This article originally appeared in the July issue of the Grand Valley Construction Association Journal.
A recent industry survey by McKinsey identified productivity in the construction industry as under-performing, with a 1 % per year growth over the past two decades, compared to growth of 2.8 % in the world economy and 3.6 % in manufacturing.
Part of the reason for the industry’s poor performance is the slow adoption of new technology. Among the 27 industries surveyed by McKinsey, construction scored the lowest in digitization, with minimal investment in technology and use of computers in operations. The lack of information technology investment has resulted in productivity deficits and rising costs due to the following factors:
- Disorganization: lags in decision-making and procurement processes with an inability to scale.
- Miscommunication: inconsistent reporting leads to a lack of common understanding between contractors and owners.
- Poorly Calibrated Performance Measurement: issues are unresolved and accountability is nebulous.
The keys to adoption of new technology in the construction industry are; (1) innovations that decrease the cost of investment; and (2) a comprehensive understanding of how the technology can be used to improve productivity.
Decreasing the Cost of Investment
- Informed decisions based on readily available data: Project sites generate vast amounts of data, but little of this is captured, let alone measured. The Internet of Things, sensors and wireless technologies that connect devices, can generate easily analyzed data to improve efficiency and minimize risk.
- Reduced maintenance costs of software and hardware: Using Software as a Service pricing models and cloud-based technology to limit upfront investment and allow for scaling.
- Collaboration software to improve communication: The deployment digital-collaboration and field-mobility solutions can integrate project planning, engineering, and budgeting for large projects.
- Digitized document control for compliance requirements: The construction industry’s reliance on paper is a contributing factor to its poor productivity relative to manufacturing.
Understanding New Technology
The wide variety of information technology is often beyond the capacity of traditional IT departments. To solve this problem, many companies are turning to IT consultants, who can deliver value through IT expertise, and allow your company to focus on its core competencies.
The adoption of new technology has a momentum of its own. As the number of users reaches a critical mass, new technology leads to added productivity gains through interoperability and continuous improvement processes.
The best approach to technological implementation is a return-on-investment orientation. Work with a consultant to measure how new technology can create positive effects on cost, schedules, and risk mitigation to build a compelling case for adoption.
With our IT expertise, Pund-IT can help you develop the tools to complete projects on-time and under-budget.
Please give us a call at 519-342-4004 to discuss how we can build for the future.