Construction costs are growing out of control - far beyond what building material costs, wage rates, or direct productivity warrant. Most of the excessive cost is unnecessary. This page Why Building Catalyst? describes the problem and solution.
You, like many owners, may rely on builders (CMs et al) to help set construction budgets and hold them to account in the face of high uncertainties and risks. Then you competitively bid their fee. Two significant problems result.
The first problem is that builders are, therefore, financially motivated to set the highest budget possible. They do so to reduce their risk and create a higher source of funds for indirect costs (general conditions and requirements, including staffing). Billable staffing hours can yield more profit for builders than their stated construction fee does. This has resulted in staffing growing two to three times more on many of today’s projects compared to when CM began.
The second problem is that builders have not found a way record and analyze historical cost based on the causes that determine outcomes. There are far too many variables in today’s projects to apply whole-project “comps” like those used in real estate. Without this capability, especially on more complex projects, builders are motivated to shape the highest budget possible.
These are the main reasons for construction cost growing out of control, even though building material and construction wage rates have not. .
Taking Control of Budgeting and Cost Management
Building CATALYST provides a powerful data processing system that takes into account dozens of critical causes (owner functions and attributes) that determine outcomes. With CATALYST you can know project outcomes, starting in the early planning process.But that's just the beginning.
CATALYST has been developed to help reverse the decades of accumulated waste in time and cost – and do so in a way that will benefit the owner, architect, and builder. It does so by providing more accurate, reliable, and impartial valuation of the building scope and cost. Accuracy, reliability, and especially impartiality is key to replacing cost-plus with value-added approach contracting. This applies to architects and builders.
You can think of CATALYST as construction’s first objective knowledge system. Objective knowledge is attained when predictions become true. On the strength of over 600 real-world projects in our database, Building CATALYST’s knowledge system enables you to take control of the budgeting and cost management process. This knowledge system is also essential to replacing the cost-plus approach to contracting with a value-added approach.
Building CATALSYT replaces today’s manual, one-off, Excel-based, planning, programing, budgeting, and cost management with integrated and automated processes. CATALYST creates the data system and platform enabling integration and automation throughout the design, procurement, and construction stages.
At first, most architects and builders will resist data-driven integration and automation. That’s OK. You can still control the budgeting, contracting, and cost management processes starting with simple steps – even on projects in the design or early construction stages. This enables you to eliminate the top levels of unnecessary costs.
There are designers and builders, however, that are intrinsically motivated toward measurable process and value improvement. All we need to do is to realign their organization’s financial motivation with their intrinsic motivation to improve, to drive out waste, and to apply advanced tools and processes.
The best thing you can do is seek out those designers and builders and encourage them to work with you to apply value-based contracting plus data-driven knowlege and process improvement platform.
Trying us out with no obligation
Do you have a project in planning or early design stages? If so, we will perform a comprehensive data analysis and present a menu of ideas - first to help avoid cost overruns, and then to reduce the cost and time it takes to deliver the project.
Do you have a project that already has a budget, design and/or builder’s estimate? If so, we’d be happy to provide a comprehensive analysis and comparison to the market. The analysis will identify the likely opportunity and problem areas, and how to optimize outcomes.
Would you like to test Building CATALYST predictability on a recent project? Great! We will record and perform analytics on that project through CATALYST and show you how and where it varies from market-wide data.
Our goal is to earn the right to work with you and your team to develop a win-win approach to stabilize and then optimize project outcomes.
If interested in discussing or scheduling a live demo, feel free to Contact us.