Increasingly economical and focused software can overcome barriers to adoption.
By Sergey Sundukovskiy, Ph.D.
Technology is driving competitive success and structural change in the engineering and construction (E&C) sector. To capitalize on the competitive advantage that technology can offer, engineering and construction companies need to act quickly or be left behind.
Return on investment
According to “Shaping the Future of Construction,” a report commissioned by the World Economic Forum, the E&C sector has been slower to adopt and adapt to new technologies than other global industrial sectors. A historically conservative approach to project design and delivery has hindered productivity increases.
This has begun to change. For decades, the construction industry has had the lowest spend on technology among all other industries — 1.2 percent of revenue; however, industry leaders have begun to realize that technology spend is no longer a cost-center, but rather a profit center in a number of different areas.
Even a modest increase in productivity across the industry through adoption of innovative technologies would have far-reaching economic effects, according to “Reinventing Construction Through a Productivity Revolution,” a McKinsey Global Institute report. According to the report, “If construction-sector productivity were to catch up with that of the total economy (i.e., by increasing productivity growth by 1.8 percent) — and it can — this would boost the sector’s value added by an estimated $1.6 trillion, adding about 2 percent to the global economy, or the equivalent of meeting about half of the world’s infrastructure need. One-third of the opportunity is in the United States.”
In the crowded E&C sector, the slightest competitive advantage can make the difference in securing a multi-million-dollar contract. A track record of performance matters, but designers and contractors face industry pressures such as skilled labor shortages and growing project complexity that make it increasingly difficult to meet time and budget milestones.
Contributing to the problem is that old-fashioned management tools are not adequate to meet the demands of modern project governance. Often, firms rely on a manual spreadsheet or paper-based management activities that do not accommodate the complexities of projects and cannot keep up with the need for real-time information. To stay competitive, E&C companies must break away from the legacy pen-and-paper management of the past. Increasingly, firms are opting to implement easy-to-use construction software for daily reporting and project management.
Still, E&C firms face two main barriers to adopting new technology: the investment required to purchase and implement it and the resistance or perceived learning curve to use it. The construction software market has responded by developing a diverse ecosystem of applications, from all-in-one enterprise packages to best-of-breed solutions that target specific workflows or pain points.
Best-of-breed apps can address daily management duties, including incident reporting, productivity measurement, time and materials tracking, or dispatch and scheduling. They often take the form of applications that can run on common mobile devices such as smartphones instead of being confined to laptops or PCs.
Project management is only as good as the data available. Old-fashioned reporting tools are prone to errors and omissions. Cloud-based construction monitoring software can make it easier to document all the data points during the entire life cycle of a project, reported in real-time from the field. The data generated in daily reports — from photographs to documentation of weather delays or safety incidents — can be stored in a secure and easily accessible database in the cloud.
Team members can be automatically informed of changes and issues as soon as they are reported from the field, allowing problems to be addressed immediately. Construction monitoring software reduces errors and can improve communication with stakeholders, keeping them informed of project progress or delays.
Technology can enhance the request for proposal (RFP) process, increasing the chance of successful contract awards. The data collected through construction-monitoring applications can be fed into bid management software, automating and increasing the accuracy of job costs and overall estimates.
These software packages can strengthen a traditional weakness of construction firms — properly recording and managing subcontractor data. Depending on emails and spreadsheets to keep track of subcontractor activities makes it difficult to compile accurate data on the performance and compliance of subcontractors. Storing the data in a secure, accessible cloud-based database eliminates the need to spend hours compiling, curating, and updating subcontractor information needed for bid packages.
Summing it up
E&C companies have a simple choice: They can embrace technological change to enhance their competitiveness and productivity or stick with old-fashioned management and production techniques that no longer meet the needs of the marketplace. The evolving construction software market is responding to the needs of the industry by developing increasingly economical and focused solutions that can overcome the barriers to technological adoption.
Sergey Sundukovskiy, Ph.D., is co-founder and chief technology and product officer for Raken (www.rakenapp.com), based in San Diego. Raken offers a daily reporting app for the construction industry and introduced a Time Cards product that relieves construction managers of the administrative burden of paper-and-pencil time tracking.