“Always stays the same, nothing ever changes” — sang a popular indie-rock band Placebo back in 2003. Could they imagine that these words will accurately describe what’s going on with the digital transformation of the construction industry in 2022?
The matter is that the construction industry does really lag behind adoption of tech solutions. Only 23% of construction companies rely on digital data, while 90% of the collected data is left unused.
The use of AutoCad software for construction planning and Microsoft Excel for creating spreadsheets are the maximal depth of digital penetration in the construction industry today. As a result, the industry observes only 1% of productivity growth over the last two decades.
So, why are construction companies so stubborn? Is there any way they start an active technology adoption ?
In this article, JatApp is going to discuss the reasons for such a strong resistance to tech change in the construction industry, and whether it makes sense to invest in tech projects oriented at digitalization of construction development, planning, and building.
Why is the construction industry so resistant to technology adoption?
The 2020 CIO Survey reports that construction companies, which somehow managed to adopt construction management software, observed a growth of operations efficiency by 12%, customer experience by 14%, customer trust by 12%, and employee experience by 11%. Nevertheless, the majority of construction businesses keep ignoring digital transformation. Why?
There are several reasons:
- Legacy processes. The construction business is a historically fragmented industry that involves multiple stakeholders, who have their own areas of responsibility and work approaches. That is why it’s really difficult to connect different parties with a single end-to-end digital solution.
- Human factor. It’s hard to convince builders that the use of digital tools will make their tasks much easier to complete. People, who used to rely on doing their job manually, don’t trust construction software because they have no background knowledge about its use in their profession.
- Project costs. General contractors always seek ways to reduce costs and avoid overheads, while implementing a digital technology means extra expenses. A construction management software has to clearly show why it is worth spending so much money.
- High risks. Every single construction project involves high risks, because multiple external factors can unexpectedly interfere with an asset’s development and building. Digitizing performance of any relatable activity is risky twofold, because a contractor can’t be sure that a construction software is actually effective and won’t cause any trouble.
- Too many stakeholders. It is difficult to decide who has to spend money and roll out a construction management software: contractor, employer, or engineering company. On top of that, it’s very hard to persuade and teach the rest of the stakeholders to use the same construction software.
The construction industry does adopt digital technology — slowly, but with confidence
Even though the construction industry has sound reasons why it’s missing out a digitalization mania that other businesses experience, there is evidence that many engineering and construction (E&C) companies are ready to say “bye” to spreadsheets made with MS Office software.
According to McKinsey & Company, the investment in construction management software has doubled in the last decade.
At the same time, the volume of investments made by venture capitals has become 15-fold for the same period.
Technologies for the construction industry emerge little by little: for instance, building information modelling and 3D planning are already commonly used. However, there are many more opportunities, as construction software features can vary.
Here’s an example from a real case. JatApp’s client wanted to improve a safety culture within their workspace, so they decided to cooperate with our company to build the Near Miss Reporting App. It is a web-based and mobile app that integrates with IBM Tririga workplace management system for reporting near misses. This digital solution can be particularly useful at any construction site, where the risk of injury caused by a near miss is extremely high.
Near Miss Reporting App user interface
The opportunities for digitalization of engineering & construction companies are almost infinite, but there are three major categories of construction management software that get much attention: digital collaboration, back office, and on-site execution. Let’s discuss each of them in detail.
Once multiple stakeholders manage the construction process, arrangement of seamless collaboration is a foundation of a project’s successful accomplishment. Gathering investment, communication with the customer, management of material and equipment, and project monitoring are only several examples of processes that can be optimized with digital solutions.
Many engineering & construction companies suffer a loss, as they have to engage in risky financial relationships with other stakeholders. Customers don’t make payments on time quite often, while banks are extremely unwilling to lend money to a newly opened construction company.
To address this challenge, Flexbase, a startup based in San Francisco, introduced its own credit card for the construction industry. The card provides investors with 60 days of interest-free financing and transaction automation.
Flexbase credit card powered by Visa
Also, Flexbase offers bid management features, automatic invoice filling, and document management, so all paperwork is done in a matter of seconds. As a result, a payment preparation process doesn’t take more than 50 days instead of 100, thereby increasing the chances of E&C companies to gather investment and get a bank loan.
Flexbase user interface
You won’t argue that any construction process begins with a profound project planning, so much of back-office work should be done first. Planning of resources, infrastructure, land acquisition, and similar are the major tasks E&C companies need to complete.
Sure, every company tries to collect and make a use of the expertise they gain after each project. It’s not always real in practice because too many people are involved, so a record of all expertise data and knowledge is hard to keep in a written format.
Mosaic is one of the reasons why construction companies should give up project planning with just pen and paper. Instead, the startup offers a construction estimating software solution that helps to automate infrastructure planning. This construction software is designed to reduce build time, expenses, resource waste, and advance construction quality for E&C companies.
At its core, construction software for builders and contractors digitizes conventional construction plans and detects the most appropriate approach to on-site homebuilding, so the same conventional resources, workforce and processes can be used.
Mosaic analytics tab
In fact, execution of tasks on-site is the most painful aspect of construction projects. Missed deadlines and budget overheads due to inadequate project scheduling, supply delays, subcontractor’s issues, or even weather conditions are common problems associated with on-site works.
However, complex problems are often managed with simple solutions, and the on-site execution is no exception. That’s why a good project management software for the construction industry is more than enough to keep on-site works going as planned.
Procore is a valid example of construction project management software specifically designed for construction companies, as it enables monitoring of a project’s progress, connects the back office with on-site teams, and helps with budget evaluation.
Procore user interface
It’s time to strike the construction industry with your tech solution
The construction industry is apparently the biggest snail when it comes to adoption of digital technologies, but investments in development of construction management software are welcome and practical enough.
However, let’s remember that the development of construction software is obviously a complex process, so it’s necessary to know all the nuances before launching a relatable project. To learn more, read our article about construction software development.
In the same vein, you surely need a team of experienced tech professionals who can develop construction management software according to your business needs. JatApp has been providing custom software development for real estate service since 2015 and built many products such as property management platform.
By cooperating with us, you’ll save up to 60% of development costs in comparison to the Western markets. Get in touch with us, and we will get back to you soon.