To run a profitable operation, your resource managers and schedulers strive to achieve as close to 100% utilization as possible. Estimating resource supply and demand with a high degree of accuracy is key to your success. When resource planning estimates are reliable, they materially enhance a firm’s ability to optimize utilization and to quickly adapt to changes.
The global construction industry is set to grow at a compound annual rate of 4.2 percent for the 2018-to-2023 period, Research and Markets found. By 2023, the sector will be valued at $10.5 trillion. Opportunities for business expansion are apparent, but the sector isn’t exactly bursting at the seams. The businesses with an operational edge could put themselves on the fast lane to a market advantage, but that raises the question: Are you one of those businesses?
The answer is complicated, but we can assure you of one thing: You won’t keep up with the industry’s changing demands if your enterprise resource planning system can’t scale with your needs. You can’t afford to run into project delays, fiscal headaches and procedural nightmares because your legacy ERP isn’t fit to adjust to your changing business demands.
Does Your ERP Have What You Need?
With the wakeup behind us, an introduction is in order. We believe construction firms need ERP solutions built for their specific workflows. The days of getting by with QuickBooks or trying to fit a traditional enterprise ERP into your operational model are fading. But we know that an ERP migration can be a long and complex process. Given this situation, we’re here to offer some advice on when it’s time to migrate.
In this five-part series, we’ll explore how you can identify the need for an ERP migration. To start, we’ll look at the problem of limited scalability and—if you’re experiencing it—you’re not alone.
Traditional ERP Systems Falling Behind
The ERP sector has gone through a transition in recent years with more solution providers embracing the cloud. The rise of cloud computing isn’t news, but it’s a big deal for ERP platforms, as organizations have long considered their data to be too precious to trust to such a technology setup. Now, organizations are realizing that stagnant legacy ERP systems are holding their businesses back, while cloud computing keeps maturing. The balance has shifted to the cloud in the ERP sector.
Michael Guay, research director of ERP strategy for Gartner, told CIO magazine that businesses need to rethink how they handle ERP decisions. In the past, organizations had to balance getting solid base functionality with adding best-of-breed components. In essence, companies had to sacrifice what they wanted because significant customization wasn’t feasible. That’s changed in the cloud.
“The reason a lot of people were dissatisfied with their ERP system [was because] the decision was not ‘Should I buy from one or two vendors’ – if you were an Oracle shop you bought from Oracle,” Guay told CIO. “Often, that meant you had a functional app that didn’t suit the needs of the business, so you had to customize a solution and that leads you down a very bad path.”
In construction, you may have resigned yourself to adapting your workflows to ‘generic’ account software or ‘traditional’ ERP configurations. With cloud solutions, such as CMiC Enterprise and CMiC Field, you don’t have to make those kinds of sacrifices.
How a Scalable Cloud ERP Platform Changes the Sector
When your ERP model isn’t able to scale or adjust to your business, you often have to modify processes and practices, adding workarounds and operating with exceptions to what would otherwise be an optimal set of workflows. Across multiple complex, interdependent processes, this adds up to chaos.
You can’t have one project manager updating a bill by emailing accounting while another logs into Quicken at the end of each day and a third hands your accountant a paper form. Sustaining business growth in fast-moving industries requires standardization, and digital technologies are empowering construction firms to connect data and users across teams. Now you’re stuck trying to manually track all of this information in an ERP interface that isn’t well-configured for construction workflows and lacks the management tools you need to keep up with all of the projects you have running. This situation isn’t tenable.
If your ERP system can’t scale, you will inevitably run into problems trying to grow your business. Want to learn how an ERP purpose-built for construction can change this dynamic? Contact us today. If you still aren’t sure whether you need a new ERP, be on the lookout for part 2 of this series, where we’ll discuss how unnecessarily complex document management procedures can quickly undermine projects, and what an ERP & Field platform can do about it.
Over the past decade, the lean approach has taken the world by storm. From manufacturing to marketing, businesses have used lean principles to improve efficiency and increase profits. In construction, the lean approach has included strategies for streamlining workflows, decentralizing decision-making and paying greater attention to project-level processes instead of individual tasks.
