Learn about the first true Cloud service that enables seamless exchange of key data and documents between GCs, their networks of trade contractors and their venture partners. Presented by Oliver Ritchie (CMiC), Steve Cangiano (CMiC) and Keith McIntyre (GH Phipps).
Project controls in the digital age.
You’re sitting in your office one day when you get a call from an engineer on your team. A new interpretation of a building code forced the team to change plans for one of the basic house blueprints you use as a foundation for a variety of projects. Suddenly, you’re looking at a logistical and communications nightmare, unless your document and content management systems are up to the task.
Digital document management technologies have the potential to resolve a variety of operational challenges, and document management that is embedded into ERP systems is particularly advantageous. With this in mind, here’s a quick look at why advanced document management capabilities are so critical and how you can get a system off the ground.
Understanding the role of document management
According to a Construction Executive report, businesses need digital document management systems that empower collaboration because the solutions allow users to interact more effectively and comply with regulatory standards more easily.
Let’s revisit our introduction scenario from this point of view. When an engineer calls, saying you need to update an essential plan for code compliance, you are forced to launch a variety of processes, including:
- Replace every existing version of the older blueprint with the updated version
- Identify which active projects are using those plans and get site managers revised plans
- Update marketing and sales collateral to reflect the new base blueprint and drawing relative to the change
It isn’t enough to update your primary source blueprint; you need to get the revised version out to all of your relevant teams. If you’re using paper records, this means printing, photocopies, courier trips out to project sites or field workers making extra visits to the office. The costs, delays and potential for project setbacks escalate quickly.
With digital document management, you make the backend change and ensure the apps and services that users rely on automatically pull from that source. As such, all you need to update is the digital source file; all your teams get automatically notified about the revised plans.
Establishing digital document management
Transitioning to a digital strategy may seem overwhelming, leaving you worried that you’ll have to scan lots of paper files. But think about it:
- Your engineers are probably working in CAD systems already
- Your field teams are relying on smartphones and tablets
- You are likely in a situation where the business is becoming natively digital
In many cases, companies are actually putting a great deal of effort into sustaining paper-based systems because they want to avoid the initial disruption of going digital. Don’t wait. You can keep some legacy drawings and blueprints in paper format if you need to, but take the time to scan what you use regularly and start leveraging your digital source files as soon as possible to begin a transition.
The real key to getting document management plans off the ground isn’t so much about going digital, but about organizing and distributing files in such a way that the system is sustainable over time.
Sustaining a digital document ecosystem
Digital document management strategies often fall apart when users have to jump into specialized apps or file sharing systems to get the information they need. The extra clerical work—even when it’s easier than dealing with file cabinets—leads to operational overhead. Integrating document management tools into your ERP platform—or better yet, deploying an ERP with embedded document management capabilities—builds access to all content assets into day-to-day processes.
The CMiC construction ERP includes ‘native’ content management capabilities, allowing your employees to integrate files into workflows, easily search your database and enact controls over assets. Furthermore, document management tools are extended out to CMiC’s field-specific solutions, providing integral connectivity between the office and project sites.
Digital document management can be transformative, and ERP platforms with embedded document management capabilities ensure that construction firms can maximize the value they receive from new digital technologies.
Outdated or ill-fitting enterprise resource planning systems can undermine growth in the construction industry. ERP limitations can leave you scrambling to keep up with projects while your business is trying to operate in a chaotic environment.
There are many indicators of when your ERP platform may be struggling to stay apace of operational demands. In part 1 of this series, we discussed a lack of scalability as a key sign that it’s time to consider a new platform. We’re back with part 2, and we’ll be exploring how manual document management processes can slow your workflows to a crawl and create confusion.
Documents and Workflows
Every business has workflows. A workflow is simply the collection of processes that are completed to handle a task. For example, requesting supplies for a project is a fairly simple task, but becomes complex when manual documents get involved. A typical workflow may look like this:
- A project manager begins by looking over work orders and analyzing the necessary supplies relative to available inventories.
- Upon identifying a need for a new order, the project manager submits a request to a supervisor, often the owner or project head in a small organization.
- From there, the leader identifies if the order is truly necessary relative to the scope of the project and, upon approval, sends it to whichever stakeholder is in charge of completing orders.
- With the supply request in tow, the purchasing manager analyzes budget information and reaches out to vendors for quotes on price and delivery.
