Where Manufacturing Meets Construction
Digital tools have transformed productivity and efficiency in many industries. The construction industry, however, is still some way off the pace when it comes to adopting emerging and mature technology to deal with a shrinking workforce, increased demand, and rising operational challenges.
According to the U.S. Bureau of Labor Statistics, the construction industry is expected to have almost 750,000 job vacancies by 2026. Despite the need for drastic productivity improvements, the construction industry has been reluctant to invest heavily in technology to close existing operational gaps. However, the pandemic has forced some change in this respect. A recent McKinsey report revealed that the pandemic has pushed digital transformation efforts in North America forward by as much as six years.
While this trend is encouraging, it is still important to understand why the industry has held back for so long and what can be done to increase technology adoption in construction. Here are three challenges that business leaders face when trying to introduce technology to workers in the construction sector.
Construction projects require various teams and business disciplines to come together and collaborate to create effective and efficient workflows. Business leaders have increased investment into software and cloud-based solutions that could facilitate information exchange. However, this investment is often inconsistent across business silos.
A report by the Associated General Contractors of America revealed that while 42% of construction firms expected to increase IT investment. A large proportion of this investment would be set aside for specialized office tools such as project management and scheduling software. This creates a divide between the tools that are available to office employees and field workers, potentially creating barriers to collaboration between the different teams.
As technologies mature and customers demand more specialized applications for their specific use cases, business leaders who are new to digital transformation can be overwhelmed by the variety of options available to them. Between best-of-breed applications and bundled services, construction companies are usually locked into a digital transformation strategy the moment they make their first technology adoption decision.
As a result of the saturated marketplace, business leaders in construction have adopted a “wait and see” approach to technology investment. This leads to early adopters gaining a competitive advantage that incumbent construction companies can find difficult to close in the long term.
The labor shortage in the construction sector is a well-publicized challenge that many businesses face. This challenge is usually presented in the context of productivity issues and worker allocation problems. However, a significant side effect of a shrinking and aging workforce is a general reluctance to adopt new technology and accept change.
Fewer than 10% of employees in the construction sector are below the age of 25 and the median age of construction workers is over 42. Changing methods would mean that companies would have to convince workers to undergo reskilling and change the way they have worked for decades. As a result, most workers still default to using outdated communication methods using paper, spreadsheets, email threads, and mobile chat platforms.
Employee buy-in is crucial for any business change and introducing new technology is no different. In fact, employee resistance is the most common cause for business change efforts that fail. Business leaders must avoid this by keeping communication lines open between all stakeholders in a construction company.
Employees who are unaware or uncertain about the need for digital transformation are more likely to resist using the new tools that will become available to them. In fact, companies that maintain high levels of employee engagement are found to be more than twice as likely to succeed in their transformation journey.
This dialogue is particularly important as the construction industry embraces modular construction and prefabrication to deal with increasing customer demand. These benefits should be communicated with internal employees and stakeholders, as well as to external vendors who work on specific construction projects.
With digital transformation being touted as a game-changer by industry analysts, business leaders may feel that it is important to implement a transformation strategy as quickly as possible. This can lead to them skipping some key steps in the planning process. An Everest Group study found that 73% of companies fail to successfully implement new technologies as a direct result of poor planning and a lack of clear goals.
The planning stage is crucial to any construction company as it will define the scope of the transformation, identify the most appropriate solutions, and lays out a plan for future iterations to the existing technology stack.
Technologies that are introduced in the right context, with the right planning, and at the right time can help construction companies improve operational efficiency, increase productivity, and radically improve on-site safety standards. However, each component of a technology stack needs to be consistently and constantly evaluated based on a clearly defined set of metrics.
Business leaders must involve every employee in this evaluation process to find out if the technology is indeed improving their work experience or if it needs some tweaking to perform optimally.
Ultimately, it is clear that emerging and maturing technologies such as BIM, AI, drones, and more are poised to transform the way construction companies operate. To earn the highest returns out of these investments, business leaders must find a way to keep employees engaged and encourage buy-in through clear communication, long-term planning, and consistent evaluation. Using these simple strategies, construction companies can ensure that their digital transformation journeys are unmitigated successes.
Angie Licata is the COO at Ryvit. She’s grown from a product leader, to marketplace VP, to one of the most influential and impactful team members at Ryvit in just 4 short years. Her knowledge of industry ERPs and tools in the marketplace has enabled her to build an expert reputation with some of the biggest names in the industry including SAP Concur, Viewpoint Vista, Procore, and Sage. She’s personally handled hundreds of customer implementations and partner activations on the Ryvit iPaaS, and she’s acutely aware of market trends, technology advancements, and business interests. Angie’s expertise goes deep into the world of product development, integration development, and business management.
