The COVID-19 Pandemic: Fueling Construction Tech
Posted: December 11, 2020 | Tradewinds
From widespread project delays and cancellations to disruption of ongoing projects, many construction pros are happy to put 2020 in the rear-view mirror. Nonetheless, there is one positive take away from the last year: the value of construction technology is no longer up for debate.
Many estimators, project managers, and contractors found themselves leaning hard on technology as they were forced to bid and plan projects from their home offices. Online collaboration tools were a necessity. The Associated General Contractors of America (AGC) survey of contractors last summer found that more than half (52%) of large firms and a third (33%) of midsized firms had increased learning programs with a strong online or video component, such as Zoom or Microsoft Teams.
While some firms went into their lockdowns only to discover they were lacking enough software licenses for their estimators, others found their VPNs were lacking enough bandwidth. Suddenly, everyone was leaning on cloud-based web apps — from email to file-sharing platforms to chat and team meeting apps.
Tech Provides Competitive Edge
For many contractors, economic uncertainty is causing backlogs to slip, and they are facing greater competition on every job. Adding new construction technology may provide the competitive edge many contractors need this year, allowing them to bid and win the most profitable projects. Even before the coronavirus, construction tech was both disrupting and driving change in the preconstruction landscape.
Will 2021 be the year that reverses technology resistance and tight tech budgets? Year after year, the JBKnowledge ConTech survey has revealed the same budget resistance. Whether it’s the landscaping or roofing business, contractors have always struggled to find and justify tech budgets.
In their 2019 report, construction businesses reported spending less than 1% of their annual sales volume on IT (46.7%). Of those surveyed, 51% reported having a dedicated IT department. But these IT teams are small, with 49% of companies maintaining their department size from 2018 with an average of only 1–5 employees (58%).
Even though contractors routinely blow their schedule by 20% and their budget by 80%, contractors have typically only invested 1.5% of value-added technology compared to 3.3% for manufacturing, according to a McKinsey Global Institute (MGI) study. It may be harder for the construction industry to continue underspending on technology by 70% when new digital tech holds the promise of boosting productivity by as much as 60%.
Workflows Still Disjointed
For many contractors, workflows have not been integrated. An FMI/AGC study in 2018 found that many in construction were only innovating around the edges, adopting technology in a very piecemeal approach. They noted that constructionc ould no longer ignore technology trends and continue to do business as usual.
One of the biggest issues has been around the construction industry’s continued reliance on error-prone spreadsheets, which can often be rife with obsolete data or prone to keystroke errors. For example, the 2019 ConTech Report took a deep dive into workflows and found spreadsheet usage had only dropped by 1% from the previous year.
They also found the number of estimators using spreadsheets as part of their workflow increased to 64.9% from 63.2% in 2018; accounting also increased to 53.6% from 51%; project management fell to 44% from 45.6%; and bid management fell to 38.7% from 39.7%.
As COVID-19 spread across the globe last year, many in construction were still relying on a bidding workflow that was a mishmash of emails, spreadsheets, and document management tools. Now, consider everything that goes into bidding — quantity takeoff, gathering material and labor costs, checking vendor qualifications, and clarifying design issues. Can we continue to trust all these project details tos such disjointed workflows?
Technology is the Great Equalizer
For the construction industry to emerge stronger post-COVID, McKinsey predicts a shift to more remote ways of working. They believe BIM and integrated collaboration tools will fuel a drive toward increased digitization.
They cite increased productivity as the driver behind digital tools, digital workflow management, real-time progress tracking, and scheduled optimization. They say there will be increased spending as building systems become standardized, speeding up elements of design and construction.
Of course, construction tech is a broad category. This includes everything from software like digital takeoff and estimating, to online bid board and bid management apps, to equipment like autonomous heavy equipment, drones, and robots. Not to mention cutting-edge tech like augmented and virtual reality and 3D printed buildings.
There is already a myriad of new tech tools on the market, with more being developed as venture capital firms have been pouring billions into construction tech startups. In the first half of 2018 alone, firms invested $1.05 billion.
Step Outside Your Comfort Zone
All trades in the construction industry can expect to be touched by cloud software, mobile apps, and innovative hardware. Though challenging, construction pros need to adopt customizable, integrated tools. As spreadsheets and file cabinets are phased out, those who don’t educate current staff or create new roles to support data optimization may be left behind.
With the right technology, contractors can simplify how they secure reliable subcontractors, complete takeoffs and estimates, and organize their bids. For example, general contractors are finding it more efficient and productive to connect their data via a platform that can send both invitations to bid (ITBs) and handle prequalification of subcontractors.
If you’re ready to take the next step, be sure to check out ConstructConnect’s integrated estimating tools now.
About the Author: Conley Smith is a senior business writer with ConstructConnect. She has been writing about technology and its impact on business for more than 20 years