To better understand the lean movement and its potential for transforming the construction industry, it’s important to trace it back to its roots. The lean movement began with lean production, a revolutionary manufacturing process developed by Toyota. The goals of lean production are simple: minimize waste and maximize value. To figure out how to best to do this, Toyota used Japanese philosophy, which describes three different kinds of waste: muda, muri, and mura.
Defining and identifying waste may seem like a straightforward task, but waste is actually a nuanced concept. Breaking waste down into the three categories above allowed Toyota to distinguish between value-added and non-value added waste. For example, only the last turn of a screwdriver actually tightens the screw, but the previous turns were a necessary part of completing the overall task.
Muda refers to work that does not add value to a particular process — it’s completely unnecessary. In construction, re-keying data is an example of non-value added work. Additional manual data entry typically happens when firms have multiple software systems that aren’t “talking” to one another. When employees must manually enter data across multiple applications, it wastes a lot of time — as does correcting any data entry mistakes made in the process.
In contrast, unified ERP platforms have the data-transferring technology, which ensures that project data is accessible to all applications within the ERP system and documents are auto-populated with relevant, up-to-date project information. To reduce muda, construction software should:
- Store all information in a single database
- Automate processes
- Self-check for errors
Muri refers to processes that are excessive or overburden the system. Usually, muri manifests in placing too much stress or demand on employees who become less efficient and accurate. In construction, a common cause of overburden is poor communication. When employees on the job site don’t have all the necessary information they need to complete tasks correctly, safely or on schedule; it creates mistakes, delays and injuries.
Lean construction relies on better communication which is key to ensuring that employees are well prepared to do their jobs. This is an area where technology excels. Construction software like CMiC Field allows workers to report issues from the field using their mobile devices. They can attach documents like photos to the RFI so that project leads can remedy the situation — ASAP. Mobile construction software also allows for change orders to be communicated quickly, which avoids re-work.
Mura refers to uneven or irregular processes. Rather than progressing a regular pace, work is completed in bursts, with lots of downtown time in between periods of productivity. Mura can happen easily on the job site when equipment or materials aren’t available at the right times. The good news is that this can be easily solved through materials management software. CMiC, for example, has materials tracking software that allows project managers to automate purchase orders and anticipate delivery schedules assisting in lean construction.
These three types of waste helped Toyota identify parts of their assembly line that were holding up production. By approaching the construction lifecycle like an assembly line, lean construction can help firms to evaluate their workflows, identify non-value added waste and determine where they need to make changes.
We recently discussed the value of big data in our post How to Turn Big Data into Real Insight. In the article, we looked at the value of collecting data about construction operations, but we also discussed the hurdles involved in processing and analyzing that data. For most firms, hiring full-time data specialists is out of the question. But there are many other ways that construction companies can tap into the insights and foresight that data mining provides. The first step to developing a big data plan for your firm is to start with the basics.
Data, Analytics & Intelligence
On its own, big data is useless. In order to use big data, it has to be turned into either business analytics or business intelligence. You can think of data as the raw building material that produces the final constructed building. Big data is collected about a firm’s operations (time logs, temperature readings, sensor data, digital plans, and RFIs for example), and intelligence and analytics help to put it into context. For example, ROI represents an analytic that is determined by gathering and analyzing raw financial data.
Now, it’s important to differentiate between business analytics and business intelligence. Business intelligence focuses on developing a clear picture of the state of the company. In contrast, business analytics are used to determine why a particular phenomenon is happening. Business intelligence is typically done manually by those involved in strategic leadership positions, while business analytics are produced by construction software and other data mining technology.
Intelligence and analytics are both integral to a firm’s success, and knowing what you want to learn or investigate your company will help you match the data insight type to the right task. Business intelligence is more qualitative and is best for exploring areas of operation that are not as easily measurable, such as the state of day-to-day operations or customer satisfaction. Analytics, on the other hand, are quantitative and therefore useful for making predictions about future trends, analyzing financials or evaluating productivity.
How Construction Firms are Using Big Data
Big data can be used in many different ways, but here are some of the most popular ways that construction firms are using data to streamline operations:
1. Sensor Data
Many construction firms are investing in sensors, which they install in various places across the job site. Sensors can measure temperature, humidity, noise levels, vibration, toxicity levels and more. Gathering sensor data from the job site allows firms to predict the longevity and effectiveness of building materials and techniques. It also allows companies to ensure that workers aren’t exposed to harmful levels of noise, vibration or toxic chemicals.
