InEight (online), September 24, 2025
News Summary
Construction projects often start ‘awash in optimism,’ but unchecked optimism bias can undermine budgets and schedules. The article recommends treating optimism as a managed risk by validating assumptions with detailed, real-time data, reference-class forecasting, benchmarking and performance metrics like earned value. Accurate quantity management and linking estimates, budgets and schedules to short-interval planning improve forecast reliability. Tracking change orders, RFIs, contract deliverables, timesheets and payments supports realistic assessments. Software platforms that centralize historical and as-built data enable better comparisons and timely adjustments. Bottom line: back optimism with data to protect outcomes and improve project performance.
Bias busting for construction project excellence
How optimism can hurt budgets and timelines — and what to do about it
Estimated read time: 4 min read
Byline: By InEight | Date: 09/23/25
Categories: Infrastructure, Construction
Image credit: Vilkasss/Pixabay
Lead — the immediate takeaway
Construction projects commonly launch awash in optimism. That upbeat start often helps teams move quickly, but unchecked optimism can become a project’s undoing when it becomes a source of unconsciously biased decisions — optimism bias — that undermine budgets and schedules. The clearest route out of that trap is simple: mix optimism with realism and measurable information.
Key controls at the top
Contractors are selected with care, roles are assigned, and goals are clear and incentivized. Yet research shows project leaders are largely unaware of the potential negative impact optimism bias on project budgets and deadlines. Optimists tend to be driven, cool under pressure and resilient — traits that are excellent for project leads — but even those strengths do not remove blind spots. Common optimism‑bias blind spots include potential labor disputes, site‑specific challenges, and regulatory complications.
The article is not advocating managing projects by pessimists. Biases of any kind can be problematic, especially when unacknowledged. The types of biases most likely to affect projects are organizational, leadership, group and human biases. It is impossible to entirely remove bias, but the first step to mitigate bias is raising awareness of the bias, followed by challenging the bias.
Practical approach: check optimism against measurable information
The easiest way to manage project bias is to check it against measurable information. If optimistic budget assumptions are proven by the numbers, then data‑supported optimism may be warranted. If optimistic assumptions are not supported by data, there may still be time to adjust the budget. Framing the problem this way turns the exercise into risk management rather than an attempt to change personality.
Why data matters
The best construction insights are data‑driven. Shared, real‑time data forms the foundation for trusted performance monitoring. Diverse project stakeholders are more likely to make decisions based on insights when they have a data platform. The most relevant data for supporting or correcting optimism ties directly to either the project schedule or budget. Detail and accuracy are necessary counterparts to the potential distortion of unwarranted optimism.
Starting with highly detailed data results in more accurate analysis, forecasting and progress tracking. Accuracy starts with project setup and data collection practices. As one industry leader put it, fundamentally, if your quantities in scope are wrong, your forecast is inherently going to be wrong as well. That organization standardizes processes around controlled management of pure quantities, ensuring they are entered into the system at the right time and that everything else is a by‑product of quantity management.
Forecasting and performance controls
Reference class forecasting is identified as a useful control mechanism. It involves comparing historical, similar project data with current project data to make forecasting and scheduling more accurate and to help if budgets or schedules must shift. Software systems that include benchmarking, quick access to historical and as‑built data and native support for sophisticated work demands can help manage optimism bias.
Advanced performance management practices that support realistic project assessments include earned value management and schedule performance index. Another industry practitioner observed that about 75 to 80% of the effort of forecasting really happens in the system, and then based on project knowledge, the team tweaks and fine‑tunes by applying context. For example, if the remaining work is more complex than previous projects, that team will further scrutinize the previous forecast.
Data items to track
The right data makes for great project outcomes. Helpful items to track when addressing optimism bias include change orders, RFIs (requests for information), contract deliverables, and quantity claims. Budgetary items to track include timesheets, payments and billings. A thorough assessment of data needs should be followed by a clear‑eyed look at what it takes to collect accurate and detailed information.
Another project leader advised that you have to find ways to connect your estimate, your budget, and your schedule to your short interval planning and controls effort, so construction teams can focus on the work they must be doing and not evolve into things they like to do. He also advised to collect your data as close as possible to the workplace, because that’s where the work gets done.
Downstream benefits and closing point
Excellent data sets serve multiple downstream use cases, including integrated forecasting, ERT scheduling, managing contract life cycles, estimating financial impacts and collaborating among stakeholders. Optimism may be warranted, but it never hurts to back it up with a quick check on the data.
Additional page notes
Hashtags shown at the end of the article: #budget #construction #data #forecast #optimism bias #project management #schedule #timeline
Commercial and organizational information
Construction By InEight
InEight is described as a leader in construction project controls software. InEight claims to empower over 850 companies taking on challenging projects in industries including construction and engineering; transportation infrastructure; mining; water; power and renewables; and oil, gas and chemical. InEight claims its software is uniquely suited to capital construction and other complex work. InEight claims its integrated, modular software manages projects worth over $1 trillion globally. InEight claims its software takes control of project information management, costs, schedules, contracts, and construction operations, and delivers insights with advanced analytics and AI. InEight claims its solutions adapt and scale to meet the dynamic needs of modern construction, driving operational excellence and successful project outcomes.
For more information, follow InEight on LinkedIn or visit InEight.com.
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FAQ
What is optimism bias in construction projects?
Optimism bias occurs when teams make unconsciously biased decisions that undermine budgets and schedules. Construction projects commonly launch awash in optimism, and when that optimism becomes a source of unconsciously biased decisions it can become a project’s undoing.
How should teams respond to optimism bias?
The first step to mitigate bias is raising awareness of the bias. The second step is challenging the bias. The easiest way to manage project bias is to check it against measurable information. If optimistic budget assumptions are proven by the numbers, then data‑supported optimism may be warranted. If optimistic assumptions are not supported by data, there may still be time to adjust the budget.
What data and practices help reduce optimism bias?
Shared, real‑time data forms the foundation for trusted performance monitoring. Reference class forecasting involves comparing historical, similar project data with current project data to make forecasting and scheduling more accurate and to help if budgets or schedules must shift. Advanced performance management practices that support realistic project assessments include earned value management and schedule performance index.
Which items should project teams track to address optimism bias?
Helpful items to track include change orders, RFIs (requests for information), contract deliverables, quantity claims, timesheets, payments and billings.
Any closing practical advice?
Optimism may be warranted, but it never hurts to back it up with a quick check on the data.
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Key features at a glance
| Feature | Why it helps |
|---|---|
| Shared, real‑time data | Forms the foundation for trusted performance monitoring and helps stakeholders make decisions based on insights. |
| Reference class forecasting | Compares historical, similar project data with current project data to improve forecasting and scheduling. |
| Performance metrics | Tools like earned value management and schedule performance index support realistic project assessments. |
| Detailed data collection | Starting with detailed data leads to more accurate analysis, forecasting and progress tracking. |
| Tracked items | Change orders, RFIs, contract deliverables, quantity claims, timesheets, payments and billings all help expose optimism bias. |
| Short interval planning connection | Connecting estimate, budget and schedule to short interval planning keeps teams focused on required work and on collecting data near the workplace. |
End of article.
Deeper Dive: News & Info About This Topic
Additional Resources
- InEight Blog
- Wikipedia: Optimism bias
- Engineering News-Record (ENR)
- Google Search: reference class forecasting construction
- Construction Dive
- Google Scholar: earned value management construction
- American Society of Civil Engineers (ASCE)
- Encyclopedia Britannica: forecasting
- McKinsey — Capital Projects & Infrastructure
- Google News: construction project data optimism bias
Author: Construction CA News
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