There are barriers that prevent companies from adopting technology. Construction has seemed to lag behind the trends of other industries in using data to run businesses in a more effective way.
If you look at something as commonplace as the yard function – where the construction company needs to know how long a piece of equipment was used on a job and how much to bill for that – it’s counter-productive to have someone track that on paper. This is a perfect example of how technology can be used to increase productivity. Yard function can be tracked using tech, connecting the field with accounting, and software can automate the billing process.
What is the tech stack that your company relies on? How does that tech stack compare to other industries? The best way to use technology is leveraging data to operate your business.
One place to start is by creating a more automated operating environment and eliminating low value activity, for instance entering the same data in multiple places. Not only can the integrity of the data suffer in those situations, the people responsible for doing that are wasting valuable time. They should be focused on more value-added activities to serve the company.
The tech trend in construction is lagging in automating data capture and use because the industry has historically been labor-intensive and labor-driven. About half the cost of construction is still tied to labor. Many people are still comfortable filling out timecards by hand and processing them by hand one by one. Data needs to be routed where the right person can access it when they need it, whether it’s the CEO, CFO, accounting, purchasing, or payroll. Your company should have a data profile: workflows, cost-accounting, data recording. Where does your data need to move?
When we compare construction to manufacturing, we see that manufacturing had to put assembly lines into place and go through an industrial revolution to increase production from its workforce.
In construction, this is starting to happen. Modularity and materials innovation are signs of this. Assembly-based construction and other trends are coming, and the construction industry is primed for taking advantage of them. Standardization and establishing consistency in the industry will lead to efficiency. The ultimate target should be completing more projects on schedule and within budget. Tech can make that goal accessible.
The evaluation and implementation of tech remain low because many business owners still think of tech as a cost, not an investment. We need to view tech as an investment that you get a return on and then track that return once it is implemented. Ultimately, what’s more important are business processes and best practices around workflows industrywide.
Join me on episode 55 of the Bridging the Gap Podcast with guest Tom Stemm, a tech enthusiast with twenty years of experience building companies from the ground up. During the podcast, we discussed how different business models affect success and why data is the new currency of business.