2. Construction Safety
In Construction Safety: 4 Things You Need to Know, we looked at the safety issues the construction industry is currently facing. Data is an effective tool for ensuring that job sites adhere to the strictest safety standards. Data can help predict risks, avoid hazardous environmental conditions and monitor the maintenance and repair of vital safety equipment.
3. Field Data
In the field, paper is still prominent. Unfortunately, when firms use paper, they’re not able to collect the rich and valuable data that’s generated on the job site every day. Information about change orders, task completion, safety issues and time logs can provide construction executives with valuable information about areas for improvement.
4. Materials Tracking
Conserving materials is an integral part of keeping construction projects on schedule and under budget.
Project Controls included in construction software systems like CMiC have tools for tracking materials inventory, allowing firms to:
- Automate purchase orders and requisition management
- Anticipate delivery schedules
- Forecast supply needs
- Automate general ledger updating
Turning materials data into actionable insights about the availability of supplies is one of the best ways for firms to gain an edge over the competition.
Flexibility & Adaptation
By transforming raw data into analytics or intelligence, construction firms gain a flexible, well-rounded view of productivity, efficiency and financial performance. Both intelligence and analytics allow construction executives to gain a bird’s-eye view of operations as well as a more detailed, zeroed-in look at the individual elements that impact the big picture. Data also allows companies to predict emerging trends and prepare for industry changes. In short, data allows companies to change and adapt quickly in a time where competition has never been fiercer.
The technology coming out of Silicon Valley has dramatically transformed several major industries in recent years and some say construction is next. Venture capital firms are expected to increase their investment in construction technology and this could dramatically change the landscape of construction as we know it. Firms looking to grow or stay ahead of the pack would be wise to keep an eye on evolving technologies.
The construction industry has never been a consistent trailblazer when it comes to technology. This is in part because contractors are typically focused on maintaining profit margins rather than investing in new technology, according to McKinsey & Company. In that past, this approach made sense but advancing technologies are becoming too valuable to ignore.
In fact—with the help of world-class innovators—the construction industry could be the force that brings about major changes in robotics, cloud computing and other cutting-edge technologies. Self-driving technology, a long-standing goal of the automotive industry, is expected to hit construction sites long before the vehicles are ready for public roads and highways, according to Built Robotics founder and CEO, Noah Ready-Campbell. Construction sites are ideal places to launch autonomous vehicles because they are closed areas rather than open roads.
This is excellent news for the construction industry because few technologies could revolutionize the worksite as significantly as a self-driving Bobcat, which is exactly what the engineers at Built Robotics are creating. Using LIDAR technology to view and interact with the world, their autonomous track loader digs holes on its own. Operators simply enter the location coordinates, specify the size of the hole to be dug and stand back.
The Semi-Automated Mason (SAM100) is another example of how technology and robotics are helping to eliminate heavy lifting and increase productivity. SAM can lay six times as many bricks as a human per day and reduces lifting by 80%. SAM is the first commercially available robot of its kind and already has an impressive portfolio of work.
But, even with major developments like the self-driving Bobcat and SAM, robots are not set to “take over” the job site. However, one area of technology that is expected to become widespread is 3D modeling and drones. Construction firms are already using drones fitted with high-tech cameras to inspect structures in dangerous and difficult-to-access locations, which is especially useful at extreme heights. And 3D modeling software is allowing construction teams to recreate the real world on a digital platform.
Advanced construction robotics and other technologies are reshaping the construction industry and change will continue to accelerate. The best thing that construction executives can do is keep their eyes on hardware and software advancements if they want to keep up in the years to come.
Cloud technology has become an essential differentiator for many of the construction industry’s top firms, and it’s no wonder: cloud solutions offer powerful flexibility when it comes to data storage and analysis. Specifically, the cloud makes it possible for construction firms to maintain a single, reliable database that is easy to access from both the field and the office. Considering that the construction industry remains one of the least digitized sectors, firms gain a major advantage with cloud adoption.
