Our Spotlight stock, Textura Corporation (TXTR)—a company that is using cloud-based technology to make project management more cost-effective and efficient—reminded me of my experiences in building a couple of homes over the years. While I ended up with some very nice homes, despite the best intentions—and a lot of hard work on the part of designers, contractors, subcontractors and yours truly—they all took longer than originally expected to build, and cost a lot more than I anticipated.
Now if you multiply that example by the thousands upon thousands of construction projects around the world, you can only imagine the money that is wasted by cost and time overruns. Some of the most notable construction cost overruns include: 2015: Four VA hospital projects in Aurora, Colorado, Orlando, Florida, New Orleans and Las Vegas, whose collective $2 billion in cost overruns are 66% to 487% over budget, delaying their openings by 14 to 86 months. 2014: Cost overruns doubled the bill for the construction of the World Trade Center PATH station in New York City from $2 billion to $4 billion, and pushed the opening to one year later than originally estimated. 2007: Boston’s Big Dig, rerouting I-93 to an underground tunnel through the city, was the most expensive highway project in the U.S. The project cost $14.6 billion, more than two and a half times its estimate, and took nine years longer than forecast to complete. 1994: The Channel Tunnel (Chunnel), connecting England and France was 19 months late and scored a cost overrun of U.S.$3 billion, 80% over budget. As I was researching this article, I found at least five academic studies concerning construction cost—and time—overruns. The Harvard Business Review analyzed 1,471 projects and found that, on average, costs were 27% higher than budgeted, but almost 17% saw cost overruns of 200% and went past the completion date about 70% of the time. A much larger study from PricewaterhouseCoopers involving 200 companies in 30 countries and 10,640 projects reported that a mere 2.5% of the participants successfully completed 100% of their projects. Bottom line, construction projects are often a cesspool of time and money wasted. And that’s why project management is so crucial. Because there are so many companies, people and government regulations involved in a typical project, management is not a simple task. And with the global construction market estimated to be $5.7 trillion in 2014, according to Insider Monkey, the money and time lost in poor project management is astronomical. Consequently, construction companies are turning more and more to outside professional managers—such as Textura—to help them manage their construction projects. Textura is a jack-of-all-trades in project management with services that include: • Estimating the job • Invoicing and payment • Preparation and tracking bids • Claims management • Field management • Green initiatives • Project communication • Integration with other software applications • Subcontractor early payment This chart from the company’s website, gives an overall summation of the company’s products and services. 
Textura’s customers include owners/developers, general contractors, subcontractors, architects, material suppliers and others. Textura says its solutions “have been used by more than 8,000 general contractors, owners/developers and architects, and approximately 500,000 subcontractors. Construction industry companies have used one or more Textura solutions to help manage over 25,000 commercial projects representing more than $270 billion in construction value.” And Textura seems to be at the right place at the right time—operating in two booming industries. The global cloud computing business is about $121 billion, and growing exponentially. And as Tyler Laundon and Ian Wyatt of Game Changers say in their analysis of Textura, the construction industry is in recovery mode, and is expected to pass the $1 trillion mark in the U.S. alone this year. And with profits around the corner, now might be the time to add this one to your portfolio.
