using technology to grow your construction business
The top 8 ways to use technology to grow your construction business
By now you know that technology is a great game-changer. It helps streamline your business by making existing processes easier and cheaper, right?
Now think about this for a moment:
According to the Department for Business, Energy & Industrial Strategy, the construction sector is one of the largest in the UK economy. Also, it employs 3.1 million people or over nine percent of the workforce.
But there’s an unexpected problem...
95 percent of all data captured in the construction industry goes unused according to a report by FMI
As evidenced above, collecting data is not enough. The information accumulated should also be reliable and consistent. Incomplete data is as dangerous as inaccurate data. It can create confusion and lead to flawed conclusions. Lastly, you also need to analyze it to make informed decisions. And that’s where technology comes in.
Let’s now look at some of the key areas you should consider implementing technology.
#1. Lead Times
Lead times is the amount of time that elapses between initiating a process and its completion. In construction, it’s the time taken to fulfill an order such as approval process, equipment hire, or even preparation of drawings.
Lead times can be affected by market conditions such as a shortage of materials leading delays. It’s therefore critical that long lead times are identified earliest possible. For instance, if a project requires specialist equipment such as rigs or cranes then it’s best that an order is placed before the appointment of a contractor.
A project’s success is not only dependent on what’s happening on the job site. The supply chain is equally important. Any miscommunication or delays in the flow of supplies has the chance of delaying your project’s progress.
In other words, only 25 percent of projects came within 10 percent of their original deadlines in the past 3 years, according to a 2015 report by KPMG.
Yes, lead times are unavoidable, but it’s best to know what to expect to make them bearable. So how can technology help?
With technology, it’s easy to streamline the processes. Internet of Things(IoT) allows the live monitoring of orders from your mobile device. Through advances in artificial technology, scheduling software allows project changes to be made dependent on the status of the shipments. Armed with such information, construction managers can determine the type of personnel needed in a job site to prevent overstaffing.
Productivity is still a daunting challenge in the construction industry. And to prove it, according to McKinsey, the construction sector recorded a measly one percent increase in annual productivity in the last 20 years.
For example, If you’re providing labour in a project, then it’s important to compare the budgeted hours with the actual hours worked once it’s complete. But it can be challenging to document labour downtime. One solution is questioning workers on their productivity. The problem? It creates room for dishonesty since no one wants to admit they aren’t productive.
With the right tools, one can measure the amount of time and effort that is being used in the various aspects of the project. For instance, you can tell the percentage of equipment and labour downtime. That way, it’s easier to adjust by assigning resources to areas that need them the most. As a result, you remain competitive and profitable.
#3. Marketing and Sales
Let’s be honest, running a construction business is demanding. And it’s also a fact that most contractors don’t have the time or energy to focus on other business areas such as marketing and sales. The result? Challenges in finding new work.
Marketing and sales is a never-ending process. You have to keep putting yourself out there to increase your chances of success. To succeed, you need a good system that allows you to generate and close leads. You can use technology to do that.
By going online there are a variety of platforms to use. You can advertise on social media, Google or even email.
And guess what?
According to Backlinko, 3.96 billion people currently use social media worldwide. This is almost double the number(2.07 billion people) in 2015.
The catch is, every platform is different and hence has to be approached differently. And yes, it takes time before you start seeing results. The key is consistency.
The good news is that you don’t have to do all this on your own. You could hire a specialist, or even an agency to do the work, and prevent you from making costly mistakes. This way you can focus on what you do best - construction.
#4. Construction Estimation
Construction estimation is a critical part of any project, but it’s also the most challenging. Profits are made or lost based on the accuracy of your estimates, and how closely they match the final project costs. For an accurate estimate then builders need to create detailed cost estimates and plans. This is only possible if you’re relying on reliable data.
The only problem?
A third of construction companies make less profits than expected based on their estimates according to a joint survey by QuickBooks and TSheets. But that’s not all. 40 percent of the respondents were not confident in estimating their project costs.
