Measured Digital Lag Identifies Construction's Easiest Competitive Advantage

Multiple research projects point out that only about half of construction contractors use the digital tools that offer the easiest way to improve construction efficiency

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“Just as the introduction of electricity shifted the world’s industrialized economies into higher gear a century ago, digital technologies are fueling economic activity today. This time, however, the transformation is unfolding exponentially faster.” Digital America: A Tale of the Haves and Have Mores, McKinsey & Company

The opportunity to gain competitive advantage by implementing digital technology in a construction organization may never be better, with off-the-shelf technologies abundant and so few competitors using them.

A summary of the McKinsey research notes, “The most digital companies see outsized growth in productivity and profit margins.” Researchers defined the scale of digitization based on 27 indicators that fall into the three categories: digital assets, digital usage, and digital workers.

Writing about their results in the Harvard Business Review, McKinsey says, “Digital usage in the form of transactions, customer and supplier interactions, and internal business processes, grew almost fivefold [over the past 15 years].” Digital usage measures the extent to which companies engage digitally with customers and suppliers. Leading companies make greater use of digital payments, digital marketing, and design-led product development. They are more likely to manage their operations and customer relationships using software. They take advantage of e-commerce platforms.

Recent research by Equipment Today found that only 36% of construction contractors are willing to make purchases worth more than $500 online, suggesting the breadth of construction’s resistance to even participating in digital business. And 76% of those who will not conduct a $500 purchase online will either hold the line on their online purchasing or reduce its frequency.

More telling, 30% to 60% of all construction contractors responding to the 2016 Construction Technology Report, by JBKnowledge, employ manual processes or spreadsheets to manage takeoff, estimating, subcontractor prequalification, invitation to bid, project management and collecting field data. Fewer than half of contractors responding to the construction technology provider’s survey use mobile apps for daily reporting, worker time entry, managing safety, tracking job performance.

JBKnowledge’s summary of the annual study suggests, “Roughly half of the companies surveyed either do not know where to start in tying each of their mobile data collection processes together, automating them and going mobile, or they’re not willing to spend additional money to do so. The amount of manual and spreadsheet data collected from a mobile device on a job site is surprising. Builders are completely missing the daily analytics that could reduce job site error, waste and inefficiencies.”

The best news is that software solutions are available for all key construction-management functions, and most have some record of improving construction-company efficiency and performance. With about half of U.S. contractors eschewing these advantages, opportunities to get a leg up on a major portion of your competition are no further away than your smart phone.

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