Last week I had the pleasure to speak at a webcast hosted by Building Design + Construction on “How to turn IT investments into real business results.” This is a timely topic. With many construction firms seeing healthy revenue growth, investing in more technology is one of the top three actions contractors plan to take in 2015.* Still IT spending by the construction industry as a whole is the lowest (1% or less of revenue) across 19 major industries, according to Gartner’s 2014 “IT key metrics data.”
What is your IT investment? Are your systems a collection of nuts and bolts? Or do you have an IT strategy? Lack of an IT strategy can lead to impulse buying and disjointed systems that don’t work well together. On the other hand, a solid IT plan will help drive your business forward. Here are few things to consider:
- Treat IT like other parts of your business. Make sure your IT objectives are directly tied to your business issues and goals. A good IT investment will help you increase revenue, reduce cost, or mitigate risk.
- Start your IT strategy with an audit. Look at your current processes and identify your IT strengths, weaknesses, opportunities, and threats. What is your current spend and are you happy with your return on investment? What are your peers doing? But only follow their lead if it supports your corporate and IT objectives.
- Finish with a plan. The end-result of your audit should be an IT plan that identifies new technology to apply, areas for improvement, process and policy recommendations, timelines, and budget. Watch out for items often missing in IT plans such as tolerance for downtime, security, and network bandwidth.
- Measure to determine your IT success. Pinpoint the key things you want to accomplish with your IT strategy and establish metrics you can measure against. For example, if you set up a project site to assure team members always have the latest drawings and addendums, you can track the number of downloads by subcontractors. This is one way to measure how well you are mitigating project risk.
As construction companies compete with other industries or other contractors for the next generation of workers, your IT capabilities become even more important. Many construction leaders realize that recruiting the next generation of workers is critical to sustaining growth in the industry. College graduates expect to work with more sophisticated collaboration tools. It will be hard for you to compete in the future if you don’t take this into consideration.
*2015 Sage construction technology survey