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The Need to Invest in Construction Digital Transformation

Posted by Blake Mitchell on Jun 30, 2022

The construction industry rarely comes to a standstill. It’s fortunate to be a fairly recession-proof business. The only time jobsites shut down was during the early stages of the pandemic. Ever since, construction companies have been dealing with worker shortages and soaring costs of materials. Overcoming these problems demands a construction digital transformation.

It’s not just the high costs of materials affecting the bottom line. The number of construction site thefts continues to grow. Companies must contend with challenging delivery deadlines due to the shortage of truckers, cost overruns due to inflation, and competition.

Maximizing profits requires the industry to change. A McKinsey and Company report shows how construction lags in productivity and efficiency. The short version, McKinsey says the industry must change. McKinsey data reveals that large projects take 20% longer to finish than originally planned. They also go over budget by 80%. All the data points to the need for a construction digital transformation.

It’s an industry-wide problem. Other industries have seen productivity rise because of their digital transformation efforts and adoption of proper technology. The lack of a construction digital transformation is harming the industry.

According to McKinsey’s report, the construction industry has seen a drop in its productivity. Besides the absence of construction digital transformation and construction technologies, jobsites don’t innovate and often rely on outdated and inefficient processes.

But that’s changing.

Increasing Construction Productivity Is Mandatory

Construction almost has no choice but to bite the bullet and make a change. The skyrocketing rising costs of materials turn construction projects into tens of thousands of dollars more expensive.

According to the Associated General Contractors of America, construction materials have experienced the highest monthly and yearly increases in its 35 years of tracking the data. It’s so bad that the ACGA has published a construction inflation alert for the first time. The limping supply chain has delayed the delivery of many assets and materials. No wonder 20% of the projects miss their deadlines and go largely over budget. It’s hurting profits.

“The construction industry is currently experiencing an unprecedented mix of steeply rising materials prices, snarled supply chains, and staffing difficulties, combined with slumping demand that is keeping many contractors from passing on their added costs,” says AGC. “This combination threatens to push some firms out of business and add to the industry’s nearly double-digit unemployment rate.”

The immense surge in the costs of materials has greatly increased the total cost of any construction project involving materials. For instance, a home that prices at $200,000 will most likely end up with a 10 percent increase in its construction. This adds a hefty $20,000 to the cost of the home. It’s enough to compel the owners to opt out.

When will prices return to pre-pandemic levels? In a Forbes article, Bill Conerly believes the prices will not decrease until 2023. This is why it’s essential for companies to take steps to invest in construction digital transformation to increase productivity and save on costs.

Construction Digital Transformation Becomes a Priority

Retrofit reports on a survey by The National Association of Women in Construction (NAWIC) and Safe Site Check In shows more than 70% of the respondents say they’re making construction digital transformation a priority. Most of the participants believe technology will make their jobs easier.

A whopping 95% of survey respondents indicate they’re more productive thanks to construction technologies. Here are the top technologies identified in the survey report:

  • Smartphone apps for managing projects and the workforce
  • GPS Layout
  • Drones and robots
  • Augmented reality
  • Wearables

At 72%, most referred to smartphone apps as the most useful. One of the most insightful questions in the survey asks how the construction labor shortage impacts their jobs. More than half report projects take longer. More than half also state supply chain issues are affecting their work consistently.

“For a long time, the construction industry has been ripe for disruption. A disruption driven by the need for streamlined, digital approaches to replace outdated processes and protocols that cut into productivity and project profitability,” David Ward, CEO, Safe Site Check In, tells Retrofit. “Our partnership with NAWIC on this year’s survey underscores what we’ve been hearing for years – digital transformation is a business imperative for the construction industry on the job site and in the office.”

There’s a disconnect somewhere. National Roofing Contractors Association’s (NRCA) Professional Roofing article references a Dodge Construction Network survey. It indicates 95% of respondents in the construction industry are ready for digital tools. Yet only 15% of the participants have implemented a construction digital transformation strategy. Moreover, 38% report they haven’t built a strategy or put a priority on it.

Here’s the caveat of the NRCA story.

“In September 2021, Autodesk released a report showing bad data was costing the construction industry $1.8 trillion annually,” the author writes. “It also found 30% of the report’s respondents said more than half their data was ‘bad’ and unusable in their work. Autodesk encouraged companies to employ formal data strategies to make the best use of data collected.”

