The construction industry is big. It’s predicted to account for nearly $13 trillion of the global economy by 2022 and employs about 7% of the global working-age population.
But the industry as a whole hasn’t readily adopted new technologies.
In fact, construction is currently one of the least digitized industries in the U.S. For the past two decades, productivity has remained flat, growing only 1% compared to the economic average of 2.8%.
And the lack of digitization is catching up with leaders dealing with more complex projects.
Large projects today typically take 20% longer than estimated and can run up to 80% over budget.
So what’s the good news?
There’s a new urgency for change. New and forward-thinking leaders are finally pursuing digitization to improve performance and differentiate from their competition.
Keep reading to find out why leaders are embracing tech (and how you can too)!
You’ve probably heard the term “digital transformation” at some point. It’s a buzzword that gets a lot of attention in every industry, even construction.
But it’s for good reason. In an industry faced with crippling inefficiencies and challenges, digitization is the only way forward in the modern age.
Here’s why construction leaders are ready to infuse tech into their operations versus risking the inability to compete.
80% of today’s construction companies can’t find the workers they need. And 66% of leaders have said they increased base pay rates for craft workers because of the difficulty in filling positions.
The labor shortage for the past several years is causing increased timelines and costs on projects and slowly eroding profitability.
Between 2016 and 2026, the average age of the U.S. workforce for construction is expected to increase from 42.0 to 42.3 years—the highest level ever recorded.
What’s causing this? A lack of the next generations choosing to join the workforce.
Going forward, technology is a way for companies to attract younger workers (and fill in the gaps when there’s shortages).
On top of all these challenges, leaders are also dealing with more complex projects.
But construction methods haven’t advanced at the same rate. Leaders need new and advanced ways to solve today’s challenges.
Construction software from 10 to 15 years ago doesn’t always adapt well for the modern world of mobile and real-time data. These solutions tend to be “one-size-fit-all,” which is often problematic in an industry where no two projects are the same.
[Read about the top signs that your current project management software isn't working for you.]
Luckily, there’s now flexible and custom solutions that can fit any size construction business to digitize operations. For example, most workers already have the devices you need like smartphones that can be used to real-time field data collection.
[ Read more about the benefits of construction mobile apps for your crews and projects. ]
Just like most industries, the COVID-19 pandemic made leaders realize just how dependent they were on manual processes like paper, whiteboards, and word of mouth to operate their businesses. These processes became even more stressed with COVID-19 safety guidelines in place.
During this time many leaders were forced to try digital tools for the first time. The result?
They discovered that their crews were ready for tech. They’re now accelerating their tech implementation to adapt their businesses for the digital age.
[ Learn more must-know technology trends shaping the future of the construction industry. ]
Most of these challenges aren’t new though. So why has the industry been slow to digitize?
Part of the reason is the nature of construction.
There’s always a wide range of variability between projects. With a number of moving pieces and people involved, it’s not a simple transition from current, manual processes to digital. And, as mentioned, software of the past didn’t always measure up.
But the industry is now at a tipping point. The rise in urbanization and commerce is increasing the demand for homes and offices. And there’s more pressure to build fast, safely, and under budget.
To keep up, many leaders are being forced to digitize their processes or risk being left behind.
Launching new technology means change, which naturally feels risky.
But your current reality is trying to manage all the moving parts of jobs– workers, materials, job costing, and quality and safety standards–with outdated, manual processes.
It’s what we call the “messy middle”–where you’re stuck trying to wrangle together info from paper forms, spreadsheets, disconnected systems, and even word of mouth.
It’s the feeling of dreading every Monday morning because there’s a stack of papers waiting for you to be filed. It’s the frustration of tracking down workers one by one to get their time sheets. Or it’s the anxiety of missing your margins on yet another project.
This current way of doing things is bogging down your operations and best people. You’re just barely getting by and there’s not a clear path to efficiency or scale.
And a lot of construction leaders are dealing with the same issues and trying to find a better way.
That’s where technology comes in.
You might be asking yourself, ‘Where should we even start with technology?”
After helping hundreds of others undergo digital transformations, we recommend starting simple: start with digital tools that simplify everyday work. While it may not mean the fancy tech like robotics and AI, it will result in a faster ROI and adoption by your teams.
Business management software can:
Here’s some examples of business management tools that can digitize your daily operations:
Adopting these types of tools can result in easy benefits. See how.
Digital tools save your employees time and improve efficiency. Through automation, you can eliminate manual data entry and tedious processes that rely on paper forms and spreadsheets.