The benefits of cloud technology aren’t exclusive to construction, however. Across all industries, use of the cloud is widespread and on the rise, In fact, by 2020, it’s expected that cloud spending will reach an estimated $200 billion, according to IDC. Contributor Louis Columbus rounds up an assortment of recent studies in his Forbes Roundup of Cloud Computing Forecasts. He points out one particularly impressive finding from a 2017 BDO Technology Outlook Survey, which found that 74% of CFOs said cloud computing will have the most measurable impact on their business in 2017. The Internet of Things (IoT) came in a close second, with AI, 3D printing, virtual reality and blockchain technology falling far behind. While all these technologies are promising, cloud computing is proving itself the most useful across industries.
In the construction industry, the cloud has helped firms store and manage the massive amounts of data that construction projects generate. In the past, there was no way for contractors to make use of all past and current project data. Firms typically used pen-and-paper methods to track ongoing data, which meant that any big data analysis would require massive amounts of manual data retrieval. When digitization began, data could be captured and stored, but it was often scattered throughout folders and spreadsheets. Managers and executives were basing decisions on old document versions with outdated data, and they couldn’t get a bird’s eye view of operations.
The cloud also helps construction firms avoid having to purchase expensive hardware. With on-premise server solutions, companies only have as much hardware as they pay for. Servers need to be purchased, powered, housed and maintained by internal IT, which requires a significant upfront investment and ongoing costs. It’s also possible for firms to over-purchase on hardware if their growth predictions turn out to be false. Pay-as-you-go cloud services eliminate this issue and make it possible for companies to change their storage plans as business increases or decreases. As a result, construction firms have been able to use the cloud to scale more smoothly and with less risk.
The benefits already seen by adopters of cloud technology are only expected to continue. Serverless architecture will allow IT infrastructure to be more flexible and responsive, data security is expected to increase exponentially and advancements in IoT technology will provide businesses with new ways to make use of databases, software and networks. In the coming years as cloud technology advances, it’s expected that all businesses will have made the switch to the cloud. In other words, transitioning to the cloud is not a matter of if, but when.
Are you considering a cloud implementation? Don’t do anything before you read The Most Common Mistake in Cloud Adoption.
One of the hardest parts about upgrading technology within a construction firm is getting employees to use the new tools. This can be especially difficult on the job site. Because in-office employees are used to working with computers and software technology as their primary tools, the introduction of new technology should be less jarring. While tech upgrades in an office environment require employee training and workflow changes, it’s still easier than implementing software solutions into work environments where digital technology has been mostly absent.
Mobile technology has a lot to offer, and if workers can be convinced of its usefulness, construction firms can reap the rewards of a more connected, collaborative job site. But, construction companies embarking on digital transformation must be sure that the new products they purchase won’t go to waste. To create a BYOD job site where workers wholeheartedly embrace mobile construction apps, firms must overcome a few challenges.
Challenge #1: Dispelling Myths Around Older Employees & Technology
It’s a common misconception that older generations are not technologically savvy, but the reality couldn’t be further from the truth. Technology has been embraced across generations, regardless of age. According to the PEW Research Centre, 87% of adults aged 50-64 are online and 87% use social media. Even seniors have embraced the digital revolution, with 6 in 10 using the Internet regularly. As far as mobile technology goes, 74% of adults aged 50-64 and 42% of seniors own a smartphone. Millennials may be been raised with cell phones, computers and the Internet, but older generations are catching up quickly.
Successful implementation of new technology is about training. And regardless of age, construction firms must assess their employees’ skill levels and design a training strategy that will build technological competencies, reduce fear and build confidence.
Before designing a training program, it can be useful to assess where employees are on the spectrum of digital readiness. The following digital readiness categories have been adapted from the PEW Research Centre’s report on online learning:
- The Unprepared: They lack confidence in their technological skills & need significant help when using new devices.
- The Traditionalists: They use technology to some extent, but are attached to tools and tech that have worked in the past.
- The Reluctant: They have more advanced digital skills that The Unprepared or The Traditionalists, but technology is not a big part of their lives.
- Cautious Clickers: They have a lot of technology available to them and are comfortable with using it.
- Digitally Ready: They are confident in their ability to use technology and have regular access to many different types of technology.