- Once a final decision is made, the purchase order is completed and sent to accounting, where it often goes through manual filing systems to be logged as part of the project.
- When the goods arrive, the order is set as fulfilled, and new invoice and payment workflows begin.
A workflow as routine as ordering supplies can go through multiple teams, requiring a variety of forms that need to get to the right person at the right time. Even if you give managers more authority, letting them purchase goods at a hardware store and get reimbursed (simplifying the process), you are still dealing with a paper trail into which stakeholders need visibility.
An ERP Focus report explained that enterprise resource planning systems specialize in enabling organizations to establish regular workflows and automatically enact them when needed.
In the case of a purchase request, the forms would be digitized and passed between users within the system once each step has been completed. Vendor and inventory management modules can even be set to automate notifications when supplies are low or when a vendor has an especially good offer on an item you need.
In the simplest terms, the ERP solution provides an avenue for eliminating manual processes and creating transparency, ERP Focus explained. This functionality is especially vital for construction companies trying to keep up with a multitude of simultaneous, complex projects that change frequently.
Using Digital Technologies for Document Management
While our hypothetical example focused on a purchase order, the highlighted workflow could have included analyzing work orders, filing invoices and completing sales contracts with vendors. When all of those documents are filled out and handled manually, the chance for error increases exponentially.
If your ERP system is leaving you chasing down paper records and filing out forms, it’s holding your business back. What’s more, a study from JBKnowledge created in association with the Mechanical Contractors Association of America and the Texas A&M Construction Science Department found that many builders lack the IT budgets and staff they need.
With paper-based workflows holding businesses back and legacy systems requiring manual reconciliation of information, a new approach is required. Cloud-based ERP platforms with ’embedded’ document management capabilities can enable specific workflows that are essential to planning, approving, staffing, running, monitoring and closing out construction projects while eliminating the integration and maintenance burdens on IT resources.
At CMiC, we’ve purpose-built our ERP & Field platform for construction—including fully unified document manage capabilities—so you don’t have to spend time, energy and money trying to make a ‘generic’ ERP fit the way you run your business. In addition, our solution is simple to deploy and to configure to support your unique workflows.
If you’re interested in learning more about how construction-focused ERP & Field technologies can transform your business, stay on the lookout for part 3 of this series. Next week we’ll explore how a truly unified platform can inject transparency, agility and speed to your budget forecasting process.
This post is part of the CMiC blog series where we explore terminology that every construction leader should know. Check out the previous post in this series to learn the most important terminology in cloud construction software.
ERP has become a major differentiator for successful construction firms in recent years. Leaders with access to the strongest solutions can act faster and more precisely than if they were using less advanced platforms. For example, many of today’s ERP solutions are built to augment and automate job costing, budget creation, change order management and many more crucial workflows.
ERP solutions are evolving all the time, and it can be difficult for construction leaders to keep up. To make matters worse, some firms and ERP experts use software terms in different ways or use several terms for the same idea. To help you make sense of product features, developer claims and software categories, we’ve created this glossary of ERP software terms. Think of it as a cheat sheet to help you during product demos and vendor meetings. But first, let’s introduce ERP:
What is ERP?
Enterprise resource planning software (ERP) is a suite of business management tools that collect, manage and interpret data. They’re built to offer a consistent view into crucial business dealings and often include the following features:
- Real-time data tracking
- Financial forecasting
- Worker and supply scheduling
- Communication tools and storage
- Management dashboards
Some ERP solutions are built for a specific industry and will include specialized tools to save time on common industry tasks.
To learn more about the general benefits you should look for in ERP, check out 3 On-site Benefits of Unified ERP Software.
An Application Program Interface. Open APIs give developers programming access to a software application, allowing them to develop integrations for connecting the application other software. Twitter, for example, has an open API that allows developers to create separate applications for scheduling tweets
A more casual term for describing software integrations. When connecting two pieces of software that were created by different developers, software vendors or IT managers will build bridges between the applications so that they will share information. Before you purchase, it’s important to understand the risks of bridged construction software.
BYOD (Bring Your Own Device)
When construction companies want to encourage the adoption of mobile tech, they often ask employees to use their own devices. These devices can be set up with self-service access portals to business systems and help businesses cut hardware costs and improve employee engagement.
The process of communicating the effects of an upcoming change to everyone in the organization and designing training and educational programs to ensure the change happens smoothly. Because implementing an ERP platform is a dramatic change that affects so many people, effective ERP change management is crucial during an ERP implementation.
