PlanGrid Construction Productivity Blog
More technology in the construction industry

The Business Case for More Technology in the Construction Industry

3 Compelling Reasons to Invest in More Tech on the Jobsite

With over $10 trillion of goods and services generated every year, the construction industry is one of the largest economic sectors in the world. Nevertheless, the industry’s high-risk investments and tight profit margins create a culture that is wary of any sort of change–including emerging technology.

Still, adopting technology in construction is not just about innovation for innovation’s sake–it’s about progressing the industry forward and moving the needle to provide increased profits and productivity for your company. But making a case for innovation can be tough for even the most progressive construction executive. Risk and tight margins aside, consider that only 11% of construction CEO’s believe that their company success depends on radical innovation, according to Vistage’s Q2 2018 CEO Confidence Index Survey.

Nonetheless, it’s time that technology investments become part of each construction companies game plan. If your company is still on the fence about upping its investment in construction technology, below, we’ll provide you with three solid business cases for investing. With proven examples and statistics, you’ll be able to make a case for bringing more innovation to the jobsite.

What Construction Can Learn from Other Industries

Before we get into the specific business benefits for more technology for construction, let’s take a look at best practices and examples from other industries. First, consider the healthcare industry. Until very recently, the medical industry was still working with paper charts and x-ray film that had to be couriered from one office to another. Nurse notes and doctor notes were laboriously written out and filed away in storage vaults that would take days to retrieve. Now, 90% of this information is available electronically to all caregivers and even patients themselves and x-rays are completely digital.

Another example is the manufacturing industry that once created “islands of information” with each department creating their own databases and solutions. They became famous for “throwing data over the wall” from engineering to manufacturing and on to sales and customer service. A concentrated effort by manufacturers and distributors to implement Enterprise Resource Planning (ERP) solutions has yielded many positive results in productivity.

When it comes to transportation and logistics, FedEx, UPS and the USPS are now turning the delivery industry on its ear with fantastic new ways of delivering products to your door, telling you exactly when it will be delivered and providing tracking information all along the way. Service organizations are learning from them and Uber to advise customers in advance when they will show up for a scheduled appointment. Even the trucking industry is looking to new technology to improve its efficiency and is using GPS technology to track where the fleets are located and advising drivers when they are about to max out on their hours per day.

So, what specifically will put the construction industry on the same modern playing field as its industry peers? It takes an investment in technology to address core industry problems like rework, poor data and miscommunication. Below, we’ll discuss three compelling business cases for why construction should invest in more tech.  

Business Case #1: Technology Can Help Reduce the $31 Billion in Rework Problem in the US

One of the most significant challenges that continue to plague construction companies is rework. According to a recent construction report from FMI and PlanGrid, 52% of rework is caused by poor project data and communication; this adds up to approximately $280 billion globally or $31 billion in the US.

The construction report surveyed nearly 600 construction professionals on how their teams spend time on the jobsite. Key findings include:

  • Workers lose nearly two days per week searching for project information
  • Half of all rework is due to poor communication and poor project information
  • Workers are not fully utilizing the technology available to them

One of the most alarming findings is the following:

“While 75% of general contractors and specialty trade contractors provide mobile devices to their project managers and field supervisors, only 18% of companies consistently use apps on mobile devices to access project data and collaborate with project stakeholders!”

Nonetheless, some companies are maximizing technology on the jobsite and seeing measurable results. For instance, by using PlanGrid, specialty contractor, Power Design, estimates by conservative measurements that $2.4 million was saved in rework. Another company, Bartlett Cocke, estimates they had $189,000 in rework savings from just one project–the University of Texas Health Science Center at San Antonio.

In addition to construction productivity software, technology like GPS, big data, the Internet of Things (IoT) and wearables are all helping construction companies to streamline their operations, reduce costs and provide better services to their customers.

Looking to learn about more specific uses for technology in construction? Take a look at this article from construction highlights several key ways that technology is working its way into the construction industry, including:

  1. The Office – keeping paperwork in order including safety data sheets, OSHA reports and general bookkeeping
  2. Autonomous Trucks –  With technology, tucking is becoming smart
  3. Materials – everything from 3D printing to aggressive recycling programs is saving money and helping the environment
  4. Monitoring Productivity – there are many tools available to reduce reworks, streamline data entry and improve communications
  5. Smart Roads – GPS and other geospatial technologies are advancing at a rapid rate
  6. Wearable Technologies – smart helmets, laser headgear and other technologies are keeping worker safer while making them more efficient

Business Case #2: ROI the Whole Team Can Stand By

There are countless documented reports on how technology in the construction industry has provided a substantial return on investment including. For instance, according to Dodge Data and Analytic, 82% of companies that used building information modeling (BIM) reported a positive ROI.