Determining the digital readiness of employees on the job site can help managers and executives design appropriate training programs that will ensure that every member of the team is taking full advantage of company technology.
Challenge #2: Finding Tech for the Office AND the Jobsite
When a construction firm embarks on a journey towards digital transformation, there are a number of people and needs to satisfy because many different employees across all departments will need to use this system every day.
Smart construction executives talk to their team and create a functionality wish list. Unfortunately, after meeting with their team, many execs become overwhelmed with the long list of requirements. Their project managers are looking for a platform that prioritizes collaboration, onsite workers are looking for expect mobile software to act as a digital multi-tool, accounting wants to streamline client invoicing, and IT wants to minimize the security threat profile.
Balancing this many needs and wants can certainly be challenging, but it’s not impossible. Software that’s been created specifically for the construction industry allows firms to find functionality that will meet the needs of all their team members. Another way to ensure that everyone will be satisfied with the new software is to choose an ERP platform that’s connected to a single database. ERP construction software has a suite of applications for departments across the organizations, but each application is connected to one another using a single database. ERP allows for data to flow freely from one department to another, creating greater connectivity and making collaboration a whole lot easier.
Challenge #3: Overcoming Internal Politics & Resistance to Change
Even with tech-savvy employees and a software system that everyone agrees on, there can still be internal issues within a construction company that make employees reluctant to embrace change. Teams may disagree about the right way to approach an issue, there may be negative chatter about the direction of the company or employees may have fears about the risks associated with change. Whatever the nature of the internal conflicts, it’s important to diagnose and solve them before they become an obstacle to digital transformation. Here are three ways to overcome political challenges and convince employees to embrace change:
1. Get Buy-In
Employees are more likely to feel positively towards tech changes if they’ve played a role in determining what the changes will be and how they will be implemented. Involving all team members in the decision-making process can boost morale and create a greater sense of ownership over the changes made. It can also be hugely beneficial for construction leaders to talk to employees at all levels about their challenges and concerns – they may discover inefficiencies in places they’d never think to look.
2. Show Don’t Tell
Instead of demanding that employees use new tools, show them why it’s in their best interest. As more and more software benefits become evident, employees will start to see that the payoff is worth the effort.
3. Look for Change Evangelists
To help inspire your team and create a shared sense of purpose, look for the individuals in your organization that are eager to embrace new technology and can help convince others to do the same. Change evangelists often have incredible influence over their colleagues and can be an invaluable resource during times of transition.
For more advice on managing change, check out A Case for Change: Company Cultures & Digital Transformation.
When construction leaders are shopping for new software for their company, they’re not just buying for one department because they’re buying for every department. That means that all team members, from on-site workers to executives, need to be satisfied with this increasingly necessary piece of technology.
When it comes to mobile construction management apps in particular, choosing an app that will improve the day-to-day lives of your team and the firm overall is crucial. And, because the quality of construction apps varies significantly, it’s up to construction leaders to find a solution that improves upon every aspect of construction management.
Some standalone mobile apps may be inexpensive and easy to implement, but because their functionality is limited and not deployed as part of a standalone solution to manage all aspects of a firm’s project delivery operations, they must be integrated into a larger system of multiple applications. Bridging together several mobile applications can prevent real-time data from getting to the right people and this can make the lives of key players much more difficult. To make sure that a mobile solution is right for your team, it’s important to look at the app from their perspective, considering every team member when assessing your options.
One way to make the lives of all your employees easier is to invest in a complete construction ERP software platform that also includes mobile functionality. Let’s explore how key team members will benefit from choosing a single database solution.
Even when you pick a great subcontractor with the proper qualifications and a reputation for success, mistakes still happen in the field. Your electrician may have several worksites to visit in a single day and as a result, arrives overworked and behind schedule. An advanced mobile solution can maximize your subcontractors’ efficiency and make the most of their time — on and off the job site. Here’s how:
- Reducing Paperwork: Replacing paperwork with a mobile platform eliminates the need for subcontractors to collect and sort through countless documents. With access to your firm’s ERP platform, there’s no need to collect physical documents, schedules or blueprints from the office in between jobs. Less paperwork means they have more time to focus on getting the job done.
