Project management is a complex, multifaceted activity encompassing both core and auxiliary processes. Effective project operation requires not only the management of materials and personnel, but also extensive planning, tracking of progress, handling materials, and maintaining records. Although these tasks may not demand advanced technical expertise, they are equally tedious and crucial.
Despite some current issues within the system, it is undeniable that the development of the Shang’an Project Management System has successfully implemented its initial vision and now possesses the capability to efficiently manage project costs. During the trial phase, we aim to resolve existing problems, enhance system usability and stability, and accelerate the full implementation of the system. This will ultimately raise our company’s overall project management standards.
To improve project management and cost control capabilities, our company partnered with PKPM—a software company under the China Academy of Building Research—to develop a project management system for Shanghai Installation Engineering Co., Ltd. in August 2003. The system has now entered the pilot stage within the project team.
1. The Importance of Project Management Informatization
1.1 Cost Control: The Core of Project Management Informatization
Cost control stands as the greatest challenge and primary concern for companies and project departments when it comes to project management informatization. Material costs represent approximately 80% of the total project expenditure, making effective material management pivotal for project financial operations.
For instance, in preparing construction task books, many projects forego manual settlement and instead use “material requisition” as a proxy for labor settlement, later recreating task books based on these settlements. This “consumption-led” approach has long plagued project management, often reversing the intended management process from proactive control to retrospective summary.
Developing project management information software is fundamentally about cost control, focusing on several key aspects:
- Organizing continuous, balanced, and rhythmic construction, optimizing resource use, shortening timelines, and reducing costs.
- Strengthening quality management to control quality-related expenses. Quality costs refer to all expenditures incurred to ensure and enhance product quality, and reducing them significantly improves cost control.
- Managing direct engineering costs, including materials, labor, and machinery.
- Timely organization of project data not only reduces data processing time at project completion but also enables prompt claims during disputes, further minimizing costs.
1.2 Challenges in Project Management
In practice, it is common to encounter projects that commence construction while drawings are still incomplete. To avoid delays, materials and labor are mobilized and work begins without a proper budget. Some projects may even lack complete drawings midway through construction, leading to unpredictable losses.
While numerous systems and management strategies have been developed to control project costs, rigid regulations often fail to be effectively implemented. Without employee-driven execution, a mature and systematic project management information tool is necessary to enforce these procedures via computerization, ensuring transparency, standardization, and scientific management to achieve effective cost control.
1.3 Enhancing Employee Management Skills and Standardizing Construction Systems
Many project managers notice a lack of job awareness among project department employees, stemming from various factors—such as unfamiliarity with project progress. This results in staff uncertainty regarding their immediate responsibilities, increasing the manager’s workload and causing the owner to perceive the construction process as chaotic.
Project management informatization standardizes various project subcomponents through software, clearly communicating required tasks to implementation personnel. The goal is to establish a unified management model for the company, while allowing for diverse management methods—a reflection of corporate culture during construction.
Once project management is fully computerized, employees can clearly define their current tasks and objectives through supportive tools. When everyone understands their responsibilities, managers can dedicate more time to other matters, reducing costs, improving efficiency, and establishing a standardized managerial image.
Projects are the fundamental business units of construction enterprises, organizing resources around individual project requirements to achieve objectives in duration, quality, safety, and cost. The informatization of project management is a process of decomposition and integration, with the project itself serving as the central organizational unit. This approach prevents resource idleness and waste, enabling the principle of “doing the most with the least people.”
2. Project Management Information System Software
2.1 Design and Development Concept
We have established dedicated work modules for each task, providing detailed data and various forms. Large volumes of documents and tables are integrated into clear, concise modules.
The main focus in developing the project management information system is to create software that can effectively control project costs and regulate personnel behavior. The solution centers on budget management: first, clarifying the duties and authorities of project personnel; then, each worker completes their own sub-budget, which forms the main budget. The main budget becomes the foundation for project initiation and system operations. The system enforces mandatory budgeting (each project must have a budget to proceed), ensuring costs do not exceed budget limits.
Budget changes can be managed via various forms, with strict conditions and data exchanges documenting every cost change. These can be quickly queried and analyzed through the “Cost Management” module. Even without complete drawings, material and labor costs are clearly managed, ensuring every expense is accounted for.
Once the main budget is finalized, all subsequent material requisitions are directly matched against it, with clear records for every material receipt and usage. The system strictly limits the relationship between requisition, budget, and planning, preventing overspending and wasteful requisitions.
