Routes to Margin Plans and Margin Improvement Strategy Planning
Building Sustainable Profitability in Construction and Infrastructure Projects
In today’s construction and infrastructure environment, project margins are under more pressure than ever. Escalating material costs, tighter programmes, increased client scrutiny and complex supply chain structures can all impact profitability. Yet, for those who plan effectively, there remain clear routes to protecting and improving margins not just at project level, but across business units and entire organisations.
At Oak Management Service Ltd, we bring over three decades of Tier 1 contractor and consultancy experience to help clients, consultants, contractors and SMEs create robust, achievable and measurable margin plans.
1. Understanding the Margin Landscape
Margin planning begins with understanding where value is created and where it leaks. In construction, margins can be eroded at every stage of a project lifecycle if not managed correctly. Typical challenges include:
- Underestimation at tender stage
- Poor risk allocation or unbalanced contract terms
- Inefficient change management
- Weak cost control and reporting structures
- Late recognition of commercial opportunities
At Oak Management Services, our first step is always diagnostic, identifying where commercial processes and data may not be aligned with business objectives.
2. Developing a Margin Improvement Strategy
A margin improvement strategy should be both strategic and operational, embedding commercial discipline into every phase of a project. Our approach focuses on five key routes:
a) Data-Driven Commercial Forecasting
Margins can only be improved if they are measured and monitored in real time. This means building robust cost value reconciliation (CVR) systems and commercial dashboards that enable proactive decision-making rather than reactive reporting.
b) Contract and Risk Alignment
Early engagement with contract forms (NEC, JCT, bespoke) allows businesses to align risk with capability. Our experience across multiple sectors and contract suites enables us to identify opportunities for risk mitigation before contracts are signed.
c) Change and Value Management
Change is inevitable; loss of control is not. We help teams strengthen change control mechanisms, ensuring that variations are captured, evidenced, and agreed in a way that protects margin integrity.
d) Supply Chain Collaboration
Margins are not just internal. SMEs and subcontractors play a vital role in the success of any project. A clear margin strategy involves transparent communication, fair payment structures and shared understanding of project objectives.
e) Capability and Training
Commercial excellence is driven by people. We provide training and mentoring for commercial teams, from graduates to directors, ensuring that the knowledge and behaviours required to protect and enhance margin are embedded across the organisation.
3. From Margin Plan to Business Plan
A margin improvement plan should not exist in isolation. It should form part of a wider business management strategy, linking commercial objectives with resource planning, supply chain management and client engagement.
At OMS, we often work with clients to:
- Integrate margin plans into annual business planning cycles
- Support commercial leaders with forecasting tools and performance KPIs
- Facilitate workshops to build margin awareness among project teams
- Benchmark margin performance across sectors or regions
4. Continuous Improvement and Governance
Margin improvement is not a one-off initiative, it’s a culture. Through structured governance, regular review points, and ongoing commercial mentoring, businesses can evolve from reactive margin recovery to proactive margin leadership.
With the right frameworks, teams can shift focus from “how much did we make?” to “how did we make it, and how can we make it better next time?”
Partnering with Oak Management Service Ltd
Whether you are a contractor seeking to stabilise project profitability, a consultant refining commercial processes, or an SME supply chain member looking to strengthen financial resilience, Oak Management Service Ltd provides the expertise, systems, and strategic insight to help you succeed.
With over 33 years’ experience across Tier 1 main contractors and multiple sectors, from highways and aviation to commercial fit-outs and government works, our Principal Consultant Director, Matthew Bines, is equipped to guide clients at every level, from tendering and project delivery to business strategy and training.
Let’s Build Your Route to Margin Improvement
Contact us to discuss how a structured margin improvement strategy can strengthen your commercial performance and deliver sustainable profitability across your projects.
📞 07973 269802
📧 info@oakms.co.uk
🌐 www.oakms.co.uk