OnSiteIQ wants its customers to know that utilizing the strengths of their photo and video documentation technology can have a massive return on investment when used to its fullest extent.
OnSiteIQ has developed an internal return on investment calculator that helps us project what the total savings of a project might be if an owner or developer can utilize the features in a way that keeps them engaged in a project, and monitoring its progress daily.
In this article, we will explain how OnSiteIQ can hypothetically save its owners an ROI on their construction projects that should lead to a whole new way of thinking about profitability in construction.
Proactively Using OnSiteIQ
It’s important to remember that the best implementation of OnSiteIQ’s platform is by using it proactively and collaboratively as a team. Making OnSiteIQ’s dashboard and the data it provides a staple of the weekly OAC meeting allows progress to be assessed together.
This way, even if the owner, architect, and contractor are working remotely there is a full collaboration between these three parties working towards saving money and time in the schedule. This is a credential for assessing the value of OnSiteIQ, and we believe there is a direct relationship between utilizing the OnsiteIQ technology to its fullest extent, and the savings it can provide.
Return on Investment Calculator
Let us assume that a 120,000 square foot hotel construction project has been assigned a construction value of $50M. At 20 months estimated for the duration of the project, these will be the baseline statistics for how OnSiteIQ can assess projected savings with its photo and video construction documentation technology.
Carry costs, loss of revenue and extended general conditions alone can mount to $400K to $500K based on a project delayed by one month. Use OnsiteIQ to be more effective with project communication and collaboration between the general contractor and project team. The ultimate goal for this is to save unwanted and unnecessary delays.
Autodesk recently reported that:
70% of projects are typically late, generally by about 1-3 months.
A typical owner will put 25% equity in a building, and source a 75% loan.
If we were to use the same example listed above, in which we were able to save 30 days off the projected timeline in this example, we would have saved this project almost $500K.
Inaccurate Change Orders
Life moves very fast in construction. With OnSiteIQ, having the data and the level of detail available in the photo and video documentation allows owners to enjoy creating fewer change orders. Another way to think about the value of OnSiteIQ is it can make owners feel more comfortable that the extent of a 5% contingency will never be used. This is because OnSiteIQ can prevent the number of change orders which has established the industry standard of 5%. Fewer change orders equal a lessened need to eat into the contingency.
Furthermore, through no fault of the subcontractor or contractor, it takes time for paperwork and backup documentation to be pulled together. It’s unlikely that anyone is going to remember an incident that happened in a particular location three months ago. Therefore, OnsiteIQ can prevent and save hundreds of change orders by allowing owners and developers to go back in time and validate what was installed, and when.
Preventing Rework in the Post-Construction Phase
OnSiteIQ’s technology can be a valuable tool in preventing rework because of its ability to prevent issues before they happen. For every percent of rework that you’re able to prove was the fault of the contractor is that much more profit put back into the bottom line. Imagine saving 10% of rework on a $50M project that could amount to $50K – $100K in saved time and cost on rework items.
It is a well-known fact that frequent travel is required between an owner and their job site. Between airlines, rental cars, and lodging let’s estimate $2,000 per trip. This may fluctuate based on the travel needs of any given owner.
Regardless of the total cost of travel, OnSiteIQ can help reduce the total amount of trips required by providing a remote source that can allow owners to stay properly engaged in the project without having to travel to the site with as much frequency.
This doesn’t factor in the costs of time spent traveled, which in and of itself presents additional savings.
Disputes (Delays/Liquidated Damages)
Disputes, both for defects and delays can be contentious and time-consuming. When a project is late the owner often receives the financial burden of offsetting the labor costs incurred by a project being delayed. These mount up very quickly and can run into hundreds of thousands of dollars. Typically these costs are negotiated in a final settlement between the owner and the contractor, but why not try and mitigate these costs before they are an issue?
Summary and Total Savings
Hypothetically as an example, and one that assumes an owner used OnSiteIQ to the fullest extent and shares the platform with the project team, we can help save 1% to 2% of costs (and time).
The key takeaway here is that OnSiteIQ’s core value is helping save time on the schedule, preventing the need for rework, and driving down the total costs of disputes. When you consider how this might affect the bottom line, the potential for savings is enormous.
With OnSiteIQ’s competitive costs and ease of implementation, owners should see OnSiteIQ as a solution for saving them thousands, if not hundreds of thousands of dollars on each of their construction projects if they can commit to using the technology to its fullest extent.
If you’d like to receive a custom estimate on how much OnSiteIQ can save you, contact us. Or, if you’d like to request a demo, we would be happy to show you the capabilities of OnSiteIQ and how it leads to faster, safer, and more cost-effective construction projects.