- Eliminating Confusion: Avoid costly errors that arise when your accountants try to read the scribbles a carpenter has left for them. A “1” that looks like a “7” can create serious confusion down the line.
- Mobilizing your Schedule: Offer subcontractors mobile schedules and checklists — all within a single platform. Make it easy for workers in the field to check-in to the job site and mark tasks as completed through their smartphone. They’ll always know the next task at hand, and stakeholders will know exactly when each task is complete.
- Standardize Reports: Collect standard reports through a mobile app to keep track of the work.
Project managers deal with many moving parts every day, especially in large firms. They plan budgets, negotiate estimates, create schedules and report back to the client. Seasoned project managers spend years perfecting their management style, but no strategy can replace the efficiency of a unified mobile platform. Here’s how mobile ERP software improves construction project management:
- Oversee Operations from Anywhere: When mobile apps are part of a single database solution, project managers can manage construction teams from anywhere. Applications like CMiC Field, download project information locally onto the mobiles device, allowing PMs to monitor, track and modify essential project data. Any changes made or new information added will be automatically synched with the database. And, if there’s no internet connection, offline changes are saved and synched with the database when the device is back online.
- Receive Photos from the Jobsite: When something goes wrong on the job site, project managers want to know about it. Advanced mobile tools allow for problems to be reported in real time. Workers can easily send pictures so that project managers and stakeholders can see the challenges for themselves.
- Customize Reports: Stakeholders must be informed and may need to approve of certain details before operations can continue. To avoid potential bottlenecks, mobile solutions offer tools to automatically populate reports in a variety of formats. CMiC’s platform, for example, is built with a workflow engine to quickly distribute data and gather approvals, with notifications to keep things moving forward.
Looking for more project management wisdom? Check out our blog on the 5 Traits of Successful Project Managers.
Some executives are more concerned than others when it comes to the nitty-gritty details, but all executives need to be kept in the loop. Mobile technology makes it possible to provide the most up-to-date snapshots so that executives can quickly get all the information they need. Even high-level executives can benefit greatly from knowing that day-to-day operations are going off without a hitch. And if issues are coming up, they can see who’s accountable and isolate the problem.
- Computerized Reporting: With all communications happening inside a single mobile platform, it becomes easy for executives to assess project status at a moment’s notice. You can know instantly when things are behind schedule or over budget.
- Store Everything: Store the details of your firm’s mobile interactions, including communications and document versions. Advanced software will even track which changes and approvals were made as a document is passed around. That way you can keep everyone accountable and protect yourself in the event of a legal dispute.
- Trust the Data: With CMiC Field in particular, data is always extremely reliable and up to date. That’s because CMiC single database system never copies and distributes numerous versions of the same document. What you see will always be a reliable “master” version with markups and a full document history attached.
Project owners have the most to lose and are often the least involved in the project — especially when a firm is using legacy software. ERP systems with mobile apps built in allow owners to check in on day-to-day operations quickly and easily.
- Stay in the Loop: Owners are often too busy to keep tabs on every detail of their project. Mobile software makes it easy for PMs to send out reports (in a variety of formats) with the click of a button — all based on real-time data.
- Eliminate Human Error: People make mistakes, but a trusted construction firm with smart mobile ERP can significantly reduce human error when it comes to data entry and data management. Intelligent platforms like CMiC’s ERP software automatically pull data from the relevant documents and auto-populate new forms so that the numbers are always correct.
- Quickly Fill Change Orders: A solid mobile platform makes it easy to change directions on a dime. When a client makes a change, owners can easily get in touch project managers so that the change is implemented ASAP.
If you want to learn more about how ERP mobile technology can transform operations, 3 Ways Top Contractors Lose Clients—And How Mobile Can Help is a must-read!
There’s a common saying in business management: “You can’t manage what you don’t measure.” Today, advancements in digital technology have led to an explosion of data, something that’s made measuring a whole lot easier.
With access to an abundance of data, managers in every industry including construction can measure performance more effectively than ever before. They can delve into minute processes and search for inefficiencies, and they can develop solutions to problems that have previously gone undetected.
The term big data refers to a large volume of data that requires complex and powerful computing systems to process. As technology advances and computers become more powerful, we gain the ability to collect, analyze and process larger and larger amounts of data. And of course, the more data that’s gathered, the more accurate our insights become.