Allows companies to store their data on off-site servers that they connect to and access over the Internet. To store data in cloud databases, business rent storage from companies offering cloud computing services. Many ERP vendors now offer cloud ERP options alongside local software licenses.
Project and company data that is all stored in a single database. Consolidated/centralized data creates more efficient workflows by giving all team members access to accurate, up-to-date information.
A user-interface that integrates key business information, such as KPI’s, in a graphical and easily accessible manner. Dashboards in ERP are often role-defined and customizable.
In ERP, flexibility refers to the relative ease with which a system or program can be adapted to accommodate a changing business environment or new business model.
The spectrum of tasks that a computer program or ERP system can perform.
Hardware versus Software
Hardware refers to the physical computer, device or machine; software is the computer code for a program, operating system or application that instructs that hardware to perform certain tasks.
For example, the CMiC platform is a piece of software, and the servers that store all the data stored within the CMiC database are examples of hardware. Cloud computing has reduced the amount of money companies spend on hardware because instead of purchasing expensive servers, they can store all their data on an off-site server that they pay for on a subscription plan.
The process of combining all business software into a single, whole system. This often involves connecting a software application with limited functionality, to a larger full-service ERP system.
To store data, companies use either an internal network or a cloud database. Internal networks require construction companies to own their own hardware. This gives them the most control over their software and security but requires significant upfront and ongoing costs including hardware installation, electrical bills, the cost of server real estate and salaries for IT staff.
Cloud deployments are typically more flexible in terms of cost, offering pay-as-you-go payments that scale with your business. They may also make data easy to access with in-browser login capability.
Want to learn more? Benchmark your software against the industry standard with our free ERP E-book.
A cost methodology in which all the costs associated with a specific project or manufactured product are recorded in a cost ledger over time and totaled at the end of the project or manufacturing process.
KPI (Key Performance Indicator)
Key performance indicators are measurements of job performance. For example, revenue is a KPI of sales, inventory is a KPI of supply chain management and profit is a KPI of business leadership. Ideally, all KPI are aligned around an organization’s strategic objectives.
Legacy Systems (or Applications)
The term “legacy systems” refers to computer programs written specifically for a single organizational function, before the days of integrated software or ERP systems. Legacy systems tend to be highly customized and can be difficult to maintain.
“Nervous” in the ERP world, is a term used to describe daily or hourly variation in data as it changes in response to real-world occurrences. People unfamiliar with real-time data and integrated systems are often uncomfortable with a constantly changing picture and prefer working with static data that may be inaccurate.
Point Solution AKA Stand-Alone
A point solution is a software application built to solve a specific problem or manage a specific department (ie. project management software, accounting software, blueprint sharing apps, etc.). When a firm’s software system is entirely made up of point solutions, they end up with a “best-of-breed” solution instead of a “unified” or single-database solution.
Scope creep refers to the unintended expansion of the project deliverables and specifications after the client and construction company have already agreed on a scope of work.
Most frequently, “unified” refers to a single-platform solution with a suite of tools for managing all core business processes. CMiC, for example, includes a variety of tools that are natively built to work together. As a result, the CMiC platform offers a single, reliable database through which all data can be found.
Sometimes, “unified” may be used interchangeably with “integrated” to refer to the bridging of several applications. For a full breakdown, check out our blog Making Sense of Construction Software Jargon: Unified, Stand-alone & Integrated.
Workflow management is the process of controlling, communicating, and following up on a human approval chain with the intent of making it more efficient. Workflow management is typically used for processes like product adoptions or policy change approvals.
The construction industry has been known to lag behind when it comes to tech adoption, and there are still many leaders that remain loyal to old and inefficient workflows. Firms may resist adopting new technology because they don’t see the immediate benefits of a digital transformation or because they want to avoid the risks associated with a large upfront investment. Whatever the reason, they’re missing out on the benefits that intelligent software can bring.
One area of operations that has been transformed by software technology is document sharing. The importance of document sharing has skyrocketed in recent years, as projects grow larger and more complex. Today, construction firms struggle with more documentation and data than ever before at the same time that stakeholders are demanding increased transparency and more frequent communication. This combination makes it essential for construction companies to streamline their document management strategies.
