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Evaluating Cloud-Based vs. On-Premise Construction Management Software

Today’s expanding reliance on software and subsequent data can create a significant IT challenge for any construction businesses. When it comes to construction management software — the solution that helps contractors manage budgets, schedules, quality and safety at the office and the field — the choice between SaaS or on-premise construction software is not always clear. Selecting the best fit for your organization comes down to a host of parameters including your technology infrastructure, cost, performance, operational requirements, reliability and security.

Understanding Cloud-Based and On-Premise Solutions

First a quick definition of terms. On-premise means that data is stored on a company’s own servers. This server-based IT environment hosts licensed software and data. It’s very common to see on-premise solutions in market segments such as finance or healthcare, where security is paramount.

In contrast, cloud or SaaS-based computing relies on remote servers and storage. In this case, your cloud service provider is handling all the IT including uptime, maintenance, etc.

Let’s look at the key features and potential challenges of each deployment option.

Cloud-Based Construction Management Software: An Overview

Gartner, Inc. forecasts that worldwide end-user spending on public cloud services will grow 20.7% to total $591.8 billion in 2023, up from $490.3 billion in 2022. This is higher than the 18.8% growth forecast for 2022. The construction industry will be a big part of that anticipated investment. Cloud-based construction workflows are helping eliminate data silos and deliver more collaborative conversations across the design and construction lifecycle, but also in support of maintenance and operations.

On top of productivity, here are a few of the other benefits of a cloud-based computing solution for your office and field workflows:

  • Connected Jobsites: The greatest value of a cloud-based environment is the collaborative nature that it enables. Effective construction management software requires continuous input of data such as timelines and costs. With access to near real-time jobsite progress, project teams are able to respond faster to issues as they arise, support decision making and customer or stakeholder transparency.

  • Data Management/Storage: In today’s technology-enabled space, data is abundant. Managing that data can be a challenge, particularly with the demand for more collaboration and transparency across project progression. From point clouds to the thousands of pictures taken from drones and ground-based solutions, the cloud makes an ideal data processing forum.

  • Insights and Analytics: Processing data in the cloud can be significantly faster than other options.

  • Scalability: Scale up or down without having to make customizations to the software/platform.

  • Security: Cloud providers take on most security requirements at the infrastructure level in a shared responsibility model, however, firms work with software providers to properly implement, configure and secure applications.

Here’s how one firm has taken advantage of these three benefits with cloud-based construction management software. Harris, a leader in design and engineering, construction, manufacturing, building automation, service, conveyors, and end-to-end building systems, opted for the private cloud option, to support business growth and to optimize project forecasting, labor productivity, and change order management. From a construction technology infrastructure perspective, this option catered to their key business needs, including 24-7 accessibility across all devices.

Another firm had a similar experience. Michelle Eastman, CFO at North Mechanical, said, “As we worked through the process of reviewing different construction software programs, we realized that CMiC Cloud was the only true Software-as-a-Service (SaaS) construction management solution for a company our size, eliminating the need for purchasing and maintaining a hosting server. We wanted all users to have a single point of access. For a company with an outsourced IT group, like NMC, CMiC Cloud was the most logical solution, giving us the outcomes we wanted.”

A 2020 McKinsey & Co. report noted that companies that adopt the cloud well bring new capabilities to market more quickly, innovate more easily, and scale more efficiently, while also reducing technology risk.

On-Premise Construction Management Software: An Overview

Despite the growing demand for cloud-based construction software, that doesn’t negate the fact that on-premise construction management solutions have their advantages and their solid role within the software space. Organizations that are subject to particularly strict data protection requirements, for instance, will definitely invest in on-premise solutions.

A 2023 McKinsey study found that 24/7 availability and regulatory changes are still a concern with cloud based applications.  The author’s note: “These concerns partly explain why fewer companies than expected have moved critical business applications to the cloud. In fact, after surveying executives and technology leaders at many of the world’s largest organizations, we found that fewer than 10 percent have successfully moved mission- and business-critical processes and workloads (tier 1) to the cloud.”

On-Premise Construction Software: Benefits

That concern certainly spotlights one of the pros of on-premises construction management software solutions.

  • Security: On-premises solutions are under a firm’s complete control. You handle the servers, the operations and access.

  • No Internet Limits: Since on-premises solutions don’t require an internet connection to access software, users can work from anywhere, at any time.

Miron Construction Co. is a contracting firm focused on commercial and industrial markets. The company self-performs a considerable amount of work including concrete, steel, masonry and carpentry. A decade ago, the firm relied on about 18 different siloed systems between the office and field. As a result, decision makers selected an on-premise, all-in-one construction management software that connects accounting and payroll with project management and project controls. CMiC fit the bill.

For Miron, one of the really exciting aspects of the deployment is the platform’s ability to easily integrate with complementary technologies, such as optical character recognition systems and DocuSign, as well as the additional field-focused capabilities, such as CMiC’s Mobile Crew Time. The solution fits all the pros of security without the cons associated with scalability, reliability and cost.

The Importance of a Strong Construction Software Partner

Implementing the best construction management system — whether for on-premise or the cloud — is not an off-the-shelf installation that ends when a system goes live. These are typically very sophisticated, multi-featured solutions designed for the multi-faceted construction project workflow.  Success will depend on the partnership with your provider.

No matter your IT configuration, find a construction project management solution that has the experience and the expertise to facilitate your company’s IT strategy.

CMiC construction management software can be deployed as an on-premises solution, as a Platform-as-a-Service (PaaS), or as part of a multi-tenant Software-as-a-Service (SaaS) cloud environment.

To learn more about CMiC’s robust construction management solutions, please click here.