Digital technology is eliminating problems across all business sectors and construction is no different.
From removing admin issues to scaling with automation, business technology is creating opportunities in ways that were once unimaginable.
The construction industry has been slower than others to adopt emerging technology and is still clinging to its analog roots. Many of the processes involved still happen on paper and if digital systems exist at all, they do so in silos.
Instead of taking advantage of how emerging technology and smart data are increasing productivity and gains in the sector, many are skeptical of the technical requirements and high upfront investment costs.
Despite this, the potential for technology to disrupt the industry is too advantageous in the long term to ignore.
The pandemic has only exacerbated the need for technology support, especially cloud technology to stay connected to business systems from anywhere at any time. In 2017, 85% of construction contractors responding to a survey collaboration between Sage and Associated General Contractors of America used or planned to use cloud technology.
Post pandemic, operating without cloud-connected communication channels will become more complex. Kristopher Lengieza, Senior Director of business development at Procore (a Sage Partner) says the industry is due for a revolution.
“As we look at how the industry has evolved over the last 20 years, we’ve come from a place of paper, pens, and color-coded files to keeping digital records. And now we’re exploring new ways for internet-connected devices to digitally capture information from the field. Ignoring this type of technology means we miss out on the insights to drive the metrics that move the industry forward.”
Construction business leaders are missing the critical benefits of a cloud-based solution because of misunderstandings about the cloud and hesitation about new ways of thinking and working. Perhaps it is the belief that every project is unique so embracing innovative technology is impractical.
This article aims to clarify those misconceptions in the hopes of moving the industry forward alongside evolving ways of doing business. We’ll highlight the advantages, explain the considerations, and offer next steps and best practices for implementation.
The pros: 5 advantages of cloud technology for construction companies
Data-driven insights are the building blocks that support the future of the industry. The more technology is used to collect data, the better the ability to make informed decisions. Here are the critical points in which better data leads to better productivity, business outcomes, and sustainability.
1. Data for better construction financial management
Data technology is changing the role of construction financial manager for the better.
“As computing has moved from analog to digital,” Sage Customer Experience Director Dennis Stejskal explains, “the construction financial manager goes from a financial historian to a financial visionary. Data technology removes the limits. Before, a construction financial manager could only tell you that a job was underbilled, for example, but not why. Next-generation technology tells us why and uses predictive analytics to point us in another direction.”
We are moving into a new era where artificial intelligence, machine learning, and high-performance computing are used to monitor transaction outliers. Systems can learn that for a particular cost code, an outlier can could trigger a warning and prevent costly discrepancies.
2. Future preparedness for innovation
Flexibility and agility are key for sustainability. In fact, the thriving in business corresponds to the ability to evolve. This is another factor that makes digitizing so important—service providers act as a partner to usher in the next generation of technology.
For example, a business management solution can have built-in integration capability that allows data communication across business lines. That provider then partners with other service providers to integrate even savvier technology into your business management solution. As Dennis advises: “Use your data and emerging technology to create a vision of the future of the business.”
3. Elevated mobility
Cloud-connected business management software helps to better communicate between project sites. Cloud can keep work sites in sync and support better collaboration for efficiency and productivity. Because it is so easily accessible from virtually any mobile device, cloud connectivity makes it easier to share documents and information from the field to the back office, such as accounting or HR data, all in real-time.
4. Centralized data source
Instead of toggling between data storage locations to get space construction projects often require, cloud technology enables you to save on the space and cost of local storage. Storing data on the cloud also supports scalability for growth and better data control.
5. Business continuity
As the COVID-19 pandemic has taught us, cloud connectivity is imperative for business continuity. Cloud-connected business management software means back-office tasks can continue without interruption from anywhere with internet access.
The obstacles: Why the construction industry is slow to digitize
As mentioned in the introduction of this guide, the construction industry has been slower than other sectors to adopt digital processes. We believe it is critical to dissect these reasons in advance to develop a formidable digitization strategy.
Lack of infrastructure support
The construction industry hasn’t been as eager to digitize in part because it lacks the infrastructure to do so naturally. Contracts, for example, don’t include incentives for innovation. Collecting data around performance management is inadequate with its limitations. Supply chains haven’t advanced and remain unsophisticated.
To do any of this, construction companies need to make massive technology upgrades in these areas that will require significant upfront costs. The industry has been hesitant to make the necessary financial commitment, even if the ROI is substantial.
Upfront costs are high because the technical challenges within the industry are an undertaking. Implementation across project sites for multiple sectors is not going to be easy. Scaling is another challenge, especially for smaller construction firms that usually function as subcontractors.
Migrating back-office data can be risky, considering how sensitive financial information is. That’s paired with the still general misunderstanding of how the cloud works, for example, how cloud-only allows access to priority information by those who should be privy to it.
Cloud technology to the rescue: Where digital solutions deliver
Despite the concerns and limitations, technology continues to disrupt the industry by helping to perform necessary tasks much more manageable and with fewer resources.
Design management. Geological surprises are a common cause for projects to delay and go over budget. New techniques that integrate high-definition photography, 3-D laser scanning, and geographic information systems, enabled by recent improvements in drone and unmanned-aerial-vehicle (UAV) technology, can offer high-definition surveying and improve accuracy and speed.
Project Accounting. Shows the true financial impact of past projects to assist in making smarter project bids.
Risk Management. Minimize liability in the field with subcontractor compliance tracking of lien waivers, certified reports, insurance certificates, and more.
Project Management. Reduce your organization’s risk and increase project profitability by quickly identifying potential issues before they become serious problems.
Payroll Management. Efficiently and accurately prepare payroll for your employees and comply with regulations.
Time and Expense Management. Capture all the time and expenses involved in projects, and keep people focused on business goals, not administrative tasks.
Document Management. Gain greater control of your documents and a clean audit trail which reduces your risk. Organize, store, and route all versions of drawings, RFIs, invoices, lease agreements, contracts, and more to keep your business moving.
The future and beyond: Where tech will take us next
Look for the ability to differentiate parameters and measure the progress of daily tasks using the Internet of Things and its devices as the next big thing in construction. Cloud adoption provides useful information and insights to enable project managers to reach high-performance for their project throughout the entire project lifecycle.
Connecting all of your resources at intervals of construction business is essential. Your devices must connect and move cleanly along with different systems, like inventory management package, within your infrastructure. In short, a better rate of the continual improvement cycle is feasible through IoT in construction industry.
As cloud computation evolves, its migration toward a Big Analytics concept is exciting. It brings with it a new level of services for construction companies that move forward with adoption. They will most benefit from the analytics created from data.
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