This could mean streamlining a daily workflow or allowing your crew to capture data instantly out in the field through their smartphones. Either way, you’re automatically creating and sharing data across your organization. And you’re lowering the risk of costly mistakes–there’s less room for error from typos or other incorrect data
Cris Nichols, Financial Controller at James E. Fulton told SPARK that, “After 20 years of working in the construction trades, I’ve greeted every Monday morning as a paperwork nightmare! The more employees you have, the bigger the mess. The more jobs you have going on, the worse the piles! Every week, I’d go through the same routine.”
She turned to SPARK to create a new app for time entry and billing, creating a smooth and consistent process. Three days of headaches for the team are down to one day of effortless work. Read the full case study here →
Technology also gives you access to real-time data. Through integration and automation, you don’t have to wait days or weeks to collect, enter, and process data.
With the right workflows in place, you’ll always have the most up-to-date data at any given moment.
Real-time data can also be aggregated into visual dashboards that show all stakeholders real-time performance across jobs.
How often do you make decisions based on data from memory or just your “gut?” What do you wish you knew about your operations but don’t have the data to support?
Technology and data can give you a new level of visibility into your business. You can track performance, alert yourself of any issues, and compare progress over time.
In turn, you’ll be able to make better decisions about how to improve your business.
Contractor DHE Plumbing needed a better way to capture “real-time” progress and improve insights into job site management, scheduling, and forecasting projects. With SPARK, they created a new software program that features a drag-and-drop program to assign employees to their job sites and custom forecasting algorithm.
Owner Eric Heyboer stated that, “The new software solution eliminates the “unknowns” and they’re productively managing more work and employees. Our active and potential jobs and capacities are centralized and are now driven by data as opposed to guesses.” Read the full case study here →
Employees don’t want to spend their time on tedious and manual tasks. They don’t want to dread Monday mornings or other aspects of their job.
This is especially true of today’s younger generations who grew up with technology. They want to use the same digital tools they have in their personal lives like smartphones and user-friendly platforms.
[ Read more in-depth about the benefits of construction management software. ]
The Andy J. Egan Company, a growing mechanical contractor, needed to manage job assignments for a workforce of over 300. SPARK helped them launch an automated scheduling workflow with mobile-friendly time entry and compliance checks.
When Esper needed to significantly reduce administrative overhead and increase employee engagement, they turned to SPARK to launch a custom management system and employee app with streamlined time entry, performance tracking, and automated business processes.
Fulton used to track over 1,000 pieces of paper per week, had limited insight into equipment maintenance, and manually generated weekly client updates. Now, their mobile employee app automates back-end systems, generates weekly updates, and makes job site management visible.
As DHE Plumbing & Mechanical began to grow rapidly, scheduling and asset tracking became a real challenge. DHE trusted SPARK to build them a custom scheduling and tracking tool to help them scale.
Before implementing business management software, you should ask yourself and team the following questions:
Digital transformations involves stepping back and asking how you can take advantage of emerging digital technology, data, and processes to fundamentally change how you provide for customers and therefore, run your business.
Too often though leaders only focus on the short-term. They look for quick fixes and instant gratification.
Instead, take some time to consider what you want your company to look like in 3, 5, or 10 years from now.
At this point, it’s not about nailing down ALL your requirements for a specific project. In reality, they will fluctuate throughout your project(s).
But, you do need to have a “big picture” understanding of what you’re trying to accomplish with technology and how you’re going to get there. It will help you make better decisions along the way of what to implement and when.
Digitization is a journey that never really ends. It’s really about embracing change and always looking for new ways to improve.
If you look back at any failed tech project, it was usually doomed from the beginning. Because stakeholders weren’t aligned on the purpose or direction of the project.
From leadership down, your stakeholders must believe that adopting tech will help create efficiencies for your projects and increase your bottom line. Everyone must believe it’s an investment in the future of your business.
Changing from any manual process to an automated one is hard. And it as much a cultural shift as a technical one.
To get buy-in from key stakeholders, you’ll need to gather their input early in the process. Ask them:
Key stakeholders can be anyone from a manager to a field-level worker who’ll be the main users of the tools.
SPARK Tip: Be open and responsive to input. Do not reject any ideas, at least initially. The best ideas could come from employees that are more “in the weeds” than you are. To help gather your team's input, download our free Custom Software Planning Survey.
Having an internal champion can mean the difference of having a smooth, successful project or not.
They're responsible for two important duties:
New technology projects aren’t small undertakings. You’ll have to work with both internal teams and different service providers to get it done. And all need to be aligned on project goals.
For some businesses, you might already have a dedicated team member with a strong technical background to lead your project. This is a great person to guide your team, while aligning stakeholders around your long-term vision for digital transformation.
