Despite the latest trends in construction technology, there are still a number of things that can work against a company being profitable.
One of those is getting boxed in by contracts for the projects you work on. Provisions of a contract can make a big impact on a company’s bottom line, particularly for specialty contractors.
While technology is improving in the industry, there are many who feel that contracts are getting worse. The problem with contracts can include deficient language that works against the contractor. Sometimes bidders are even expected to agree to a contract before they bid on the project. Not surprisingly, contractors often pad their numbers to anticipate paying for risk that is a part of the contract.
One solution to this situation is to partner with the contractor developing the contract, but many companies are not able to do that yet. In situations where that is taking place, companies can be better partners on a project. Trust can be built through transparency.
Another thing that can work against companies is data overload. Working with information is a challenge. People in the construction industry have operated on “gut” feelings for a long time. Data collection is spotty; people are busy; they don’t want to change processes; some prefer paper forms. It can be a lengthy list.
However, there is a lot of low-hanging fruit when it comes to opportunities to gather data on a project. Companies simply need to ensure they are collecting good data, because one of the things that can help build good bids is a solid foundation of information, project history and insights into trends. To build that foundation, you have to sift through and prioritize, or mine, your data. You need certainty when you’re bidding a job. For instance, you can perform an overview of a project that has just been finished. What went well; what went poorly? This type of study isn’t done consistently because teams must move on to the next project.
A third challenge to companies is adoption of construction technology. If a company has had a negative experience with tech they have adopted in the past, they are less interested in implementing tech in the future. On the other hand, contractors still have a backlog of work. Demand is still high, and money is still available. This will keep the industry in a good place. There is still record-breaking demand and output. A surprising number of mega-projects are underway around the country. With the abundance of work and opportunity, the industry is challenged to build and retain a labor force that can support that production. Technology must be a part of that solution, and so will industrialized construction.
If we can develop the infrastructure in the U.S. to alleviate supply chain problems and protect against future problems, the industry will continue to be in good shape.
Tune in to episode 152 of Bridging the Gap Podcast, where listener-favorite Josh Bone discusses the latest research and trends in the construction industry.