Ecmweb 7761 Electrical Contractor Tablet Pr
Ecmweb 7761 Electrical Contractor Tablet Pr
Ecmweb 7761 Electrical Contractor Tablet Pr
Ecmweb 7761 Electrical Contractor Tablet Pr
Ecmweb 7761 Electrical Contractor Tablet Pr

The Construction Industry’s Digital Revolution: Seize the Opportunity

Sept. 16, 2015
How electrical contractors can take advantage of today’s incredible business opportunities and pave the way for a new era of work.

When the Internet was introduced in the early 1990s, no one really knew that complete industries, cultures, governments, and businesses would be transformed by this innovative platform for sharing information, learning, and transacting. Nevertheless, what started out as a novelty of sorts has since grown into a more than 3 billion-strong group of users (as of 2015) that’s accessible from the desktop computer to the 5-ounce mobile phone — and everything in between.

The digital revolution continues to evolve — with cloud, social, and mobile technologies gaining ground as infrastructure components (such as wireless broadband) improve and help expand Internet access around the globe. To say that everything and everyone is now “connected” would almost be an understatement, based on the sheer prowess and strength of the global interconnected Web.

scanrail/collection/Thinkstock

This trend is also reshaping the engineering and construction (E&C) space, where the evolution of design and construction functions has taken a leap forward with the transition from electronic drafting to high-resolution digital modeling (also known as building information modeling or “BIM”). Thanks to ubiquitous digital connectivity, cloud computing, and “big data,” the E&C industry is undergoing a historic melding of engineering, architecture, fabrication, construction, and other related disciplines, undoing 100 years of expansive industry fragmentation.

Notwithstanding these exciting industry changes, technology use and adoption are still relatively low in construction compared to other industries. Following are some key insights and recommendations on how construction firm leaders can take advantage of today’s incredible business opportunities and start paving the way for a new era.

Don’t stay stuck in your ways

The construction industry is notoriously slow to adapt/change, and is still lagging behind other industries in technology adoption by a fairly wide margin. In fact, according to a recent study, “The 3rd Annual Construction Technology Report,” conducted in 2014 by JBKnowledge (in partnership with CFMA and Texas A&M University), “over 30% of construction companies surveyed said that their 2014 IT budget as a percentage of 2013 corporate revenue (not building volume) is less than 1%.” Furthermore, company size did not affect IT budget allocation. In fact, “the majority of companies with the largest sales volumes (more than $500 million) still only allot less than 1% of corporate revenue to IT,” according to the survey.

Other research, including Gartner’s 2014 IT Key Metrics Data, confirms these numbers. According to Gartner, the cross-industry average (a total of 19 industries were surveyed) of IT spending is 3.3% while construction sits at 1%. That means the typical construction firm’s IT budget is one-third that of the average company — a scrimping that can get pretty costly when the need to adopt new on-site or back-office technologies surfaces.

James Benham, co-founder and CEO of JBKnowledge, added that 40% of survey respondents don’t even have an IT department. “That’s like letting a high school student operate as your CFO,” he said. “Deep down, most industry executives don’t take technology seriously because they don’t believe that it delivers real ROI.”

It’s important to point out that traditional contractors aren’t the only ones standing in the way of technology adoption in their industry. In fact, JBKnowledge’s survey found that more than 50% of the executives polled lack a new technology budget. Others blamed a lack of support staff, employee/manager hesitation to try new tools and applications, technology maturity, and high learning curves with keeping them out of the technology loop.

Thanks to digital connectivity, the construction industry is undergoing a melding of engineering, architecture, fabrication, construction, and other related disciplines (Saklakova/iStock/Thinkstock).

“CEOs in the construction industry need to get serious about IT budgets and lead from the top in technology adoption,” said Benham. “My recommendation is to treat technology like an investment, not an expense. You don’t have to be way ahead in technology investments; you just have to be a year ahead of your competition.”

Five key steps to building your digital DNA

There’s no question that technology can put business objectives within reach. By gaining proficiency in several key areas, construction firm leaders can more effectively position themselves for success in today’s ever-changing business environment. Keep these five recommendations in mind:

1. Lead from the top. Make clear to your employees that you value technology as a critical long-term investment that will shape the nature of your business in the future. Start by forming a “real” IT department, assign a realistic budget, hire professional staff, and then include those staff members in key strategic conversations. If you can’t afford to hire full-time staff, find a technology outsourcing company that can provide advisory and application services that help serve your business.

2. Emphasize strategic goals over technological capabilities. Learn the language of business capabilities, and focus your IT strategy on strategic outcomes versus technological functionalities. Enterprise architects can be particularly good sources for helping executives learn about the intersection of technology and business capabilities.

3. Keep it safe. According to the JBKnowledge industry survey, 63% of the construction professionals surveyed admitted their companies do not have cloud security policies. “Companies are out of touch with cloud maintenance and threats,” the authors wrote. Be sure to have an IT/cyber policy in place that addresses the following topics:

• Awareness and education around cyber security.

• Language about how to protect the organization’s and individual users’ information.

• Identification of threats, vulnerabilities, consequences, and associated action requirements.

• Disaster planning, which includes a protocol to protect the availability and recoverability of the organization’s information.

4. Time the trends. Think about your business platforms and how they relate to future trends and mega-trends that are developing around them.

Keep an eye on service industries, such as insurance, banking, or accounting for parallel industry trends and drivers. As one industry executive of a large global engineering firm stated, “engineering professionals will all be replaced in time and motion by automation. If they’re selling hours, they’re endangered and, therefore, they’ve got to sell solutions and not hours.”

5. Manage change and engage your people. Human behavior plays a critical role in technology implementations. In fact, the level of success a firm can achieve in this area often depends on how the changes are planned, managed, and evaluated. Knowing this, it is clear that new technology introductions require solid execution and planning practices that truly engage employees at all levels.

Summing it up

In the wake of the Great Recession, companies of all sizes have started to redefine themselves, looking at new and innovative ways to deliver projects and explore new “spheres” of the built environment. Today’s new technologies allow industry professionals to link up and share project knowledge across integrated teams 24/7 across the globe. This type of “cross-company” — or even “cross-industry” — integration is a fundamental shift to converging disciplines and the creation of solutions to tomorrow’s challenges.

Emphasis on greater efficiency and innovation, in particular, will help ensure that industry players can rise to the challenge of the new competitive landscape. Those firms that take the initiative now to invest in innovative technology platforms will be rewarded with more efficient and streamlined operations designed to help them work smarter, better, and faster.

Hoover is a content manager with FMI Corp., Raleigh, N.C. She can be reached at [email protected].

About the Author

Sabine Hoover | Content Director

Hoover is content director, FMI Corp., Raleigh, N.C. She can be reached at [email protected].

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