For construction companies, big data technology makes it possible to collect enough data to generate accurate analytics that can help with planning future projects, refining operations and streamlining processes. Rather than discarding project data after a project is complete, for example, construction firms can hold onto it, let it accumulate and mine that data for insights.
But, to turn everyday project data into big data, construction firms need powerful software that’s capable of recording and processing a lot of data. Let’s face it, modern construction data is simply too complex to handle manually, especially when a large team of stakeholders is counting on the information. Even popular technology like spreadsheet programs are simply no match for the volume of data generated with just one construction project. As the industry standard for efficiency rises, constructions firms need an ERP platform that’s capable of capturing and analyzing all the necessary raw data.
The Many Advantages of Big Data
Valuable data is already flowing through every construction firm, but only some of those firms are reaping the rewards. Bernard Marr, best-selling author and big data guru, explains the value of big data: “It’s an industry where 35% of costs are accounted for by material waste and remedial work. So, counting the cost of every screw could be the difference between delivering on budget and bankrupting an organization (or several organizations) financing a build.”
Put simply, big data helps construction firms predict outcomes and drill down into every detail of operations. As firms gather more project data, they’re better able to plan for future projects. While every construction project comes with its own set of unique variables, comparing similarities in landscape, scope and design can help the planning phase. With experience comes insight, and leveraging past project data helps firms anticipate and avoid problems.
The benefits of big data are far-reaching and go beyond monitoring the job site: Data can help firms preview potential change orders to see how the changes will affect timelines and budgets. Firms can use big data to evaluate spending and budgets and gain greater financial transparency across the organization. Data can even help construction companies evaluate potential partners and vendors.
More Data, More Problems
The use of big data is still new in the construction industry – a fact that is somewhat surprising. If data can help to eliminate much of the risk and uncertainty inherent to construction, why aren’t more firms making use of it? The answer is simple: complexity. For data to be useful, you need a lot of it. Collecting data is easy, but problems arise when that data needs to be processed, synthesized and placed in context. Most construction firms don’t have the resources to hire full-time data scientists, and many are unsure how to go about generating analytics from their databases.
Another challenge that comes with big data is accuracy. Any firm running separate solutions for project management and financial operations, for example, is likely to face issues with data accuracy. Distinct software tools will often collect and store data separately, making it difficult to gain a complete understanding of operations. Time is wasted rekeying information from one database to the other, where it may be copied incorrectly. When there are errors in data entry, it calls all your data into question. To foster real insights, data must be consistent, readily available and easy to compare.
Putting Big Data to Work
The best way to make big data work for you is with powerful ERP technology. ERP platforms consist of multiple applications, all connected to a single database. This database acts as a single source of truth, eliminating fears about data accuracy. In addition, having all organizational applications connected in a single system streamlines the process of extracting analytics and makes it easier to gain data insights.
If your firm is looking to unlock the power of big data, a robust construction ERP platform is the best place to start. The best options are built with customizable dashboards that help you make sense of real-time data. This consistent feed of relevant, updated information makes it easy for stakeholders at every level to understand project status. Once decision makers become comfortable with the key metrics, they’ll start to notice subtle differences and will eventually gain actionable project insight.
Looking for more ways to boost efficiency? Check out our blog on Improving Productivity with a Strong Integration.
Is your firm struggling to keep up with your current workload? Are new opportunities opening up within your sector? Do you feel like your business has plateaued? If the answer to any of these questions is “yes,” it might be time for a new strategy.
Making the decision to scale your business can be both exciting and daunting. That’s why it’s important for executives looking to increase the capacity of operations to do so responsibly. Lack of planning and foresight can lead firms to grow too big, too quickly. The systems and strategies that work on a smaller scale may not be effective when applied across a larger organization. And this can cause inefficiencies to accumulate and eventually derail productivity.
With advanced planning and the right technology, however, firms can successfully grow their business while streamlining operations and increasing efficiency.