Most construction companies have digitized their operations and rely on some form of digital document sharing. But, just because something is digital doesn’t mean it’s efficient. For example, sharing digital documents via email can be time-consuming and confusing, causing serious approval bottlenecks. Construction leaders receive a never-ending carousel of emails with new tasks of equal importance that demand attention. It only takes one overworked executive with an inbox full of emails to bring operations to a screeching halt. And when stakeholders are forced to sort through a thread of 15 emails to find the information they’re looking for, they can become frustrated and unresponsive.
The alternative to this antiquated form of document sharing is a central database where team members can access, edit and approve documents within a single application—making it easier for executives and stakeholders to give approvals and keep projects on schedule.
Multiple Document Versions
Version control is one of the most important and difficult aspects of document sharing. Most documents in construction are created collaboratively, and as team members make their additions and changes, many new versions of a single document can be created. Depending on their system for naming, storing and sharing document versions, firms can easily run into issues where team members aren’t sure which information to trust or what project details are the most up-to-date.
Construction ERP software eliminates the hassle of managing multiple document versions. Software like CMiC’s platform allows teams to make and store all changes within a single document. With traditional systems, you never know if changes were purposefully overwritten or simply lost among the many versions of a given document. But with an ERP software built for construction, a history of edits is recorded so that all parties can see exactly what changes have been made. Having a reliable version of all project documents lets project managers and subcontractors do their best work in the field.
Rekeying errors can not only cause minor project hiccups and small profit losses but also lead to major disasters. They can happen anytime workers are manually entering data, but there are a few areas where rekeying errors are especially prevalent:
Writing Down Data in the Field
It’s common for subcontractors to write down notes on paper when they’re in the field. Unfortunately, with pen-and-paper record keeping, it’s easy to jot down incorrect information or write illegibly. Something as simple as an in-office worker mistaking a “1” for a “7” can result in ordering insufficient materials or over-purchasing. Entire construction projects can be impacted by simple errors made while taking and interpreting notes from the field.
Copying Data from One Software System to Another
Rekeying errors are common when a firm uses multiple software systems. If for example, a firm has two separate systems for project management and accounting that aren’t properly connected, workers will be forced to manually copy data between applications. This requires massive amounts of manual data input, which can easily lead to incorrect and conflicting data.
The good news is that advanced software tech can virtually eliminate errors caused by rekeying when data is stored in a single-database platform. With a single source of truth, project data is accessible to all applications within the ERP system and documents are auto-populated with relevant, up-to-date project information.
Internal Network Instead of Cloud Database
Traditional data management strategies use an internal network drive to store crucial data. There are some advantages to this system (especially when combined with an advanced single-database platform), but it’s important to consider the alternatives. For many firms, a cloud database is the best option.
Firms with outdated software and an onsite network drive may find it difficult to share data with key players. Here’s why: Team members must log in to the internal network every time they’re looking for data. If employees aren’t in the office, they’ll have to use a remote desktop login or some other workaround to access the documents they need. In contrast, cloud systems make the process of accessing documents faster and easier, especially on the job site.
Is your firm looking for a better way? Learn how to solve your firm’s most common issues with our blog series on ERP Solutions to Common Workflow Challenges.
Cloud technology has become extremely popular in the last couple years, especially for corporations and enterprises. One of the main reasons the cloud has been so successful is because it allows companies to reduce IT costs and free up valuable resources.
Most enterprises utilize cloud technology to some extent, but many aren’t tapping into the full potential of the cloud. Whether you already work with a cloud platform or are looking to make a change, it’s important to know what options are out there. These terms will help you evaluate your current technology and identify any emerging cloud solutions that can help you improve operations.
For many people, the cloud is an abstract concept. They have vague ideas about the purpose of the cloud but don’t fully understand how it works. Let’s clarify: the cloud is a remote network of servers. Users connect to the cloud through the Internet to store, manage and process data. There are many different companies that offer cloud services, and it’s those companies that own, manage and maintain the servers where the data of their customers is stored. Quite often, the remote servers owned by cloud companies are located on server farms: buildings that can house and power thousands of servers.
A cloud provider is a company that offers cloud services. They own a series of remote servers for storing the data of their customers. Many cloud providers are tech companies that provide other products and services in addition to data storage. For example, CMiC offers cloud services, but this is an offshoot of our main product: unified construction software. By pairing cloud technology with our ERP construction software, CMiC users can access data remotely, in real-time and within one, central database.