Given the frequent changes in project plans, we have designed a component called the Construction Task Change Order. This allows for flexible adjustments to budgets and plans, ensuring smooth material requisition and labor deployment after on-site changes, with all related information properly recorded.
Unified login and authentication within the system standardizes personnel work and clarifies job responsibilities. The overall project management process is broken down into several modules, each assigned to specific leaders by the administrator.
2.2 Software Structure and Workflow
The Shang’an Project Management Information System is based on a Client/Server (C/S) architecture. It operates as an independent project unit, requiring only a host computer to function, with no limit on the number of client users. Personnel can access the system from any computer.
After installation, project personnel and their permissions are configured, determining their roles and access to forms and documents. Permissions are assigned through a two-tier system: first, overall management is given to project managers; second, detailed tasks are allocated to various personnel, such as key project members. This flexible allocation adapts to actual project needs.
The system consists of 10 primary functional modules: cost management, contract management, labor management, plan management, material management, engineering data management, construction budget, schedule planning, safety management, quality management, and statistical analysis. Of these, contract management, labor management, planning management, material management, and construction budget form the main workflow, supported by five auxiliary modules.
2.2.1 Main Workflow Process
- Basic Information and Data Entry: Administrators establish project personnel and assign permissions. Contracting and subcontracting relationships are set in “Contract Management.” A total construction budget is generated or imported, and unit project and sub-item registration forms are created in “Plan Management,” establishing relationships between subcontractors and sub-items. Preparations before project commencement are thus completed within the system.
- Supplier Management: After basic information and budget entry, suppliers and subcontractors are identified. The qualified supplier list is formatted and imported via ‘Basic Information Maintenance.’ Approved suppliers are added for project selection and cooperation. Temporary suppliers can be included after approval using the “One-Time Qualified Supplier Approval Form.”
- Material Requirements and Procurement: Once the project starts, material management and control are handled through the system. Sub-items are selected in the monthly material demand plan, generating plans based on budget data. Summary tables for Party A/Party B are created for procurement planning. The system ensures procurement rationality and prevents unclear budgeting and repetitive budget adjustments.
- Standardized receipt and issuance of materials are key objectives. All transactions are recorded in real-time, with strict controls on material use. Materials must be included in the budget or classified via “Basic Information Maintenance.” Acceptance forms are filled by both parties, with inventory quantities updated accordingly. Over-budget requisitions are blocked unless specially reviewed, strictly controlling material quantities.
- Material management personnel are responsible for their assigned permissions. Construction workers submit requisition forms based on project needs, and the system tracks all transactions. Project managers can easily identify and address issues, while material handlers gain a clear understanding of inventory and usage. Construction workers are required to plan ahead, improving work quality and identifying areas for improvement. The system supports a cycle of problem discovery, cause analysis, and error correction.
- Construction Task Book: As a core project management document, the construction task book tracks the construction plan and completion status. Before generating it, completed subcontracting contracts, application forms, and team information must be entered. Instead of manual entry, the system allows workers to select relevant sub-items and team details, automatically generating task books from budgets and plans, preventing errors and omissions. After construction, actual quantities can be recorded and submitted, updating budgets and inventory accordingly.
2.2.2 Auxiliary Workflow
The above processes constitute the main management workflow, interlinking contract, labor, planning, material, engineering data, and budget management—these are the most vital and frequently used components, forming the backbone of cost control.
2.3 Pilot Implementation of Project Management Informatization
Due to limited prior experience, pilot runs were conducted in several project departments, such as Sakura Resort, before official software deployment. These trials tested system usability, identified, and resolved issues. Based on feedback, adjustments were made to system usability, including simplifying complex operations and maintaining core features. A construction task change form was added, system compatibility was improved, and the database was refined to meet project management needs.
In summary, project management informatization typically adopts a matrix organizational structure, enabling dynamic management and comprehensive optimization of project goals. The organizational configuration can be flexibly adjusted according to the needs of each project stage, ensuring efficient and economical operation.
The Shang’an Project Management Information System is a comprehensive solution based on budget management, integrating computer technology with traditional management systems. It effectively controls costs and streamlines project operations. Through this system, managers and companies gain clear insights into project cost dynamics, enabling data-driven decisions. Clear personnel responsibilities support effective supervision and strengthen all aspects of management. A skilled project team can meet most project requirements and provide precise data, significantly improving efficiency and cost control—achieving the ultimate goal of construction project management informatization: “doing the most with the least money.”
Source: Tsinghua Leadership
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