However, it’s also okay if you don’t have a full-time resource or software expert to lean on. Just be sure to designate someone with strong project management skills as the main point of contact. Even without being a technology expert, they can help facilitate communication between teams and keep the project focused.
SPARK Tip: If you’re a project manager, check out our tips to learn how to communicate effectively with your development partner.
With your strategic plan as your guide, you can start looking at what pain points need the most attention.
Ask yourself these simple questions to uncover what to focus on first:
It helps to look for repetitive and inefficient employee tasks like:
When you’re looking at your current processes, think about:
You can probably think of more than a handful of your processes that could be more efficient.
But don’t get caught up in trying to change everything at once. This could lead to a messy and frustrating software project.
Any type of change to digitization is going to take some time to adjust.
Instead, start small.
Identify the processes that will have the biggest impact on your business and prioritize them. This will ensure a faster return on your investment and an easier adoption for your team.
SPARK Tip: To be successful over the long run, it’s always easier to focus on incremental improvements. It’s why we encourage our customers to start a with minimum viable product (MVP) when building custom software.
[ Read more tips on how to plan for digitization. ]
Armed with your table stakes requirements, you can start evaluating different construction management software solutions.
And there’s no shortage of options available today. Technology is more accessible than ever for all types of use cases and budgets.
But with more choices, you’re going to have to do more work to select the right solution for your crews and projects.
As you evaluate different options, here’s keys areas to consider:
What’s a “must-have” feature versus a “nice-to-have?” Keep your long-term goals in mind. Will this product still be a good fit in 3 or 5 years?
[ Read about the 8 software features your construction business needs. ]
The biggest unknown of any new digital tool is whether your crews will actually adopt it.
Even if a software has all the features you need, the solution won’t matter if your employees don’t want to use it.
Any digital tool you consider needs to be easy, fast, and simple if you want your crews to consistently use it.
SPARK Tip: The best way to test usability is to ask your crew and other employees to provide feedback on the actual software choices. Involving them in the selection process can help you avoid implementing the wrong tool.
In the past, most construction software solutions were off-the-shelf or “one-size-fits-all.”
But, most leaders realized that this approach doesn’t always work for an industry like construction where every project is different. There’s too many variables to account for.
Today, most construction leaders need the ability to customize or configure the software to their own unique processes, systems, and workflows. It’s the only way you’ll be able to truly transform your operations versus having something that almost works.
We’ll cover more about customization below.
Solutions can run the gamut on pricing– ranging from free to thousands of dollars. It all depends on the functionality and quality of the software.
Overall, your budget for new software is relative to what you want in return for it. If you can demonstrate the long-term value of the solution, then you might be willing to spend more.
Learn how to calculate your ROI below.
As you undergo a digital transformation, you’ll likely use multiple systems to run your operations: project management software, CRM, ERP, or HR and payroll systems.
Any new software you use should integrate easily into your other systems. Integrations allows you to automate data movement between them for better accuracy, time saving, and reporting.
Without integration, you’ll still have to use manual processes or other workarounds to make it “kind of work.”
[ Learn how to integrate Quickbooks with your Estimating software. ]
SPARK Tip: Be sure to ask about integration capabilities upfront. You don’t want to find out late in the selection process (or even implementation) that your new software can’t integrate as you hoped. It’ll be a waste of time and money.
Don’t base your tech decisions just on short-term needs. Maybe one low-priced piece of software solves an immediate problem, but how does it fit into your strategic vision?
Your software should help you move closer to your long-term plans. Otherwise, you’ll adopt a solution that you’ll rip out in a few months because you already outgrew it.
As you compare solutions, remember that is not always about choosing the most popular platform either. Instead, you need to evaluate and choose the tools that solve your unique pain points.
[ See how you can use this framework to evaluate project management software specifically. ]
Your first instinct might be to go with one of the many off-the-shelf construction management solutions available. It’s easy to implement and you like the price tag, so what’s the harm?
Deloitte reported that today’s technology leaders are “expected to invest in tech that creates demonstrable business value by delivering growth and innovation.”
That’s why you should consider other options like building your own custom business management software solution. When done right, the results are almost always worth it.
We’ll break down these three different software approaches and why you might choose one over another:
Off-the-shelf (or SaaS) solutions are pre-built software that are usually cloud-based and accessed through a web browser. They’re built to meet the needs of the mass market.
While off-the-shelf software might be a quick implementation, they often leave businesses wanting for more. They need more customization and functionality offered to realize the full benefit of technology. If off-the-shelf is too limiting for your business, then semi-custom and custom software can be a better option.
The opposite of off-the-shelf software is fully custom software, which is built from scratch to fit the exact needs of your business.