A vertical cloud is built to accommodate data storage needs specific to a particular industry. In general, vertical and horizontal are used to describe the ways that customers are targeted in a specific market. Horizontal markets target customers with a broad range of wants and needs, while vertical markets are much more niche and focused. For example, healthcare organizations, financial services providers and government agencies must adhere to regulations around storing, managing and protecting client data. Vertical cloud solutions built specifically for these industries will have high-level security protections embedded in order to protect patient information.
The opposite of a cloud solution is an on-premise solution where physical servers are housed within a company’s offices. Some construction firms prefer on-premise deployment because it gives them control over their own hardware, without having to rely on external IT support.
While they may provide greater control, on-premise solutions come with a higher cost. They require a significant upfront investment and have ongoing maintenance costs, such as:
- Cost of the physical building space where servers are housed
- Electricity costs for running servers 24/7
- Software licensing fees
- Salaries for IT employees to maintain servers
Cloudsourcing is the outsourcing of data storage to a third-party provider, rather than using the traditional IT approach for data management (on-premise solutions). The traditional approach requires companies to purchase, house and maintain their own servers, which can be costly and labour intensive. Cloudsourcing, on the other hand, allows companies to use remote servers on a subscription basis. They pay for only the storage they need and can adjust their subscription plan if these needs change. This flexibility allows businesses to scale more easily and with less financial risk.
Middleware is a piece of software that acts as a bridge between applications and/or operating systems. For example, a construction company that uses one application for project management and a different application for financials will need middleware to connect these two applications so that they can share data.
The use of middleware is still widespread, but it comes at a significant cost: using more than one application for operational tasks creates a more complex IT network. In addition, the middleware connecting applications may have limited functionality or may not function properly. When middleware isn’t working, it stops the flow of data between departments and slows down operations significantly.
The alternative to using middleware is to implement unified construction software. Unified ERP platforms have multiple applications that are all connected to one database. No middleware is required, and data flows freely between all applications.
A public cloud is accessed via the Internet. Users of the public cloud can upload or download data using an Internet connection. There are many security protections in place so that data stored in a public cloud is only accessible by the organization. For example, all your emails are stored in a public cloud, but only you are able to access this data.
A private cloud is accessed by using an intranet, instead of the Internet. An intranet is a private network that is only accessible to an organization. Data is still stored in an off-site data centre, but it is accessed through a private network. Private clouds are a more expensive option than public clouds, but they offer greater security for organizations that need a higher level of protection.
Looking for more information on cloud technology? Learn 4 ways that cloud-based construction software helps construction companies scale.
Several weeks ago, the United States was hit with a series of tropical storms that caused extreme destruction and mass evacuations. It’s estimated that together, Hurricane Harvey and Hurricane Irma caused $290 billion in damages. Harvey accounts for the majority of this figure: the rebuild is expected to cost $190 billion, making Harvey one of the costliest weather disasters in U.S. history.
In the wake of these disasters, a new reality has been made apparent: We’re entering an age of increased risk from extreme weather events. For an industry as susceptible to weather as construction, this is not good news.
By its nature, construction is dependent on weather. Project planning and design are determined in large part by the landscape, geography and local weather. Building strategies and materials are tailored to suit a particular climate. And of course, construction teams work outside. In addition to the effects felt by citizens and residents, extreme weather events can derail projects, endanger workers and increase construction costs considerably.
Because weather is becoming more extreme and less predictable, it’s important for construction firms to develop strategies of resilience. But first, we have to know what we’re up against. Here are 4 ways that climate change and extreme weather are impacting the construction industry.
1. Labour Shortage
Even prior to Harvey and Irma, the construction industry was already experiencing a shortage of skilled labour. There are countless theories as to what has caused the labor shortage: early retirement, low wages and fewer young people interested in entering the field — to name a few. Whatever the reason, construction labour has been hard to come by. After Harvey, the shortage is likely to get worse, with approximately 91% of contractors worried about finding skilled workers. With more extreme weather comes more destruction to infrastructure, homes and commercial buildings. An increase in demand will provide an economic boost to the industry, but only if contractors and firms can find enough workers to fill vacant roles.