One or more mistakes in construction estimation could be costly. On one side you could miss out on a project because your bid is too high. Alternatively, you could get the job because your bid is too low and as a result make losses.
And that’s where technology comes in. Since no two job sites are identical, you can use localized construction estimators. These software programmes allow you to provide a client with detailed costs from project conception to completion.
#5. Anticipating Future Industry Trends
The market is dynamic and customer needs are constantly changing. If you’re not informed then you will set yourself up for failure without even realizing. You can listen to your customers and adjust. But that isn’t enough. You have to anticipate your prospects’ needs and surprise them.
One way is using horizon scanning. This is a technique used to determine whether one is adequately prepared for potential opportunities and threats. No, it’s not about predicting the future. Horizon scanning can involve identifying experts in a given area, then asking them to give insights on factors driving change to a future point in time. The findings are then compiled into reports.
Alternatively, you can use technology to better anticipate future opportunities. By better understanding what lies ahead, a company can think up new ideas, new products or even a new business model. Consequently, the firm increases its chances of remaining competitive down the road.
#6. Risk Management
Risk management is a challenge for every project manager. The truth is, 78 percent of engineering and construction companies believe that project risks are increasing.
To point out, construction projects can be complex and filled with uncertainty. Every project is different and has its own unique challenges. For this reason, construction is all about managing risks. Be it environmental, financial, operational or contractual. And if not checked, these risks can seriously derail your project.
Through risk management you’re able to meet your quality, time and cost objectives with minimal negative impact on project performance. To achieve that, you need enhanced communication and collaboration with all the stakeholders. By having everyone on the same page and working together, then it becomes easier to identify and manage risks.
Technology is now being used to enhance risk management. By providing real-time information, software programmes can help prevent lag time that usually happens when reports have to be made to people who can act on the information. Again, with just a click of a few buttons, it’s possible to consolidate reports from individual project teams.
Finally, by consistently collecting accurate data, technology allows you to do risk modelling and identify problems early enough.
#7. Dispute Resolution
Construction involves a high level of complexity and uncertainty. As a result, it’s impossible to foresee every problem at the outset, and this causes conflicts and disputes.
In other words, the global average value of construction disputes was $33 million. And the global average length of construction disputes was 17 months.
Astonishing, isn’t it?
Whenever there’s a disagreement, the first attempt should be to try to solve the dispute amongst yourselves. It’s faster, cheaper, the project doesn’t stall and good working relationships are maintained. But if that fails, other methods such as litigation can be used. Unfortunately it’s costly and time-consuming.
For smooth operations, you can use technology to record progress. It allows you to capture meaningful details in every stage of your construction project. For instance, with photographic evidence it’s very easy to settle defect claims and disputes. You can easily retrieve the information to support your case.
And isn’t that what you want?
#8. Choosing Reputable Subcontractors
A project’s success is dependent on the subcontractors you choose to work with. And finding reputable subcontractors takes time. Yes, you can rely on referrals but sometimes you can’t find a dependable partner. So what do you do?
The popular option is reviewing mountains of paperwork submitted by various subcontractors. It’s tedious and there’s a chance you won’t find a worthy candidate. But, there’s a faster and more accurate way.
Online prequalification technology allows you to sort, analyze and select from a pool of data based on given criteria such as geography, size, specialty, and market. This increases the odds of finding the perfect subcontractor for the job. With such information you can then ask a selected number of subcontractors to bid for the project.
In that case, the subcontractors spend their time working on bids for projects they have a chance of executing well. And ultimately it saves everyone’s time.
So What Does All This Mean?
As you have seen above, there are various ways you can use technology to grow your construction business. Also, new technologies will keep emerging in the construction industry. And it’s difficult to keep up with them all. To prevent overwhelm, just find one that suits your needs and run with it.
Yes, there may be short-lived challenges during the transition period and that’s okay. The benefits are worth the efforts.
So what’s stopping you?