A changing climate for construction

With HS2, Hinkley Point and even a bridge between Scotland and Northern Ireland regularly making the front pages, it’s clear that government spending on infrastructure seems set to rise.

This increased central investment is bound to bring about changes to the existing operating climate for construction and engineering firms.

Planning ahead

Firms in the running for any of the work around these large, government-backed projects will all need a working capital structure that can cope with the long-term outlook required for the scale of these schemes. Many companies will have been struggling with their planning during the uncertainty of the last few years.

It isn’t just the largest firms which are impacted though, the work and repercussions will trickle top-down through the industry. All of the smaller sub-contractors who will be relied on to deliver elements of the projects will now be starting to look to plan beyond the short-term as the future becomes a little clearer and more assured for them.

It is here that a system such as IBM® Planning Analytics can deliver rapid results. SMEs may consider enterprise solutions beyond their operating level, but, as we have shown before, you are never too small for Planning Analytics.

Particularly when working as part of a larger chain of companies delivering for a project, the more parties involved who are planning using a dynamic tool, the more agile the entire group is and the smoother the process becomes.

Capital and cash management

Poor capital control can cause businesses to overtrade and push them over the edge. Implementing a solution like IBM® Planning Analytics spreads the capability for planning and capital control throughout the business. The ability to perform agile ‘what if’ scenario testing based on changing assumptions from evolving industry knowledge gives valuable insight to future liquidity.

The flexibility of the system allows users to perform complex cost allocations and profitability analysis; a granular view is possible across all chosen metrics – product, customer, region, sales channel to name but a few.

We’ve talked before about how undertaking regular CVR processes can provide early warnings of potential cash flow issues before they have the chance to impact upon the company’s operations. Problem contracts are also highlighted and with adequate warning, measures can be put in place to steer these back on track before they have a negative bearing on the business.

This will also feed in to your cash flow projection, a crucial driver for forecasting. Even the most demanding, large-scale construction models can be rendered simple by Planning Analytics. Receivables, inventory and creditors are easily incorporated into the large, historical and future-oriented data sets managed within the system. Multidimensional analysis and complex calculations which would have been virtually impossible to manage through spreadsheets alone are made straightforward and accessible for users across the system.

Make the most of it

Planning Analytics enables sites and project users to create timely and reliable plans, budgets and forecasts within a fully customisable analytics workspace. Scorecards and dashboards are easily created for monitoring KPIs and all of this functionality is accessible both on-site and via the cloud.

Government policy is never guaranteed, but the current climate certainly suggests a period of improvement for the construction and engineering sectors. Make sure your business is in a position to fully capitalise on this uplift by getting all of your planning and analysis working to the highest level. Get in touch today to hear more about how we can help you get there.