the approved design. Any design changes that come up once the work has begun, can add to the project complications, as well as cost of execution.
Get necessary approvals on design from the concerned managers before starting your work. Maintain proper documentation of all the procedures involved in the implementation of a design. Tracking of design changes will help you later to study the project later.
If needed, you may have to submit reports with reasons for delay in projects. In such cases, an automated software can help you to report the details of the evolving design that’s affecting the project progress.
- Materials and machinery
When you bid for a project, you have to consider the equipment and the machinery that you’ll need for successfully carrying out the project tasks. While creating your proposal, you may consider the market price of the materials at the time of bidding.
Remember, sometimes a project can go on for years. Consider the fluctuations in market rates of materials while quoting for the project. You may have the necessary equipment for the project but have you taken into consideration the maintenance costs and replacement of parts during the phase of project execution.
Another important factor to consider is the availability of materials and equipment. How soon do you need to order the materials and equipment? You should know these details so that materials and equipment are readily available whenever you need them on the project site.
- Project risk factors
From heavy rains to a union strike, project risks can be anything. Rise in the price of materials can impact the project budget. Usage of outdated machinery on a project site can lead to inefficiencies and delays. Inadequate safety gear can cause mishaps on project sites. If the project gets delayed due to any reason, then the project costs shoot up.
Other than these risks, there are risks related to compliance issues, environmental safety, regulatory issues etc. EPC contractors have to consider all the risks related to project execution at the project planning stage itself. Manually tracking these risks may not be easier. Automated processes can be useful for efficient project planning that helps in minimising and managing the risks identified in a project.
- Operational costs
There are several departments involved in successfully running EPC projects. Bigger the scale of the project, bigger will be the team required to manage it. What about the processes? Businesses have to invest in technologies from time to time to stay competitive. The companies still relying only on phone calls and e-mail messages to co-ordinate are losing time and effort of their people in the co-ordination process.
If multiple projects are going on, how many excel sheets will the senior managers handle at a time. At each level the amount of work increases if they have to focus on their daily tasks and update the manager sitting elsewhere through office phones. Modern businesses are using ERP software for constructions to monitor and manage their resources.
Have you noticed? Businesses with integrated processes save more time and enjoy reduced cost of operations due to automated features. Finally, the level of automation in managing the people and processes will determine the operational costs for EPC contractors.
If you are looking for the best construction management software to support your EPC projects, consider OMNI ERP for project-based businesses. Learn about the integrated features offered by OMNI ERP, call ________