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Contractors increase use of IT to achieve business goals, address challenges

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This year, Sage once again participated with the Associated General Contractors (AGC) of America to release the 2017 Construction Hiring and Business Outlook. The annual survey takes a look at the hiring practices, market trends, and information technology usage in today’s construction industry. Nearly 1,300 construction companies, representing a broad range of firms, participated in this year’s Outlook survey.

It is clear from the Outlook’s results that two main concerns weighing on contractors’ minds are finding qualified workers and increased competition for projects. These are areas where IT can be strategically applied to do more with current staff and win more work. So, it’s not surprising that a growing number of contractors are looking at IT more seriously as a way to achieve these and other business goals. According to this year’s Outlook, 47 percent of contractors indicate they currently have a formal IT plan that supports business objectives, up from 42 percent last year. An additional seven percent of contractors plan to create a formal IT plan in 2017.

There is also indication that contractors are spending more in order to fund their IT plans. Thirty-five percent of contractors say they currently spend one percent or more of revenue on IT. In addition, 40 percent of contractors report they will increase IT investment in 2017. But even with these increases, the construction industry still spends less on IT than other major industries.

That’s a bit about IT planning and spending among today’s contractors. Now let’s look at how they are leveraging their IT spend.

Access to information drives cloud adoption

Just five years ago, in a separate 2012 Sage survey, only 16 percent of contractors felt that cloud computing was important for their businesses. This year’s Outlook tells a different story. Over the past several years, the need for improved communication and decision making on the job site has escalated the use of cloud-based mobile construction apps. This year’s report confirms that cloud computing is now mainstream within the construction industry, with 85 percent of respondents indicating that they currently use or plan to use cloud-based software. The ability to access information from anywhere and at any time is the number one reason firms say they are adopting cloud-based solutions.

Collaboration moves beyond email

Project collaboration is another fast-growing category for cloud-based software adoption. While email (at 91 percent) and file sharing sites (at 76 percent) are still the predominant tools used, online project collaboration software is gaining a foothold. Forty-nine percent of survey respondents are now using online project collaboration software to keep the building team in sync and improve a project’s financial and quality outcome (up from 40 percent, a gain of nine percentage points over last year). We see the adoption of more sophisticated, cloud-based collaborative tools continuing as project owners and general contractors expect greater collaboration among the building team to reduce errors and improve project efficiency.

Contractors pull out all stops to win work

Increased competition for jobs (listed among the three biggest concerns of Outlook survey recipients) appears to be driving the use of a variety of software tools aimed at obtaining work. Estimating and bidding software, used by 69 percent of survey respondents, continues to be the number one software contractors use to compete for jobs. But we are also seeing an increase in nontraditional tools such as social media. Forty-three percent of firms say they now use social media to support their marketing efforts (up 11 percentage points from last year). Contractors are also using IT tools to help them stay in contact with their customers, including client relationship software (at 25 percent), marketing and business development software (at 23 percent) and sales software (at 11 percent).

Data security becomes a priority

As construction firms continue to actively use newer mobile and cloud-based technology, there appears to be a growing awareness of the security threats they could face due to a lost device or hacking. Seventy-seven percent of contractors said they currently have an overall IT security plan in place and 54 percent have a mobile security policy (up from 46 percent last year). While many providers of cloud-based technology take extensive measures to protect their customers—such as thorough security testing, independent security audits, and regular updates to the latest operating systems—it’s also important for contractors to understand how to protect themselves in this relatively new computing environment.  We expect to see more contractors making IT security part of their risk management efforts in the future.

Looking ahead

So, all in all, we see contractors applying information technology to all aspects of their business as a way to improve productivity and maintain a competitive edge–all done with an increasing focus on security. I believe we will continue to see this trend as contractors more seriously consider technology as a way to meet current business challenges and deliver higher quality projects.

Download the complete 2017 Construction Hiring and Business Outlook for more information.

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