The Digitization Landscape In The Construction Industry

Digital transformation is now top of the agenda for many construction firms, becoming a high-priority initiative to maintain competitiveness in a tough market.

Executives across all industries are aware of the benefits of digitization, with most organizations implementing construction software at some level across the business.

To those of you who are not familiar with the concept, digital transformation is the integration of digital tools to optimize processes and make them more efficient. It has been proven to create significant value for construction firms, with a swift ROI and increase in productivity.

Despite this, automation in the construction industry is not where it should be. FlowForma, in partnership with Construction Dive, has conducted a survey with 100 key construction decision-makers about the current state of digitization in the sector, with a strong emphasis placed on construction workflows and business processes. In this blog post, I will highlight some of the key findings we discovered from our research.

The Importance Of Business Outcomes With Construction Digitalization

From our extensive survey, the vast majority (94%) of construction executives and managers want to improve employee safety on-site. The industry has extensive safety requirements, given the nature of the job, and negligence of health & safety regulations can be costly to a construction firm.

For Health & Safety Managers within the construction sector, risk assessment plays an important part. Potential hazards on a construction site require critical examination and careful documentation – manual administration can lead to human error.

A majority also view operational efficiency on construction projects as a priority. 87% of construction executives and managers view an increase in operational efficiency as either very important or absolutely required. A high level of operational efficiency means that construction firms avoid overruns and complete projects on time and to budget.

Data is not just a commodity for business leaders. It’s a real business asset and leveraged for business strategy and decision-making. According to our survey results, real-time project analytics informs decision-making for 96% of construction executives and managers.

Furthermore, 92% consider data insights as a high priority business outcome, rating it as either very important or absolutely required. Process automation and BIM tools enable real-time data access, high data quality, and allow users to access data when offline – useful on a construction site with limited online capabilities.

For a digital landscape in which multiple applications are used simultaneously, it’s important that systems talk to one another, feed through data, and promote collaboration across the value chain. 88% of construction executives and managers want seamless integration of multiple solutions.

Integration of tools is necessary to create a holistic data picture, generate transparency across project lifecycles, and promote better collaboration between teams.

From our survey results we learned that construction executives and managers would like a workflow tool to integrate with the following:

• Finance systems
• Project management software
• Document management software
• CRM systems
• ERP systems

Roadblocks To Digitization In Construction

Implementing a digital strategy can seem a difficult task for construction business leaders, especially those with little management support or engagement. Very few construction firms have fully digitized their processes, and construction remains one of the least digitized industries.

According to survey results, the biggest obstacles to digital transformation are:

• 50% of construction executives and managers claimed to be satisfied with current processes. However, a high percentage (90%) still use outdated methods (email/
  Excel/paper forms) for 25-100% of their business processes, and 47% of respondents rated their firms at either a beginner or intermediate stage in their digital capabilities.
  
  
• A major roadblock to digital transformation is the perceived burden on IT staff. Many construction executives believe that digital transformation cannot be supported as a strategy without the IT team behind it, or that a lack of IT talent prevents the necessary change.
  
  
• Our survey results, 53% of respondents see security concerns rising from remote data access as a challenge for their company. Remote access can expose a construction business to cyberattacks and malicious actors, given its lack of physical security controls and potential unauthorized access to systems. Security is a major concern for executives wanting to implement new digital solutions.
  
  
• The Infrastructure Improvement and Jobs Act will funnel around $1.2 trillion into United States construction projects, including the nation’s roads, water systems, and bridges. The bill is expected to create more projects for construction firms that specialize in infrastructure and provide an uptick in construction activity. 85% of construction executives and managers think the Infrastructure Improvement and Jobs Act will have an impact on project pipelines.

An Upswing In Digital Transformation In The Construction Sector

Digital transformation in the construction industry is starting to take hold with industry leaders increasingly aware of its benefits. In Construction Dive’s survey, respondents are typically forward-looking, with most expecting to expand digitization efforts over the next 18 months. The value of digitization is clearly understood, with 87% of construction executives and managers accepting that it gives construction firms a competitive advantage.

Despite this, just under half of construction firms are still at a beginner or intermediate stage of their digital capabilities. And a clear majority still use outdated methods (email/Excel/paper forms) for 25-100% of their business processes. These businesses must adapt, or risk being pushed out of the market by more technologically advanced and innovative firms.

Digital Construction Survey Report

Download our latest construction report created from the feedback of our construction survey results, to learn how organizations are successfully digitizing everyday business processes within departments such as HR, Finance, and more.

No matter what stage you're at on your digital transformation or process automation journey, or what industry your company operates in, this report has valuable insights, benchmarking resources, success stories, and recommended tips for going further and gaining a competitive advantage.