March 18, 2020
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Is there a sector more resistant to change than the construction industry? Even staring down a future filled with labor shortages, cost and time overruns, and outright project failures, the industry lags far behind others in realizing the benefits of technology in construction.

The barriers to construction technology implementation vary, across both small and large engineering contractors. Transforming legacy paper systems into digital constructs will require bold action against the backdrop of diminishing margins driven by competitiveness.

Old Habits

“We’ve always done it this way” may be the top challenge to construction technology adoption. Firms that have successfully remained in business for years carry a legacy of processes and systems that have worked in the past. Because of this, they are often reluctant to embrace anything new. This is especially true of those changes that may require a significant investment of people and capital.

Reluctance to Invest

The investment required for digital transformation is too often restrained by failing to take the long-term view. While many firms have committed resources to incremental and siloed adoption of technology solutions, true integration remains a problem for most and keeps ROI at a low ebb. Companies that look only to short-term cost-benefit analyses, instead of looking further down the road, will find themselves increasingly at a disadvantage as competitors holistically embrace new digital formats – and benefit from integrated insights not always visible.

Change Drivers

While these and other factors contribute to construction’s low technology adoption rates, changes coming from outside are forcing firms to rethink their position, due to competition driving down margins. But short-termism can be just as costly.

VC Investment

According to a report by the CleanTech Group, VC investment in construction technology ballooned from $352 million in 2016 to a staggering $6 billion in 2018. Clearly, investors are seeing the potential of technology to actually do something about the industry’s largest problems.

Niche VC outfits, such as Bricks & Mortar, are beginning to light up the potential in new construction tech, thus emphasizing the various needs to be served.

Stakeholder Demands

As with most innovation, change is usually driven from the top down. And so it is with technology in the construction industry. As projects increase in size and complexity, more governmental and private project owners are requiring digital construction capabilities from project design to operations.

Increasingly Complex Projects

The increasing complexity of projects demands more speed and precision in data collection and sharing. The sheer volume of data to track may be a key factor in creating construction’s digital future, as managers are called on to improve project and firm performance.

Labor Problems

As the current workforce ages out, firms are finding it difficult to replace these skilled and experienced workers. Even in firms with a ready pool of younger workers, the system of older workers passing on their knowledge and experience is not holding up well, leaving significant gaps in capabilities and reducing competitiveness.

The problem is made worse by the stigma attached to the industry among younger generations. Recent graduates who are very qualified for construction technology jobs often don’t find the industry attractive and don’t consider it a worthwhile career choice.

Will the adoption of digital construction technologies incite a change in perception and help attract these digital natives? Those who respond will find no lack of opportunities. According to the U.S. Bureau of Labor Statistics, openings for construction managers alone are expected to rise by 10 percent from 2018-2028, double the average rate for most occupations.

How Digital Helps

Digital construction solutions help firms overcome project challenges by improving predictability, transparency, and accountability. By providing visual insights into every aspect of a project and real-time monitoring capabilities, solutions produce more accurate work and eliminate rework, aiding cost reductions, on-time delivery, and profitability.

As the construction landscape continues to change, firms that fail to digitize their operations will see their market share drop. Evaluating the benefits of digital construction should be a major consideration for businesses that wish to succeed.

Want to explore the competitive potential of adding digital to your mix? Contact us to discover how.