The Top 5 Concerns of Mid-Sized Construction Companies

According to a recent study, 85% of project owners in the construction industry are digitizing their internal processes, and 70% are already instructing their contractors and sub-contractors to use digital flows, documentation, and collaboration practices. It is a huge step because the construction industry has not particularly been an early adopter of digital technology. The industry has, for a long time, relied on manual processes and guesswork planning.

However, the industry is undergoing a paradigm shift as customers demand more transparency and visibility into the status of projects, costs, and resources. Companies are now using field-ready solutions to get real-time project insights at every stage of work, streamline operations, and improve transparency.

But more importantly, these technologies are solving many challenges that have stopped the industry from realizing its full potential.

The Top 5 Concerns of Mid-Sized Construction Companies

1. Low Productivity

Research indicates that the productivity growth in the construction industry was 40% less in 2020 than it was in the 70s. The challenge arises because contractors rely primarily on manual work and supervisors to complete the work. Even the technology used is archaic and inefficient. Contractors still use Excel sheets and paper to track and store data. These issues could severely impact the company’s productivity.

According to a 2015 McKinsey study, 98% of megaprojects suffered cost overruns or delays due to a lack of productivity. If productivity improves, the industry’s market value could increase by $1.6 trillion and add about 2% to the global economy.

So, what can contractors do to boost productivity? To begin with, they can digitize the construction workflows to streamline the processes. Digitization can help in optimizing planning, designing, and managing construction operations.

2. Lack of Skills

Despite being human-intensive, skills development in the construction industry remains underinvested. According to two surveys, 80% of residential and 50% of commercial contractors have difficulty filling craft worker positions. To add to the woes, the aging workforce is on the brink of retirement, and the new ones do not find this job lucrative.

Resistance to change is also stopping contractors from introducing technology to the workforce. Unless contractors solve these problems, projects will get delayed, and companies would incur losses. Reducing over-dependency on manual processes can solve this problem. For instance, the automation of manual processes can accelerate task completion.

Contractors must gradually introduce new technologies, communicate the benefits to employees, and train and onboard them to reduce resistance to change and increase adoption.

3. Silos in Data and Operation

Traditionally, teams in construction sites worked in silos. It led to miscommunication between the teams, delays in sharing recent information, and eventually added to project delays. Contractors must find a way to work in collaboration, especially when teams work on remote construction sites. Information exchange and communication have to happen seamlessly, and everybody must have access to it.

Contractors can address this challenge by using technologies like collaboration tools. They can upload documents in a centralized location and share them with all the relevant teams like engineers, on-site contractors, supervisors, etc. The teams can view the data in real-time and make informed decisions. This can speed up the workflow, boost efficiency, and save time managing, updating, and communicating updates to others.

4. Safety Issues on the Site

Workers’ safety is a huge concern for contractors. According to National Safety Council, the cost of injury per worker was $1,100, and a whopping $1,150,000 per fatality in 2017. Safe working conditions and safety training are necessary to prevent untoward site incidents.

Besides that, contractors must also provide digital devices like laser scanners to help workers gather data from the site without risking their lives. A wearable safety device can also help improve safety on site.

5. Delays in Invoice Processing

Contractors have trouble processing invoices on time, which causes issues in regulating cash flows. It could also cause project delays. For example, workers might stop working if they are not paid on time.

Contractors must stop relying on legacy systems like Excel spreadsheets, PDFs, and emails to process invoices. They are unstructured and unstandardized.

Automating invoice processing can help contractors standardize and process invoices to pay all the suppliers, vendors, and workers on time.

The Way Forward

The number of stalled construction projects in the US has gone up 50% as compared to pre-pandemic levels due to various factors like rising costs and labor shortages. Solutions like analytics and automation have helped many companies overcome low productivity and organizational silos and improve safety on sites. Contractors must embrace them to re-imagine their existing systems and processes, streamline operations, and improve business outcomes.

In fact, at CEM, we have built a suite of Construction Management Software solutions to monitor and track progress at sites, manage budgets and revenue, process invoices, and centralize all the project information in one place. We also provide all the tools needed to comply and ensure site safety.

To streamline and accelerate the daily construction tasks, look no further. Book a demo to learn more.