The Construction Industry’s Long Journey to Digital Transformation
by Matthew Sprague | June 10, 2021
The construction industry is either heading towards or currently in an inflection point. We have consistently been considered laggards when it comes to technology adoption; other industries have long since undergone extensive digital transformations, but construction has a certain reputation for making do with older, sometimes inefficient tools. This designation is not unfounded, as statistics show that projects typically run 20% longer than expected and cost up to 80% more.
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Solving these problems is not easy. Put aside politics and bureaucracies, you still have a staggering amount of stakeholders on every construction project that would make any manufacturing project manager’s head explode. The challenge is to collectively - as designers, owners, contractors, subcontractors, suppliers and all the permutations of each - take steps forward and drive digital transformation in the industry.
The construction industry is either heading towards or currently in an inflection point.
The good news is the aforementioned inflection point. The impending Infrastructure Bill, which is part of the American Jobs Act, can be the catalyst that forces competing forces to adjust and push in a single direction.
How the American Jobs Act Disrupts Current Construction Processes
Through our 25 years of experience working with owner organizations we have seen singular events like this on a microscale drive digital transformation on a one by one basis. These usually come in the form of major bond awards or local infrastructure initiatives that catapult organizations from managing millions of dollars to hundreds of millions in annual project spend.
But a funding bill of this magnitude has the potential of accelerating the same change experienced by the Illinois Tollway and Pittsburgh Water and Sewer on a macroscale across a much larger segment of the industry. Right now, owner organizations are posturing to present themselves in a way to receive as much of this funding as possible for the projects on their hit lists.
One of the most important things that they need to demonstrate is how they will be good stewards of the funding they receive. How can they prevent being over budget or behind schedule? What process efficiencies are being addressed now so that they are not scrambling at the 11th hour.
Construction productivity growth has remained at 1% annually for the past two decades. Which correlates to the fact that construction, as an industry, ranks 2nd to last for technology adoption.
Illinois Tollway was faced with a $14 Billion capital improvement program, with no viable SaaS tool to help them manage the influx of program dollars. Their story examines how they were able to use e-Builder to successfully manage 1200 firms and 500 construction projects.
Pittsburgh Water and Sewer is using e-Builder to manage their $100 Million capital budget. Here’s their Story.
Technology will need to be leveraged in order to meet the demand outlined in the AJP that emphasizes "the strongest possible accountability and transparency measures to ensure public dollars are invested efficiently and effectively." Funding awards will be predicated on how well an organization is poised to be good stewards of the funding awarded.
Back to the inflection point. This is the event that will define the industry for the next 30 years. Did we accelerate from laggards to innovators or did we remain with the old ways of doing things? I truly believe it will be the former. So many inroads have been made to get us to the edge of the chasm and this is the push that we needed to get everyone moving in the right direction towards digital transformation.
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At e-Builder, we are experts in the construction industry. We’ve provided construction management solutions across industries for more than 25 years and completed thousands of projects totaling more than $1 trillion in capital investment. This expertise gives us unique insights into your world, and we designed e-Builder Enterprise specifically for owners and contractors. We are committed to helping you eliminate difficulties while ensuring that your organization’s specific needs are met. We understand your world. Let us be your trusted partner.
Key Topics Covered: construction management software, Construction Processes, Construction Project Management, digital transformation