IRVINE, CA—Forty percent of 838 North American construction businesses surveyed this year by Sage Construction & Real Estate do not use technology to attract new business, 35% do not have a dedicated IT person on staff, and half spend less than 1% of their revenue on IT, the firm reports. Yet, there are many reasons construction firms should use IT to conduct their business more successfully, Jon Witty, Sage’s general manager, tells GlobeSt.com.
“These findings confirmed what I already suspected or knew from other data and research around construction,” says Witty.
He explains that the construction market is largely composed of smaller, less-sophisticated organizations that have been passed down from one generation to the next. The earlier generations never used technology, so the later ones never adopted it. “Many of these construction businesses were started by fathers and grandfathers with virtually no IT. It was the quality of their product, their responsiveness and their ability to appropriately estimate and product manage that made them successful, and they did those things virtually without technology except for a set of drawings from the architect.”
Until the recession, many construction businesses still had the mindset that if they were going to make a capital investment in their business, they’d do it in equipment rather than in IT. “The industry operated under that sort of standard in large part until we got into this last downturn in the economy, around 2008-2009,” says Witty. “What opened the door was there were companies that didn’t have to travel and could do their businesses within a day’s drive of where their home office was. But that model blew up. They now had to travel to find work. Once you’re more than a day’s drive form the office, everything changes.”
Suddenly, technology tools because more necessary for construction firms because “they can’t log onto the system that only exists in the office to do some of the clerical stuff that you need to do,” says Witty. “Construction had to take a hard look at using some basic fundamental technology tools like smartphones and tablets. Laptops became pretty expensive once you ruggedized them. There was a paradigm shift driven by an economic need that really caused companies to think differently about mobile technology.”
Still, despite this paradigm shift, 77% of respondents have either zero or only one IT person in their organization, “which confirms the fact that there’s cost avoidance,” says Witty. “They not seeing it. So that leads you to the question of what is going to be the thing that allows the average construction company to take advantage of IT?”
Witty says that simplicity and accessibility are key when marketing technology to construction firms. This points to smartphone apps that don’t require training to use and cloud services that allow for easy accessibility to information by all parties involved in a construction project, from the firm’s employees to the property manager. A total of 82% of respondents find mobile technology most valuable; 45% plan to add more tablets, and 38% intend to add more smartphones.
Another issue is “big data,” which technology allows to be gathered and shared among construction firms and the real estate community more efficiently. “Ninety percent of those in construction don’t understand big data,” says Witty. “The term doesn’t resonate with anyone. But once we can get companies data, aggregate it anonymously in the cloud and run some metrics in it, then we can share some hopefully very good benchmarking statistics with companies from their cohorts in the space. There’s huge potential for it.”
Technology can also provide construction firms with secure documentation and a paper trail for compliance with the rules and regulations that come with the business. But the ultimate convincer is that technology saves time and adds value to construction projects by allowing them to proceed more smoothly, says Witty. “The faster everyone can collaborate to get the job done, the more money you can make.”