It’s common to think of custom software as only for enterprise projects that cost millions, but most SMBs don’t realize that their processes can warrant custom software too.
[ Read more about how custom software projects can fit a smaller budget and timeline. ]
SPARK Tip: See how you can even maximize tax law to your benefits when investing in custom software.
As Scott Pennel, President at Esper Electric states, “I was sick of paying an annual subscription fee for an off the shelf program that almost works. I wanted to build something that works exactly the way we want it to for the way we work.”
Esper Electric turned to SPARK to launch a custom management system and employee app to streamline time entry, performance tracking, and administrative processes. It helped them reduce overhead and increase employee engagement.
So, how do you know which construction software is right for your business?
Well, it depends. Your business is unique. But take the time to consider your own processes, strategic vision, and budget upfront.
But when making your decision, always let your long-term vision guide you. An option that seems best when looking only a few months out might not make sense when you think of where you want to be in 3 or even 5 years.
If you do think custom software is right for your business, contact SPARK to learn more about our fully custom and semi-custom solutions. We love talking software and new ideas.
How do you know if new technology will give you the return you want?
The answer is simpler than you might realize. You can use the same logic used to determine which tools of your trade to purchase. Just like a large piece of equipment, you can investigate and plan for the total cost of ownership along with the total return of software.
In theory, ROI calculations are a rather simple mathematical formula:
ROI = net return on investment / total investment cost x 100%
Using this approach you can easily calculate hard dollar amounts with certainty.
But your analysis should be holistic. It should also include benefits that may be difficult to translate into hard dollars, but are still important.
To calculate ROI of a new technology solution, we recommend you look at all these areas:
The easiest ROI value to identify is time saved directly from using a new digital tool instead of an outdated or manual process.
Many construction management apps will turn manual processes (like time tracking or scheduling) into efficient processes that take less time and eliminate duplicate data entry in different systems.
You can repeat this same formula for each type of employee (both field and office) or workflow directly impacted by technology.
Here’s a real-world example of a direct labor cost savings calculation from a SPARK client:
How else will your new tool directly save your company money? Are you replacing existing tools (and their monthly costs)? You can easily factor these cost-savings into your final estimation as well.
Not all cost-savings fit neatly into a formula.
Consider these potential indirect savings from technology that can also improve your business over the long run.
There will be immediate returns (like saving time and reducing errors), but the real value of technology is its ability to open your business up to new possibilities (and revenue).
Technology is not implement once and never think about it again.
With your new construction software in place, what more productive tasks could your best people be doing? What new opportunities can you pursue that your old ways would never allow?
After building their own custom software, SPARK client Andy Egan had an unexpected opportunity – white labeling. When other construction leaders saw their powerful custom software, they also wanted to use it for their own organization. Andy Egan was able to turn their initial software investment into a new revenue stream they never expected.
To help you estimate your ROI for new construction technology, SPARK has two worksheets to guide you through the process.
We built these from our experience helping hundreds of trade contractors implement digital tools to work the way their business does.
It comes down to your individual business situation and the scope of the solution you implement.
Fortunately, 90% SPARK construction clients often see a return on their investment from within 6 to 18 months as they’re focused on building fast, easy, and simple digital tools with the biggest impact.
A digital transformation is a big undertaking. Along the way–whether you have in-house tech experts or not–you will need help, especially when building custom construction software.
That’s why many businesses turn to a tech partner to help achieve their software goals.
You’ll want to work with a partner you’re comfortable collaborating with and who aligns the development process with your business goals.
When evaluating tech firms who specialize in construction tech, use these 6 strategic questions to see if they’re the right partner for the job.
The value of a tech partner is that they can help identify your project’s:
To identify these areas of your project, software development companies like SPARK start new projects with an assessment.
An assessment, or "proof of concept" is a thorough project discovery phase to understand the “why” of your project and technical feasibility of the solution. The result of an assessment is a clear roadmap that tells your partner what to build and how you can work together.
Starting with an assessment can save you headache and disappointment later. It’s a proactive way to explore the opportunities of your project and uncover any potential risks or challenges.
At the end of assessment, you will receive deliverables like a technical audit, wireframes, or product roadmap to guide the rest of your project.
Investing upfront in an assessment could save you thousands of dollars and invaluable time from choosing the wrong partner or building the wrong product. With that mindset, it can be a responsible strategy to approaching a digital transformation.
[ Learn more about what an assessment is and the value of doing one for your tech project. ]
Adopting technology is an important step forward for your business and puts in the best position to grow!
To get started, download our free construction digitization checklist below. It’ll help you think through and prepare for a successful technology project.
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