The construction industry was responsible for employing about seven million people in the US in 2020. However, labor shortages and increased project costs are challenging the status quo.
As per the US Bureau of Labor Statistics, more than 400,000 positions on construction projects were unfilled as of October 2021. And amid a national shortage of specialized labor, contractors also must address issues of increased wages. Analysis shows that construction wageshave risen by nearly 7.9%.
Of course, numerous factors contribute to the rising costs and vacancies in the construction industry. Still, inadequate coordination between the construction sites and the back office is one of the fundamental reasons.
Construction sites generate data around the materials, quantities, human resources, and costs involved in a particular project, while the back office is responsible for planning, scheduling, and provisioning. Synchronizing these two aspects is vital for project success.
But that doesn’t often happen.
Challenges in Syncing Jobsites and Backoffice
Poor job site management and planning are common in construction. Manual interventions, point solutions, and inconsistent data kept in silos erode the ability of companies to deliver projects on time and within budget.
There’s a weak link between the field data and plans, and here’s why:
Fragmentation is high
The presence of contractors, subcontractors, material suppliers, and vendors makes the back office extremely fragmented. Each of them maintains their own systems—and their own data—which is often incompatible with one another’s. As a result, it is difficult to grasp the big picture of a project.
Every construction project has unique requirements, making it challenging for the back office to be proactive and prepare for every eventuality. In addition to that, the job sites themselves have high customization requirements. Due to this, systems are often developed over a broad spectrum of specific requests and lack broad universal applicability.
Workforce turnover remains high across the construction industry. This hampers how job sites communicate with the back office. It makes planning difficult and obscures accountability for who makes what decisions.
Lack of Standardization
Customarily, construction companies work in a federated environment. This means that there are multiple sub-divisions involved at some point on the site, making coordination of all decisions necessary. It also adds to the overall volume of data that needs to be synchronized and integrated with the back-office ERP.
So, are these challenges understandable? Sure, they are. But, are they acceptable considering the utterly competitive construction industry? Absolutely NO! That’s because they set the stage for poor outcomes.
Suppose the job site is dependent on M&E or equipment supplied by different vendors. These third-party vendors need to be integrated with the ERP system, which means they’ll have to be on board with a single point of access to the site. Because that’s not happening, there’s a chance that the vendors won’t be able to follow up on time and might end up not delivering the materials or machinery. Scenarios akin to these add to the overall delays and wasted time.
Businesses are prone to incurring higher material costs than anticipated due to the lack of coordination. Consider the following scenario: a job site is supposed to produce a concrete slab, but the materials at their disposal are insufficient. To address this urgently, the budget must be increased, resulting in avoidable cost escalations.
A construction project is always expected to be carried out in a safe environment, and this is possible only when the back office can keep track of everybody involved. If not, then there’s a chance that job safety will be compromised. Untrained workers, inadequate insight into the material and equipment inventory, etc., make the job site a risky place to work.
Because the field data is not carried back completely or expeditiously to the back office, it may be hard to comprehend how exactly the project is coming along. So, it may be challenging to assess a particular site and its workforce requirements accurately. More granularly, it could make it challenging for the recruiters to conceptualize a bespoke team and ensure that the right people are selected.
How Does Modern Construction Software Address the Problem?
It’s clear that the data captured during the job site should be available to all stakeholders involved in the process. This means that all the stakeholders need to be connected.
That’s where construction software, like that backed by Microsoft Dynamics 365’s prowess, comes in. Its connectivity and scalability strategies, combined with its comprehensive integration features, make it possible for users to access any data they require via an intuitive, user-friendly interface.
An example of the same would be our Applicant Tracking System (ATS) which eases the hiring process and quite literally makes the back office a one-stop-shop. Here’s how:
- ATS zeroes in on the best candidates by implementing custom algorithms that weigh the most important factors for the job description.
- It enables skill-based evaluation by integrating a learning management system (LMS) that empowers recruiters to screen and judge talent based on skill assessments.
- ATS speeds up the hiring process by helping users create custom workflows and automating them – like interview scheduling and onboarding
- Most importantly, ATS user data seamlessly flows into the back office, i.e., the backend ERP, resulting in a comprehensive understanding of resource planning scheduling, how they are used in projects, and the likelihood of delays.
Moving Forward in Synch
To sum up, the back office can never be truly effective without a strong connective link with the job site and vice versa. The best way to integrate the two of them is through construction software that is secure, scalable, and unified.
Liked what you read? Book a demo of our construction solution today to learn more about how we can help you get a better handle on your projects.