2. Unusual Weather Conditions
Many construction firms have grown accustomed to the weather patterns and climate within the areas they do business. Through experience and data gathering, they’ve developed strategies for ensuring that inclement weather doesn’t threaten a project’s success. Unfortunately, climate change has caused weather to become much less predictable. Across the globe, regions are seeing unusual weather patterns that are atypical. In 2009, for example, London, England experienced the worst snowfall in almost 20 years. The city was ill-equipped to deal with the snow and it’s estimated that this disruption cost them billions in snow removal, lost revenues and emergency services. When construction firms become unable to predict weather patterns and develop emergency plans for weather variables, it puts their entire business at risk.
3. Equipment Damage & Efficacy
Unusual weather conditions can also throw a wrench into a firm’s procedures for caring for equipment and preventing weather damage. Weather can affect the performance and wear and tear of construction equipment. Dry weather can increase the amount of dust on the job site, which can jam and clog machinery. Strong winds can strain equipment and cause breakage. And hot weather can reduce the efficacy of materials like sealants and mortar. Most firms have protocols in place for preventing weather damage, but those procedures are location and climate dependent. As weather patterns shift, firms may not be familiar with the procedures for caring for equipment in more extreme conditions.
4. Materials Scarcity
Extreme weather makes construction materials harder to source and purchase. Drought, flooding and storms can cause scarcity, which may drive up cost or prevent materials from be obtained at all.
For example, flooding in areas where natural resources are being extracted can cause a shortage in the raw ingredients used to make construction materials. In contrast, drought can prevent construction sites from getting enough water to complete vital tasks. A phenomenon like erosion can create shortages of materials like sand, which is used to make concrete and asphalt and is becoming hard to source.
The good news: material scarcity creates an opportunity for developing innovative ways to meet the materials needs of construction projects. Recycled materials and the circular economy are two ways of lowering the impact of construction material extraction on the planet and reducing industry dependence on depleted resources.
Conclusion: Building Resilience
These are just some of the ways that climate change can threaten the success and security of the construction industry, but there are more. In light of these threats, it’s important for firms to develop strategies for handling extreme weather.
One of the best ways to build resilience is to improve the efficiency of your firm’s planning and communication procedures. That way, when extreme weather events arise, you’re organized enough to deal with the emergency effectively. This can be done by using construction software to run a tight ship – a ship that’s better able to weather storms both literal and figurative.
Construction software will create company-wide transparency with regards to financials, scheduling and project planning, ensuring that everyone has the information they need to rearrange work, adjust budgets and ensure employee safety.
To learn about all the ways that construction software reduces risk and safeguards firms’ futures, check out 5 Risk Factor Solves with Advanced ERP.
Mavin was looking for a flexible and scalable software platform that would eliminate the need for disconnected software packages. The limited scalability of the Sage product forced Mavin to store data in Microsoft Excel and Word. CMiC’s ability to integrate the field and the back office with real-time information differentiated it from the rest.
Construction is an economic powerhouse. This $10 trillion-dollar industry accounts for a large portion of the global economy and is expected to get even bigger this year, growing an estimated 3.5%. Sure, these numbers are impressive, but there are other statistics that tell a different story. For example, 90% of infrastructure projects around the world are either late or over budget.
It’s clear: the construction industry has a productivity problem.
While other industries have become more efficient and productive, construction has remained stagnant. According to a McKinsey report on construction productivity, the industry has failed to keep up with the global averages for productivity growth. Over the past 20 years, global productivity has grown by 2.8%. By comparison, manufacturing productivity has increased by an impressive 3.6%. The construction industry, however, has only grown by 1%.
McKinsey explains that what’s needed is a productivity revolution: a massive transformation in the way the industry utilizes technology and standardizes mass-production. If construction can adopt new operational strategies, there’s a lot to be gained. Just by catching up to the global average for productivity growth, the industry could grow by an estimated $1.6 trillion and add 2% to the global economy.
That’s some serious incentive for solving the industry’s productivity woes. But how can construction change its ways and revolutionize its practices? The first step is identifying the sources of poor productivity.
Always Preparing for the Next Recession
A recent Economist article says the productivity challenges faced by construction companies today are caused in part by a lack of investment in capital goods. Quoted in the Economist article is consultant Luc Luyten: “The industry has learned through bitter experience to prepare for the next recession.”
Many construction companies are afraid to invest in advanced technology or equipment because they’re afraid that if construction demand takes a dive, they’ll have difficulty scaling down operations. As a result, firms tend to invest in human labour over tools for automation, despite the high cost of labour in many parts of the world.
