Labor Shortage and Tech Adoption Hold Industry Back
Governments and civic owners are increasingly leveraging technology to address critical infrastructure needs but construction is slow to adopt, says Bill Smith of PlanGrid in this EXCLUSIVE.
SAN FRANCISCO—While real estate and construction continue to lag other industries when it comes to adoption, governments and civic owners are increasingly leveraging technology to address critical infrastructure needs. In this exclusive, Bill Smith, president of PlanGrid recently discussed slow adoption, challenges and tech’s role in the labor shortage.
GlobeSt.com: What are the biggest challenges in the construction industry today?
Smith: Collaboration has historically been, and unfortunately remains, a major challenge. Construction projects involve many stakeholders and responsibilities, and there are constant changes to be accounted for across jobsites. Miscommunication is inevitable when there are no systems or tools in place that provide access or a way to communicate changes in real time. As a result, we see a need for rework and timeline extensions, which add to a project’s overall cost. On average, large infrastructure projects cost 80% more than budgeted and run 20 months late, according to IHS Markit. From a high level, productivity of the entire construction industry suffers. Additionally, the shortage of skilled labor and slow technology adoption are also big issues holding the industry back.
GlobeSt.com: How can the industry address and overcome these challenges?
Smith: Ideally, construction productivity technology is coupled with integrated project delivery/IPD, an innovative approach that gets to the heart of effective collaboration for the construction industry. With IPD, project members, owners, contractors, subcontractors, architects, engineers, managers, etc., create a mini team with representatives from their disciplines. All stakeholders operate under the same contract so the entire project team is incentivized to work with the same goals in mind: the efficient completion of a project. IPD and technology that addresses productivity are complementary since both get everyone on the same page. When project teams can communicate, collaborate and contribute with access to real-time information, many of the traditional problems construction projects face, such as miscommunication, rework and schedule overruns, are drastically reduced.
GlobeSt.com: Can technology and IPD address the labor shortage?
Smith: The construction industry has some of the lowest profit margins of all industries. In trying to meet increasing construction demands with limited resources, the industry hasn’t been able to invest as much in technology or recruitment and retention. The irony is that by adopting technology and employing IPD, owners, GCs and subs alike are able to maximize existing resources and do more with less to combat the labor shortage.
As I mentioned, technology is an important tool for attracting and retaining talent. Several of our customers and partners recently noted at a PlanGrid construction summit that top talent and recruits expect construction firms to have effective technology solutions in place. Innovative approaches like IPD and deploying robust software give construction firms a competitive advantage.
GlobeSt.com: How do you think technology and IPD can fuel the future of construction industry growth, beyond addressing some of these immediate issues?
Smith: Combining cutting-edge technology and innovative management methods with the strengths of traditional operations such as project-wide blueprint sharing and ongoing site surveys can help meet construction demand. Over time, we’ll see new capabilities and efficiencies crop up. For example, we just announced integrations with tech companies that develop drones and 360-degree cameras. Looking ahead, we’ll see more emerging technologies such as machine learning, IoT, AR/VR and 5G, as well as more insightful and predictive analytics for management and planning. It’s all in the name of productivity─making collaboration easier and empowering firms to save more time and money.
GlobeSt.com: Why is this the best time to solve the industry’s challenges?
Smith: The industry is at an inflection point. With the proliferation of mobile devices, the maturity of the cloud and emergence of IoT technologies, the industry finally has the option to deploy enterprise-quality mobile software that the field loves to use. It’s a very exciting time to be in construction.
The time is ripe for us to change and it is incumbent on the entire industry─commercial sector and beyond─to optimize resources and strengthen infrastructure quickly and cost effectively. Promisingly, we are seeing large commercial projects such as the Las Vegas arena, Comcast technology center and others recognize the opportunity for innovation and taking the steps to address industry challenges.
The civil sector, an important proxy to the commercial sector, is also showcasing a promising outlook. In 2017, the American Society of Civil Engineers provided the US a D grade for its infrastructure─revealing that our infrastructure is unhealthy and showing vast opportunities for improvement. Our recent growth in the heavy civil segment indicates governments and civil owners are increasingly bringing technology on board to address this opportunity. As additional segments do the same, the construction industry at large is poised to achieve needed productivity growth.
Prior to joining PlanGrid, Smith was a group vice president at Oracle and a group vice president at Taleo Corporation.