With the right implementation strategy, some companies are experiencing massive returns. For example, using collaboration software, Ardent Construction reported a 2,817% increase in return. Alternatively, T.B. Penick & Sons, Inc. reported a 6,019% ROI from construction software.  

One emerging technology in construction that has been gaining buzz for its potential game-changing ROI is artificial technology (AI). According to a recent McKinsey report, AI and machine learning are the new frontiers for technology in construction. They demonstrate how other industries are using AI in areas like transportation route optimization, supply chain optimization, robotics for modularization and 3D printing, image recognition for risk and safety management, design optimization, hiring and retention and more. In the case of drones, 92% of construction firms using them reported a positive ROI.

AI, along with other emerging technologies, suggest that although construction has a long way to go, there are many companies now recognizing the untapped opportunities available for technology in the construction industry.

Business Case #3: A (Significant) Reduction Long-Term Facility Costs

All owners know that after construction ends, the real costs start to accumulate. Operating and maintaining a facility is costly. Nonetheless, with the right access to data and information, these costs can be reduced significantly. To collect the correct data, technology needs to be incorporated throughout the construction process to provide accurate and complete as-builts and handover packages.

According to construction industry thought leader, Geoff Zeiss, “Since for many types of equipment the highest probability of failure is in their first month or two of operation–just during the period that the building operator often doesn’t have access to information about warranties and extended warranties–this increases the risk of equipment and even facility failures.” He continues, “In addition, there is a cost associated with just finding the information required to service equipment.”

The PlanGrid and FMI report also provides a compelling business case for more technology in construction. According to the study, 71% of owners indicate that capturing and retaining more data during design, construction and closeout will significantly reduce lifecycle operations costs.

Still not convinced? BIM has been cited as one technology proven to reduce facility operations costs in the long term. According to a five-year study, BIM for facility management saved on average 5% of operating costs per year.

Technology in the Construction Industry Investments for Your Business

When you are ready to investigate how technology in the construction industry can help your business, this is a good place to start. Perhaps the main reason why existing tools do not work or are not being used is that IT professionals fail to work closely with field personnel when they make decisions about technology in the construction industry. Here are three guiding principles for choosing the right technology in the construction industry:

1. Do your research to find the best fit

What kind of pain points do you need technology to help solve? Where could your productivity be improved most on a day to day basis? First, consider your business’ biggest needs and find a solution to help address them. Make sure to involve the workers who will actually be using the technology–e.g., field personnel if it’s field software–during the investigation stage. Don’t know where to start? Here’s a useful buying guide for construction software.

2. Calculate the ROI for each option

Consider what’s the cost to invest–this is the full implementation cost of licenses and indirect costs like hardware and training. Most importantly, try to calculate the return your company will get from the software. Recognize that a higher priced solution could provide triple the ROI from one half the price, and vice versa. If you’re looking to calculate your ROI from construction software, download this useful guide.

3. Carefully consider your rollout strategy

Rollout involves more than monetary resources. In construction, time is one of the most limited resources you have. Find a solution that makes sense to roll out efficiently. Can your workers be trained and get up to speed with the technology quickly? Or will it involve several weeks to get to an operational level? Prioritize solutions that are easy to use and roll out efficiently. If you’re already starting to rollout technology and are looking to increase adoption among your workers, read our blog with 10 tips to help facilitate.

Make Technology in the Construction Industry a Priority 

The construction industry has a long road ahead when it comes to full-scale technological change. However, even the smallest amount of investments are starting to pay off big time for companies that are ahead of the curve. It’s time to make technology a priority in the building sector–and there’s more than a strong business case for why to do so. Drag your organization into the 21st century by leveraging more and new technology in the construction industry today.

Grace Ellis

As a Content Marketing Manager at PlanGrid, Grace is the managing editor for the PlanGrid Construction Productivity Blog. With over eight years of experience in marketing, communications and PR for technology companies, she is specialized in high-quality content creation across both traditional and digital media platforms.

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