Recruiting & Retaining Talent
For the past few years, the North American construction industry has been experiencing a labour shortage. Economic changes, an aging workforce and the decline of millennials entering construction jobs have all contributed to less available workers for construction projects. No one knows just how long this labour shortage will last, but the outlook doesn’t look good. According to a recent survey, 60% of construction firms are worried about their ability to find enough workers to complete their projects over the next year.
Construction firms can’t bid on new projects if they don’t have enough employees to complete the work. And growing your business requires bringing in new clients and sustaining a workload that will support growth. Because workers are scarce, firms that are looking to grow need to pay careful attention to their human resources. This means finding new and improved ways to recruit new talent and adopting ways of ensuring employee satisfaction and retention.
Construction firms looking to hire should explore other industries. Connect with veteran organizations or minority AEC groups to find potential candidates. You can also connect with a younger demographic by attending high school and college job fairs. To retain your current workforce, you might want to review your company policies and benefits and find ways to make your company more attractive to prospective employees.
Most importantly, pay attention to company culture. Make sure that employees are shown respect and that they’re recognized and appreciated for strong work. You can also keep employees fulfilled and engaged by implementing professional development programs. When companies show a commitment to helping employees advance and grow in their career, it fosters a greater sense of loyalty.
Most importantly, keep the lines of communication open. Solicit feedback before new company protocols are established, discuss future goals and ask for ideas about where the organization can be approved. Starting a dialogue and listening to your employees is the best way to address any issues that could cause them to leave.
For more tips on attracting and retaining talent, check out our blog post on how to overcome the construction labour shortage.
Investing in Technology
When a business grows, its operations must evolve along with it. Processes that work on a small scale may not work when applied to a larger number of projects and a greater number of employees, managers and stakeholders. The inefficiencies of your current procedures may not be noticeable right now, but when your business grows these inefficiencies will grow too, becoming bigger and more problematic as they accumulate. It’s therefore important for construction companies to review their operational strategies as they grow – rather than waiting until they’ve increased their workload and are falling behind.
The most important part of analyzing your operations, systems and processes is looking at the role that technology plays in your organization. You’ve probably heard the term digital transformation, which refers to a company adopting new technology and developing IT strategies that help them to adapt and change. Digital transformation is about more than implementing the latest technology or digitizing pen and paper systems. It’s about deep organizational change. It requires companies to look at how technology can enable automation, standardization and greater efficiency,
To create a new system that incorporates software and other technological tools requires a company culture that embraces innovation. Firms that use cutting edge technology can capture and analyze more organizational data, communicate and collaborate easily, create greater financial transparency and eliminate waste redundancies.
Not only does technology help companies to develop more efficient procedures and gain greater insights into key organizational metrics, it also provides a way for businesses to scale with significantly less risk.
SaaS and cloud computing have enabled companies to use subscription-based technology. Before, companies that wanted to increase data storage for document management, for example, had to invest in more servers. In addition to the initial investment, this also meant paying to house the servers and keep them running with regular maintenance and energy costs.
The extra expense associated with the servers is fine when a construction company is doing well, but when business declines, they’re stuck with a huge bill for IT infrastructure that’s not being used. With cloud storage, companies pay for only the storage they need and can easily increase or lower their storage as required.
Avoiding Fragmented Software
Scaling without proper planning or strategizing can be chaotic. Facing a storm of new challenges, executives are too busy putting out fires to find long-lasting solutions to their core organizational issues.
In this situation, construction leaders looking for quick solutions often buy subpar technology with limited functionality. For example, they may invest in a stand-alone project management app because this is their most pressing concern.
Unfortunately, adding individual software applications into a larger IT system creates a fragmented network. When individual apps are stitched together, they won’t share data with one another. This is problematic because construction projects must be managed holistically: for everything to go smoothly, data needs to flow freely between all departments within the company.
Accounting, project managers and executives all need to be able to connect to a single data source when using their respective software applications. If the apps used by different departments aren’t sharing data, employees will have to request the data they need from other departments and manually enter into their apps. With more data entry, there are more opportunities for human error, which could cause inaccurate data.
Rather than hastily purchasing apps as short-term solutions, firms should do their research and find a total EPR solution. ERP software has a single database that creates a free-flow of data across the organization so that they can avoid fragmentation and keep all departments in the loop.
To learn more about ERP and the differences between single and mixed source construction software, download our latest e-book!