With scores of baby boomers retiring and tech-savvy generations entering the workforce, this is a great time for a construction digital transformation.

Construction Technology Worth Considering

A JBKnowledge survey of construction workers and contractors reveals 92% of the respondents use their phones every day on the job. Since the NAWIC survey lists mobile apps as the most useful out of all the technologies, here’s a look at how construction workers use mobile devices from a story in Electrical Contractor:

  • Looking at project documents
  • Doing service dispatch and billing
  • Creating project documentation like requests for information (RFI)
  • Managing email
  • Entering time for payroll
  • Reviewing BIM models
  • Viewing installation drawings

Construction workers are using more and more apps. A Construction Dive article shows that 22% of respondents say they used three apps for construction work. The following year, the number of construction-related applications used climbed to six. Here are the most popular mobile apps by category per Construction Dive:

  • Plan management: Bluebeam Revu, PlanGrid, and Procore
  • BIM file viewing: BIM 360 Docs, Bluebeam Revu, and Navisworks
  • Daily reporting: Bluebeam Revu, Procore, and PlanGrid
  • Photo/video management: Bluebeam Revu, PlanGrid, and Procore
  • Safety management: Bluebeam Revu, iAuditor, and Procore,

The biggest gains came from the adoption of mobile apps on construction sites. However, these apps lag in app integration and data sharing. The ability to integrate apps is a real problem as almost one-third indicate their apps don’t integrate data. Many employees continue doing things manually as almost half use spreadsheets, custom-built integration, or email.

Clearly, the construction industry has work to do to optimize technology for projects. At least, it’s moving in the right direction.

Technology That Enhances Safety and Increases Productivity

Another technology worth adding to your construction digital transformation strategy is remote video surveillance. While video surveillance is known as a security tool, it can do more than deter crime. Remote video surveillance allows construction companies to monitor the activity safely and remotely on the jobsite.

Trained monitoring operators and video analytics work together to observe what’s happening on a jobsite. They watch for activity, not just motion. This technology can quickly and effectively identify suspicious activities such as unsafe worker behavior, trespassing, and jobsite safety hazards.

As soon as video analytics spots problem, it can alert the monitoring operator who takes appropriate action right away. The monitoring operators are located in a different place away from the construction site. Their lives are never at risk.

The video surveillance system retains all of the recordings for review at any time. Some construction companies use these recordings for training. It helps demonstrate the right and wrong ways to do things.

Another unexpected benefit of the recordings is that they can help with property liability on a construction site and fraud. If someone files a claim against a jobsite, analysts can review recordings to piece together what actually happened. The recording may put a stop to an expensive liability lawsuit.

Video surveillance with remote monitoring helps avert crime. The sight of the security cameras can compel potential intruders to leave. For those that aren’t scared off by the cameras, the monitoring operator can use the audio system to issue a warning. This will have some trespassers turning around and leaving the construction site.

What makes remote video surveillance different from other security technologies is that it’s proactive. It delivers the highest level of security for your construction site while helping to improve productivity and reduce liability and hazards. You’ll experience a quick ROI for security because of all these benefits.

The technology can help cut costs. With monitoring, you can reduce the risk of damage and theft of expensive materials. Because high-quality security cameras can lower risk, you may also be able to get a price break on your insurance premiums.

Video surveillance with remote monitoring will help mitigate your jobsite security risks while maximizing safety and security. You could see significant time and cost savings as the system can help prevent injuries, avert crime, lower liability, and increase construction site productivity.

Investing in Construction Digital Transformation

Obviously, construction companies should not adopt technology for the sake of technology. As you work on your construction digital transformation strategy, ask yourself why it’s worth investing in a specific technology.

“Our philosophy on technology set us up to adapt,” Jack Moran, director of VDC services for Consigli tells Construction Dive. “We have always taken the approach that every time we look at a technology we look at it through the lens of, ‘Is it going to help us build more efficiently, more safely, provide higher quality experience for our owners?’ So, that philosophy helped us to very quickly adapt technologies that we already had to the situation because we always think of them in a very practical sense.”

Advancements in construction technology and automation help workers do their jobs more quickly and efficiently. The right technology can help alleviate the problems resulting from the labor shortage. A construction digital transformation with proper technology could revolutionize productivity while enhancing safety.

Smart construction digital transformation investments can mean the difference between finishing on time without cost overruns and finishing late with cost overruns. If you’d like to learn more about construction security technology, take a look at the free construction security guide or contact us.