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How Construction Companies Can Profit from Digital Transformation


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The rapid proliferation of new technologies in construction in recent years and the pace of change has been something of a system shock to the industry that still relies heavily on paper and pen.

There has been understandable trepidation at all levels about embracing this digital wave. Most especially in the case of automation—the fears of being replaced by a machine weigh heavily. For the most part, the industry’s investment in digitization has lagged way behind other industries. McKinsey cites a 2016 report showing that 70 percent of construction companies devote 1 percent or less of their revenue to technology.

In spite of all that, construction is becoming increasingly digital. By now, most industry insiders have learned the benefits of digitizing operations, but a number of barriers still persist. Fear of the unknown is a perennial factor, as is the concern regarding return on the investment required to implement a new process-altering piece of technology. 

In the short term, these are reasonable worries. Thinking about the long game, on the other hand, digitization has the potential to enable firms to improve their bottom line. It can help minimize waste, boost productivity, and lay the groundwork for the upcoming generation of construction workers.

Many of the gains to be realized center around simplification of needlessly complex processes, helping construction companies save both money and time. Streamlining communication is an area where digitization can have a big impact on a project’s bottom line.

Streamlining communication is an area where digitization can have a big impact on a project’s bottom line.

Construction projects are many-layered, complex entities, typically with multiple levels of stakeholders and decision makers. Changes requiring approval outside the field often depend on email chains, phone tag, or even trips back to the office. Often, this might mean work grinding to a halt until the final decider can be reached. Worse still, an error discovered after the work has already been done results in costly and time-consuming rework. This prospect is particularly maddening when you realize it could have been avoided all together through better communication.

With today’s digital technology, communication has moved beyond simply verbal or text-based variety. A cloud-based productivity platform using shared documents ensures everyone involved is working from the same unified, always-current set of plans. Similarly, unified interactive checklists can indicate whether a new set of instructions has been received and acted upon at a single glance. That’s great for accountability as well as eliminates a lot of guesswork.

Digitization has also eliminated geographical restraints when it comes to project management. Whether the supervisor is on-site or on the other side of the planet, everything they could ever need to review or inspect is now available on any smartphone or tablet, further reducing the possibility for delays or errors. Static paper blueprints are being replaced by digital versions that can be updated, annotated and altered in real time.

Another cost center that frequently vexes firms is supply chain and materials. Waste here can have disastrous effects on a project’s budget or schedule. Digitizing the supply chain helps unify the sourcing process. It thus reduces errors by facilitating communication between firms and materials suppliers and establishing a record of orders and tracking details accessible from anywhere. Controlling and simplifying the supply chain in this way greatly decreases the chance of project delays caused by hiccups in the process.

Moreover, let’s not forget construction firms are contending with an ongoing labor pool generation shift, finding it difficult to attract younger workers to replace retiring baby boomers. This situation is owed, at least in part, to the perception of the industry as a technological dinosaur. Not only will you not have to convince younger workers about a digitization initiative, but you’ll most likely find them among the firm’s biggest champions for the plan.

The digitally native generations stepping up to replace the aging construction workforce are not just comfortable with technology, it is their passion. By creating a culture open to change and newness, generational transition is likely to go smoother. With more tech-savvy younger workers on the company roster, digital transformation efforts are free to thrive and be iterated upon in a collaborative environment of true believers. This will pay dividends in the form of a workforce ready and willing to explore the possibilities of technological advances yet to come.

When it comes to bottom lines, most construction companies face the same general challenges: waste, inefficiency, and poor communication. There’s no one-size answer, but all good technology solutions can be leveraged and implemented in a customizable way so individual firms can address their specific needs.

If you liked this article, here are some eBooks and webinars that you may enjoy:

How Construction Technology is Saving Time, Money, and Jobs

Adapt Before You Fail: Embracing Technology in a Face to Face Industry

Cents and Sensibility: Billing Tech Back to your Project

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