The fear of unexpected economic downturns has also impeded the industry’s adoption of technological solutions. According to the McKinsey report discussed above, construction is the least digitized industry in the world (in the US, it’s second last).
“While we are all using iPhones, construction is still in the Walkman phase,” says Ben van Berkel, an architect quoted in the above Economist article. And in fact, many of the tools and practices used by the industry aren’t even as high-tech as the Walkman. For many years, technology simply couldn’t compete with the convenience and simplicity of paper. But today, the opportunities afforded by digital technology are far superior to anything paper can offer.
It’s for this reason that CMiC recently partnered with PlanGrid to provide our customers with access to digital building plans. By using PlanGrid and CMiC together, construction teams can access construction drawings on their mobile devices, collaborate in real-time and flag issues on the job site by snapping a photo and overlaying it on the PlanGrid blueprint. Most importantly, CMiC is a single platform, meaning that data entered into PlanGrid and data entered into CMiC applications are stored in one database. With central storage, teams can trust the accuracy of the data and communicate and share information more easily.
This is one example of how investing in capital purchases like construction software can improve the overall efficiency of a company, which in turn will impact the entire industry.
Customization vs. Standardization
Construction also faces many challenges when it comes to standardization. For enterprises to do business on a large scale, they’re required to replicate their processes, products and designs across markets. A company producing cars, for instance, can’t design a completely new car for every country it sells in — this would be too complex and costly. Instead, that company creates only a few different models of cars and replicates this design over and over, allowing for mass production.
But for the construction industry, it’s difficult to replicate projects in different regions. Building codes, regulations and the cost and availability of materials vary significantly depending on location, making it difficult to apply a single design to projects around the world. As a result, many construction firms are forced to create custom designs for each project.
While building location variables pose challenges to standardization, there are still ways for companies to standardize. Exploring pre-fabrication or module opportunities is one option. Firms should also look at how plans can be adapted for different requirements. It’s better to adjust existing building plans to address project constraints than to completely start from scratch.
The High Cost of Rework
When it comes to lagging productivity, one of the biggest culprits is rework. Whenever construction work has to be done twice, it wastes time and money. Rework can also become a vicious cycle. If a project is going over schedule because of rework, PMs can be tempted to lower the quality of the work or accelerate the project by getting their team to work overtime. When team members are asked to work longer hours for an extended period of time, they’re more fatigued and, therefore, more prone make mistakes that will inevitably lead to more rework. Similarly, when PMs sacrifice quality in order to meet deadlines, rework is required to fix subpar work.
If every construction firm could eliminate a large amount of rework, this would significantly impact global construction productivity. To do this, firms must first identify what parts of their projects are causing mistakes and delays.
In a report on the causes and costs of construction rework, Robin McDonald, CCM, LEED G.A. explains the 5 areas of construction management that cause rework:
- Human Resource Capability
- Unclear guidelines given to team
- Too much overtime work
- Workers with insufficient skill levels
- Not enough worker supervision
- Leadership & Communications
- Poor communication
- Lack of safety protocols
- Ineffective management/leadership
- Material & Equipment Supply
- Problems with construction plans
- Late input from a designer
- Unrealistic schedule
- Engineering & Reviews
- Late design changes
- Changes in project scope
- Errors in design
- Poor document storage and control
- Construction Planning & Scheduling
- Materials delivered late
- Work not completed to specifications
- Construction materials not to project requirements
One factor affecting each of these areas is communication. For construction companies to avoid the pitfalls listed above, they must create a solid foundation of clear and consistent communication. When construction teams aren’t communicating, errors happen. For example, if change orders aren’t communicated to all areas of operations, there will be delays in arranging for the added work, and unnecessary work may be completed in the meantime. Crews will then have to backtrack and re-do work they’ve already done.
Increasing communication will certainly reduce rework and backtracking. But modern construction demands have made communication much more difficult. With many stakeholders to keep in the loop and mountains of data and documents to manage, construction projects are more complex than ever. As a result, the old ways of collaborating and communicating aren’t effective enough to handle this fast-paced, information-saturated age.
To foster open communication and avoid costly rework, the construction industry must innovate. Pen and paper, fax machines, landlines – even email – just won’t cut it anymore. As providers of robust construction software, we’ve watched countless clients respond to the call for a productivity revolution. Embracing technology has allowed them to increase profits, reduce waste and eliminate inefficiencies. To learn more about how CMiC software has improved our clients’ operations, check out our client testimonials.