The construction business lags behind many other parts of the economy when it comes to improving productivity — and as a result, many home builders are taking big financial hits. That’s the main takeaway from the McKinsey study, “Imagining construction’s digital future.”
The study pulls no punches when it comes to the myriad problems the industry faces. It starts off this way: “The construction industry is ripe for disruption. Large projects across asset classes typically take 20 percent longer to finish than scheduled and are up to 80 percent over budget. Construction productivity has actually declined in some markets since the 1990s; financial returns for general contractors are often relatively low—and volatile.”
A primary cause, the report says, is “the construction sector has been slow to adopt process and technology innovations.” There’s little coordination between the office and the field, and planning is frequently done on paper.
Worse, still, it warns: “The industry has not yet embraced new digital technologies that need up-front investment, even if the long-term benefits are significant. R&D spending in construction runs well behind that of other industries: less than 1 percent of revenues, versus 3.5 to 4.5 percent for the auto and aerospace sectors. This is also true for spending on information technology, which accounts for less than 1 percent of revenues for construction.”
It's hard to believe these companies have adopted accounting software, but are still using paper for project planning, project scheduling, and inspections. Construction companies have been slow to adopt process and technology innovations. There is little coordination between the office and the field, with planning frequently done on paper. Companies must adopt more construction project management software to improve performance and deliver more projects on time.
And things, the report warns, are only getting worse, as construction projects become larger and more complex, as the shortage of skilled labor workers grows, and as environmental regulations require that traditional ways of doing construction be changed.
However, there’s a bright side to the report as well. It outlines a series of ways in which the construction industry can transform itself, improve productivity, cut costs, meet deadlines and reduce overruns. One of the most important is digital collaboration and mobility.
The report notes that “One reason for the industry’s poor productivity record is that it still relies mainly on paper to manage its processes and deliverables such as blueprints, design drawings, procurement and supply-chain orders, equipment logs, daily progress reports, and punch lists.”
“One reason for the industry’s poor productivity record is that it still relies mainly on paper to manage its processes and deliverables such as blueprints, design drawings, procurement and supply-chain orders, equipment logs, daily progress reports, and punch lists.”
Digital collaboration and field-service mobility solutions can solve the problem, the report says. Digitizing all of its processes and data, and allowing for collaboration in the field and with the office will give companies tremendous benefits. All this, the report concludes, “could change the way the industry does everything from work- and change-order management, time and material tracking, dispatching, scheduling, productivity measurement, and incident reporting.”
Finding the Best Construction Management Tools
Construction firms need to find the best platform for building mobile apps that do time tracking, project management, task management and more. An ideal one for large or small businesses is Alpha TransForm. It lets companies build applications that tie construction sites directly to back office operations. They can improve logistics, make sure that construction documents are always within reach, and cut down on mistakes and rework. In addition, mobile apps can streamline inspections, dramatically improve data collection and make document management easier.
Construction firms need to find the best management software solutions for building mobile apps.
To see how Alpha TransForm can help, check out how the Building Engineering Company used this construction management software to increase inspection throughput, improve data accuracy and made the data available to the company’s systems immediately.
Further reading on trends in Construction Software and Solutions: