Up to 7% savings on construction projects run using LetsBuild shown in Danish research report

7% savings in construction

Yes, you hear that right!

According to a report on the value of using digital IT tools in construction published by the SBi (Statens Byggeforsknigsinstitut), the Danish National Building Research Institute affiliated with Aalborg University in Copenhagen, the use of LetsBuild can result in savings of up to 7% during the building process. We could not be any prouder of this outcome!

Read more: How to reduce construction delays by more than 20%

What makes it even more special is the fact that it’s the first market-oriented empirical research project of this kind in Denmark. All insight collected stems from three major Danish construction projects where our real-time project management solutions were used – the ‘Mærsk Tower’, the ‘Niels Bohr Building’ and the Danish Defence Estates and Infrastructure Organisation (FES).

The report reached some thought-provoking conclusions, concerning the future of construction including “measured benefits for the clients”, “opportunities to achieve significant efficiency gains” and “better insight into the status of ongoing construction activities”.

The research

Let’s dive first into some details around the research and the ways in which a tool like LetsBuild can enhance decision-making and empower communication between the office and construction site.

First things first, the main purpose of the research was to explore the impact of digital IT tools on various aspects of construction. There were three main areas of focus for the case studies:

  1. Managing progress in the construction project portfolio.
  2. Management of construction activities.
  3. Communication between the construction management team and the trade contractors.

The examination of large-scale projects, such as the ‘Mærsk Tower’ and the ‘Niels Bohr Building’, in conjunction with the insight provided by the FES, made clear that the digitalisation of the construction process can truly change our industry. It was found that optimised information flow and data-driven decision making were the most significant elements contributing to the continuous improvement of project management efficiency both in terms of time and budget.

Gains from using construction software

Some time ago, McKinsey published a detailed report about the crucial role that digital tools can play in introducing a new way of working to construction. The SBi report verifies this by acknowledging that tools like LetsBuild provide great value to the industry.

In a nutshell, here are 6 ways that real-time project management software can boost the construction process with evidence shown from the study:

1. Decreased costs

In this case, the numbers speak for themselves. According to Martin van der Watt, project manager at Juul & Nielsen (Mærsk Tower Project), there was a directly visible gain of approximately 2-3% due to the use of LetsBuild’s real-time project management software. But that’s just half the story as the SBi report indicates that if the whole span of the project was measured a total saving of 7% could be reached.

The total gain for the entire project has not been investigated here. But assuming that there  is the same process efficiency for the whole project apart from a slight effectivity drop in the last months (a common thing in construction), you can potentially end up with seven percent savings.
– Jan Fuglsig Lambrecht, author of the SBi report.

On top of that, the numbers for the Niels Bohr Building project are more than impressive. The analysis shows that the total amount of benefits measured by the use of LetsBuild was 19,201,833 Danish Krone which is equal to €2,579,690.

2. Effective project monitoring

One of the most insightful findings from the SBi case study had to do with monitoring the progress of a construction project. The Danish Defence Estates and Infrastructure Organisation (FES) reported that thanks to the use of LetsBuild, they were able to decrease their administrative burden as a result of the unhindered communication flow and comprehensive documentation.

In that way, it was easier for the client to keep a complete overview of their on-going construction projects without wasting too much time searching around for the various progress updates.

3. Financial control that’s up to speed

Another significant remark made in the SBi report concerns the improved financial control that FES experienced by implementing construction software on their workflow. More specifically, LetsBuild made it possible for them to keep good track of their invoicing and manage their cash-flows to contractors with higher accuracy. In that sense, LetsBuild was also able to help the client with being sure that all their payments were in accordance with the produced workflow.

Check out also: How to manage your construction sites during and after COVID-19

4. Improved project transparency

The introduction of digital IT tools in construction can have a positive influence on project transparency. By allowing and facilitating big data management, useful and understandable insights into all aspects of a project can be for the first time provided to everyone to share and act upon.

Thanks to clear data representation, all project stakeholders can be confident that their tasks are proceeding according to plan. Just to name a few examples, FSE saw a great improvement in cashflow management, progress documentation and data-driven decision making.

5. Reliable task management

Among others, the SBi report demonstrated that construction activities management can be much easier when a digital tool like LetsBuild is implemented. According to the findings from the Niels Bohr Building project, there were considerably fewer interruptions of the construction process, and by extension fewer delays due to better coordination between the various project agents.

Moreover, the optimised flow of information contributed to a decrease in project errors. It’s understandable then that construction software can establish a highly efficient resource usage system which is based on the powerful insight that the construction decision-makers have at their disposal.

6. Insightful communication between the project team and the trade contractors

The analysis of the “Mærsk Tower project” offered some encouraging data regarding the establishment of practical and effective two-way sharing and communication using digital IT tools. It was observed that LetsBuild facilitated the creation of a cooperative environment between the two sides as a result of the more qualitative insights for the project management team and the trade contractors.

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Both were able to understand better the numerous interdependencies between their tasks and to properly plan their next moves. This optimised information management led to a smarter delegation of responsibilities and more effective workforce utilisation. It goes without saying that, all the above had a very positive impact on workflow planning and budget savings.

What the experts say

Starting from the author of the SBi report, Jan Fuglsig Lambrecht highlights the need for adopting digital tools in the construction process:

People in construction should use such digital tools. It will not only result in significant financial savings, it will also make project planning more advanced and help main contractors with prioritising their work on a better knowledge base.

That’s a statement of tremendous importance, as it’s coming from an expert source with great knowledge about the needs of the construction industry.

But he is not the only one who embraces the advent of digitalisation in construction. Martin van der Watt, project manager at Juul & Nielsen, says about the use of LetsBuild:

It has given us clarity over the problems of the project and we have gained valuable knowledge on how we can tackle them. It also gives greater transparency in terms of reporting.

And he continues with a promising prediction that they will be able to save even more in the future. All they need is to implement a standardised plan for using the new digital tool.

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At LetsBuild we are nothing but thrilled with the impact that our software has had on the development of these three major construction projects:

There’s no one else in the world, who is able to show such high, scientifically documented savings on construction projects running into billion of dollars. Let’s say you save 5% on construction in Denmark, then it’s more than 10 billion a year.
– Ulrik Branner, Executive & Board Member at LetsBuild.

More to come

But the good news doesn’t stop here. The report received a warm welcome by the whole industry and more importantly by the public sector. The Danish Building and Property Agency (Bygningsstyrelsen) seems convinced that the future of construction lies in digital technologies.

Signe Primdal Lyndrup, vice-president of the Danish Building and Property Agency,  acknowledges the importance of digital IT tools in construction:

The Building Agency is very aware of the potential that digitalisation offers to our construction projects. The use of a shared digital communication platform strengthens planning of the work on site. The communication platform is also a good tool for LEAN-planning, which the Agency generally wishes to promote. We are, therefore, continuously investigating this potential by using digital platforms and IT tools in our construction projects.

Conclusion

Our industry is rapidly changing and digital solutions already are inextricably connected to the construction process. The SBi report is emphatically supporting this claim, as it demonstrates that real-time project management software can bring a remarkable return of investment by unlocking total cost savings of up to 7%!

LetsBuilds’ efforts are now empirically acknowledged and that is an extra motivation for us to keep working harder in order to set new productivity standards for the construction industry.

The full report can be downloaded both in English and Danish here:

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