Project intelligence is not an expense, but an investment
By Shannon Bryant
Megaprojects were around long before modern mobile construction tech, but it’s hard to imagine how project managers dealt with the complexity.
Monuments like the Eiffel Tower, Sears Tower or even the World Trade Center were all completed without the coordination that modern construction tech provides. So, how much easier — and more profitable — could those projects have been with access to modern management tools? One expert says we’re only beginning to see the impact modern tech can have on megaprojects.
Kyle Slager grew up around the construction industry, working on his father’s construction sites before he founded Raken, a company providing field management software. Raken’s technology has been used to coordinate several high-profile megaprojects.
Project management has to deal with the inherent complexity of a construction project, which exists no matter the size of the project.
“Construction projects are chaotic,” Slager said. “Simply put, there’s just a lot going on, and everybody who is hired to build something is also responsible for documenting what they’re building. Without technology, they’re working in their silos, and silos are where small problems become big problems.”
Those problems only scale up. In today’s economy, megaprojects can often cost $1 billion or more.
“The general contractor managing the project (for a megaproject) could have thousands of subcontractors on the jobsite, all of which have multiple equipment and material deliveries every single day,” Slager said. “In some of these projects you could be a mile away from somebody who needs to know that you received an equipment delivery today because that affects their timing. Something as simple as having a couple hours of rain could push back a concrete pour which can delay the entire project – this can cost hundreds of thousands to millions of dollars.”
Because of this complexity, Oxford project management expert Bent Flyvbjerg estimated that nine out of 10 megaprojects go over budget. Slager said the budget factor is one of the reasons why megaprojects of the past could have benefitted from construction tech.
“Technology provides greater visibility, which leads to greater forecasting and predictability,” he said. “Historically, you couldn’t access data that’s available today, making time and budget much harder to predict. With increased predictability, construction companies are more profitable. These profits are then reinvested in technologies which further increase efficiencies and are starting to really push the industry forward.”
Increased adoption of project management technology is helping take the mystery out of megaprojects, though. In an industry previously resistant to technology, the shift towards tech solutions is a big change. Slowly, static pen-and-paper documentation and even spreadsheets are being replaced with new, dynamic tech.
“The construction industry was one of the only industries in the world that looked at technology as an expense rather than an investment,” Slager said.
The reason is the risky nature of the business itself. When you don’t know if your next project will be profitable, and with market fluctuations having a huge impact, it’s hard to justify taking a risk on learning a new technology. But project management solutions and many other tech advances coming into the construction industry are taking the guesswork out of projects.
“I think the industry is getting smarter and smarter,” he said. “Now, that data can be turned into project intelligence.”
Under the old model of pen-and-paper documentation, lessons learned from a project were often lost. With project management platforms, those data points are collected and accessible to inform later projects.
“Over time, you’re going to see that construction companies are going to be able to become more and more accurate regarding costs when they bid for a project,” Slager said. “Owners, developers and general contractors are going to get smarter and smarter about what the expectations should be from those bids.
“I think there were a few decades when companies questioned whether tech could really move the needle, but the conversation has completely changed. Enough have experienced savings that are impossible to ignore, and we’re seeing a major paradigm shift.”
Construction technology is a developing field, and Slager said he sees several advancements coming in the future that will help make megaprojects easier to manage and more profitable. But, to be successful, any new technology must address real-world challenges in the industry.
For example, before launching the software in 2014, Raken’s founders met with more than 100 general contractors with experience on megaprojects. Slager said most of them identified daily reporting workflow as their biggest pain point, citing taking an hour or more each day to document everything that occurred on the jobsite.
With that much time involved in documentation, the contractors said sometimes it gets forgotten, put off or not done at all, opening their companies to costly litigation.
“They can get sued up to 10 years after the conclusion of a project,” Slager said. “On any project, something can go wrong. At the end of the day, they hire a team of lawyers to go through filing cabinets to find the report for that day, which might be incomplete or not there.”
Raken addressed this pain point with a mobile solution that would make daily reporting a one-click task, then followed with a live-streaming dashboard for office staff. The first Raken pilot project showed $1 million in time savings alone.
“The value proposition became really clear,” said Slager. “That’s happening in different technologies in all different phases of construction execution. New technologies are completely changing the game.”
While most construction technologies are still in the early adoption phase, Slager said they have the potential to make all projects, but especially megaprojects, more profitable and easier to manage. However, he encouraged general contractors to get recommendations first.
“In speaking to our industry, there are just so many examples out there of companies being more successful and projects being more profitable by utilizing technology,” he said. “I would challenge them to reach out to the companies that have had successful outcomes and find a technology that suits the needs of their business. I think they will find that in the near term and even more so, the long term, they are going to significantly benefit from making that investment.”
Those benefits, like the chaos of any construction site, only scale up. And the next innovation may be right around the corner.
Shannon Bryant is a writer with more than 15 years of journalism experience covering business, construction and local government. She is a content marketing writer for Ripley PR, the Maryville, Tenn. agency representing Raken.