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By Erica Konieczny
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Due to the size and scope of their operations, owners of large construction firms must navigate a tumultuous maze of industry regulations, international laws, and a host of other socioeconomic issues. While smaller construction firms usually only have to worry about complying with local city ordinances, owners at large firms must instead work with a much broader set of rules, standards, and obstacles.
Mergers and acquisitions in the construction industry landscape surged in 2014, with 218 deals worth more than $50 million each, and $172 billion in total deals. As rivals combine to form mega corporations, many large construction firms are being forced to either acquire or merge with another company to scale up operations, integrate vertically, or take other steps to compete with other companies in the sector.
With so many deals conjoining companies that were previously competitors, owners at firms undergoing a merger or acquisition must be able to ensure that all operations remain streamlined and communications between new divisions or departments are not falling through the cracks.
As employees shuffle around, departments divide or merge, and new goals and business plans come into effect––owners at large construction firms need to make sure everyone is communicating effectively and thoroughly. By utilizing a cloud-based construction project management solution, large firms can store all communications and messages in a repository that can be easily accessed in real time from any mobile device.
The construction industry has become more diverse than ever, and large firms in this sector must do their best to retain an eclectic workforce, especially in the C-Suite. The U.S. workforce is becoming more diverse with each passing year, and owners at large construction firms need to ensure their employees reflect the shifting demographics. This will entail inclusion of more females, minorities, and foreign-born individuals in the company's workforce.
As Construction Executive noted, one of the key indicators of success on a global scale involves having a more inclusive staff. A diverse set of employees creates a unique set of experiences, perspectives, and viewpoints crucial for the true outside-the-box thinking that drives the overwhelming majority of innovation. Without a diverse workforce, large construction companies are unable to keep pace with their industry peers, which could ultimately lead to a marginalization of the company and subsequently to a contraction in operations.
Large construction firms must be able to easily maneuver through a host of local, national, and international rules and regulations, any of which can ultimately derail a project and lead to significant losses. In the current economic climate, many large construction firms are looking overseas for growth opportunities.
As ACE Group noted in "Global Construction: International Opportunities, Local Risks," the extraterritorial scope of legislation and rule of law in countries outside of the U.S. poses a unique challenge for construction companies. For instance, while most western nations have established employer duty-of-care legislation, the majority of the emerging-market countries where large construction firms have trained their sights do not have these same types of regulatory precautions in place.
While emerging markets are poised for major growth in the coming years, international construction firms must be able to not only build up the best supply chains in foreign countries, but also be able to compete with local competition that can undercut prices. Where a local construction company might be able to offer lower costs, larger construction firms need to demonstrate how they bring higher-quality products to the job, as well as a dearth of valuable information about how to best complete the building and truly make the most out of the project.
Due to the myriad obstacles facing large construction firms entering the global market, it's imperative that owners map out a proactive risk management strategy that addresses the full spectrum of potential problems that arise in a typical international construction project. This includes obtaining the right licensing, insurance products, workers in the local area, and ensuring all domestic fronts are covered.
With new software and apps released every day, now, more than ever, owners at large construction firms need to stay abreast of the changing technological landscape. For instance, by implementing a cloud-based construction project management solution, executives at large firms can easily keep tabs on every single job, both past and present, with real time access to all the RFIs, punch items, subcontractors, and pertinent data necessary to gain both a micro and macro view of the project. Since the software is cloud based, there's no digital infrastructure to install, saving construction firms time, money, and space. This also helps owners view all of vital project information from their mobile device, rather than wasting time hunting for documents when in the field.
See how Procore construction software helped Turner San Diego:
The Anatomy of a Request for Information (RFI)
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