Construction Firms Have Much to Gain as COVID-19 Drags Them into Tech Modernity

Construction Firms Have Much to Gain as COVID-19 Drags Them into Tech Modernity by Sandy Shoemaker an ESOP Advisor.

BY MIKE LOPEZ AND BOB TINGLESTAD
PLANTE MORAN, A MEMBER OF MULTIPLE AGC CHAPTERS

Fax machines, paper records, spreadsheets and landline phones are going the way of the dinosaur in most industries. Yet those and other outdated technologies have kept a stubborn foothold in construction, especially once you step down in size from the top-tier firms. 

The family-run nature of many construction firms has contributed to the slow pace of change, with leadership often viewing IT as just a cost center rather than the driver of productivity and innovation that it can be.

A 2018 Harvey Nash/KPMG survey of construction industry CIOs found that just 23 percent had a “clear digital business vision and strategy” compared to 32 percent in other industries. A full 54 percent of construction firms entirely lacked such a strategy.

Document management systems at construction firms are often outdated and unwieldy, resulting in poor information-sharing and an over-reliance on one or two individuals. In the highway contracting space, for example, it’s still common to see workers printing tickets at truck weighing stations and stacking up the papers, which eventually appear at headquarters a few days later.

Many firms have also been slow to embrace the advances in mobile technology that can lead to much faster, smoother communications between work sites and the office. Meanwhile, construction firms’ IT teams tend to be small, often too overwhelmed to think strategically.

The good news is that there are signs of change. And with the industry so far behind in its tech adoption there’s a lot of low-hanging fruit to be picked in terms of productivity and efficiency gains.

Even before the coronavirus pandemic, more construction firms were starting to see the light on technology. But the pandemic has turbo-charged the trend to modernize by exposing how poorly prepared their communication and information systems were for the arrival of remote work. Companies tended to have a heavy reliance on people coming into the office and lacked the necessary bandwidth and connectivity solutions to support a remote workforce.

There are several key areas where construction companies are moving to raise their tech game.

More companies are trying to consolidate their systems, servers and applications away from on-site infrastructure and into cloud solutions like Azure and AWS. This transition to systems from people often allows them to reduce IT and administrative staff costs.

While it takes an investment, the cost is often easier to swallow because cloud solutions mostly follow a monthly subscription model, allowing firms to scale their licenses up or down depending on their project flow.

Companies are also embracing better collaboration and communication tools. They’re moving from basic, free file sharing tools to enterprise solutions with secure portals that allow for superior real-time updates and collaboration.

The pandemic has prompted a big shift to remote-working tools like Zoom and Microsoft Teams that often require technical support and upgrades. Field operations are also benefiting from a bigger focus on technology as cloud-based communication systems offer workers the speed and connectivity they’re used to in the office.

The data-driven journey is being increasingly prioritized by companies. With the increase in remote work, staff can no longer just turn and ask a co-worker about the status of a job or a delivery. This makes it critical to have trusted data and information easily available for decision making.

Moving up the technological food chain doesn’t have to be hugely disruptive to construction firms, but neither is it something that can be done at the flick of a switch.

There are three key elements that companies need to consider before they embark on the journey.

1. Preparation and planning. Upgrading to new systems can be complex and requires getting a lot of moving parts aligned. So, the more planning and preparation that can be done in advance, the better. Leadership needs to have a full understanding and buy-in on the project costs and timeline.

2. Do you have the right IT team in place? The tiny, over-stretched IT teams found at many construction firms are unlikely to have the capacity, knowledge and/or skills to implement the transition alone. Consequently, you’ll need to plan and budget for third-party support and/or additional hiring of IT talent.

3. Change management. Clear, consistent messaging from the top is vital to achieve the cultural shift that needs to go hand-in-hand with technological change. As well as buying into the change themselves, leadership needs to ensure that all staff are prepared for the change and understand the need for it. For industry veterans in particular, the pace of change in recent years may seem dizzying and can lead to resistance over losing tools they’re comfortable with and embracing abstract concepts like moving to the cloud.

By preparing well and getting the right mindset in place, construction firms can significantly increase the likelihood that technology change will go smoothly and deliver the results they need for post-pandemic survival.

Mike Lopez is a partner at Plante Moran, leading the managed IT and IT project groups in the Rocky Mountain Region. Bob Tinglestad is a partner at Plante Moran, leading the construction analytics practice. Plante Moran is a member of multiple AGC chapters.