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Constructing a new house, building, or public infrastructure requires a well-structured plan to ensure a strong foundation. Each stage must be carefully drafted and executed, from costs to safety measures. But what if non-core processes block this effort?
Many enterprises seek business process outsourcing (BPO) solutions to address such a challenge in the construction sector. They employ service providers to streamline their tedious back-office functions. This practice also saves them significant costs while ensuring high-quality output.
Do you wonder how third-party companies do it? Keep reading to find out.
Ways BPO Providers Handle Construction Project Costs
Understanding what BPO’s role is in cost management within construction projects is crucial. Service providers have emerged as key partners for construction companies, providing specialized skills and modern technologies at affordable costs.
Moreover, third-party vendors implement practical strategies to optimize cost control and efficiency for the duration of the service-level agreement (SLA). Let us explore these approaches below.
Deliver Human Resources (HR)
Vendors allow businesses to access their workforce through hourly or monthly BPO pricing schemes. Depending on construction companies’ short-term or long-term needs, they can entrust the services below to third-party teams to reduce recruitment, training, and system maintenance fees.
- Project management
- Architectural design and engineering
- Quantity surveying and estimation
- Procurement and supply chain management
- Document management
- Health, safety, and environmental support
- Finance and accounting
- Technical support
- HR assistance
- Real estate marketing and customer service
- Legal and knowledge process outsourcing
- Facility maintenance and monitoring
- Land surveying, mapping, and evaluation
Note that outsourcing services give you significant labor cost savings. This is especially evident when hiring professionals from offshore countries such as the Philippines.
For instance, you will likely pay an average hourly wage of $32 if you hire an architect in the U.S. On the other hand, you only need to pay $3 an hour if you employ one from the Philippines.
Based on these figures, you can see up to a 90% cost reduction when outsourcing to an offshore provider. In particular, the Philippines remains a developing country; its cost of living and salaries are much lower than those of developed nations.
Optimize Modern Technology
Service providers equip clients with the advanced technology required for cost-effective building projects. These resources help speed up BPO processes in construction. Conducting a thorough construction feasibility study is crucial to ensuring that building projects are viable and cost-effective.
For instance, sensors powered by artificial intelligence (AI) sensors help identify equipment maintenance needs to address breakdowns. Meanwhile, automation solutions determine potential safety hazards and prevent accidents beforehand. These technologies illustrate the growing importance of artificial intelligence in construction, transforming how projects are managed and executed.
Here are other modern systems that third-party professionals use to deliver effective support:
- Advanced analytics and data integration tools
- Cost estimation software
- Market research tools
- Collaboration and communication platforms
- Automation routine tasks
- Digital documentation management systems
- Risk assessment and mitigation solutions
Perform Market Research
A BPO company conducts market research to help clients address construction project costs. Service providers aim to give client companies more precise insights into the construction industry’s economic dynamics and trends. Here is how they do it:
- Collect and analyze market data related to building initiatives.
- Identify potential cost-saving opportunities and procurement strategies.
- Monitor recent advancements in construction materials, technologies, and techniques.
- Recommend alternatives without compromising project quality.
- Study market fluctuations, regulatory changes, and emerging industry best practices.
- Predict potential cost escalations and implement associated preemptive measures.
Lead Project and Budget Planning
BPO providers are pivotal in overseeing construction projects and budget plans given their workforce and tech capabilities. This approach lets clients focus considerable funding, time, and effort on project execution.
Vendors also provide dedicated solutions to ensure precise project scheduling and budget planning. Such efficiency and accuracy minimize the risk of budget overruns. BPO vendors lead this function through the following procedures:
- Assess project scope, constraints, and objectives. Contractors work with clients to specify their goals, timelines, and budgetary limitations. This evaluation establishes the foundation for a well-structured cost management strategy.
- Collect and analyze historical project data, industry benchmarks, and trends. This information generates accurate cost estimates. The action also determines potential cost drivers and risks impacting the budget.
- Draft a comprehensive project budget using data analysis results. BPO providers help distribute funds to various project components, including materials, labor, equipment, and contingencies.
- Use advanced construction management software to simplify budgeting. This tech facilitates real-time tracking of project expenses and automatic cost adjustments. It also features an omnichannel platform for seamless communication between stakeholders.
- Evaluate potential risks that can result in budget overruns. Providers coordinate with clients to create risk mitigation strategies. These techniques include allocating contingency funds and developing protocols to address unforeseen challenges.
- Help screen and select reliable vendors, suppliers, and subcontractors. BPO companies ensure competitive pricing without compromising quality on construction projects.
Throughout the project’s lifecycle, vendors constantly analyze actual expenditures against the estimated costs. This cost analysis helps specify any fluctuations during the ongoing effort. The strategy enables timely corrective actions to keep the initiative on budget.
BPO Best Practices to Save Costs in Construction
Before experiencing cuts in your construction project costs, you must know what to do when acquiring BPO services. Understanding the best practices helps ensure you achieve cost savings and investment returns. Follow these steps to attain cost reduction with BPO:
- Clarify your BPO expectations and align them with your construction project goals.
- Select the right processes to outsource to balance your resources and tasks well.
- Choose a reliable BPO provider by assessing their track record and expertise.
- Ensure transparent pricing and payment terms in SLAs.
- Standardize workflows for improved efficiency and reduced errors.
- Integrate in-house tech with BPO systems to automate routine tasks.
- Align data and privacy security measures to avoid wasting $4.45 million due to a breach.
- Implement BPO performance metrics and monitoring.
- Review and audit processes regularly to determine areas for improvement.
- Develop joint strategies for addressing potential risks and challenges.
Most importantly, treat the BPO partnership as a long-term strategy rather than a short-term fix. As the working relationship matures, expect more synergies between your in-house and third-party teams, resulting in more cost savings.
The Bottom Line
Many businesses rely on outsourcing to cut their construction project management costs. Service vendors make cost reduction possible by providing necessary labor and tech resources at affordable fees. They also use their expertise to study the market and help plan a cost-effective budget.
But, of course, you must know the best practices when choosing a BPO partner. Understanding the strategies above helps ensure cost savings while maintaining quality outcomes. Remember to consider this deal a long-term strategy to experience more cost savings.
Let’s connect if you want to work with a BPO provider that matches your business capabilities and strengths. Unity Communications has a large talent pool capable of completing your non-core project management tasks quickly and effectively. The award-winning vendor provides easy access to experts and advanced solutions at competitive costs.
