Building Better: How New Technology is Making Construction More Efficient

“Software is eating the world,” wrote Marc Andreesen back in 2011. Over a decade later, nearly every industry has transformed dramatically thanks to implementation of new technology. Even construction, long infamous for cost and time overruns, is now achieving enormous efficiency gains by gradually embracing technology. 

The need for greater productivity in construction is obvious. According to McKinsey, labor-productivity growth in construction averaged only 1 percent a year over the past two decades globally, compared with growth of 2.8 percent for the total world economy and 3.6 percent in manufacturing. Many construction companies remain hesitant to undertake large-scale projects with tools that can be seen as experimental and unproven.

Latecomers to the technology boom in construction face a choice: get on board now or get crushed in the future. The industry can expect increased pressure from governments, partners, and investors to modernize their operations. Almost $10 Billion has been invested in construction technology in the last three years alone (2019-2021) with no sign of slowing. 

Let’s dive deep into how technology is transforming construction and how companies can get on top of the trend before it’s too late. 

Functions Impacted by Construction Technology

From planning to execution and all the way through follow up, technology is transforming how construction projects get done. Innovations in analytics, digitization, machine learning, and the internet, have given substantive advantage to construction firms at the forefront of adoption. All of the following are areas where new technologies are making operations more efficient and cost effective:

Opportunity Management: Software tools including Customer Relationship Management software (CRMs) like salesforce, are helping construction companies win the right bids and acquire projects.

Talent Management: Human resource software helps construction companies hire and staff the correct number of people for each project. 

Supply Chain Management: Assists procurement of cost-efficient materials, tools, equipment, and supplies in a timely manner.

Project Execution: Project management software is helping construction companies achieve Seamless project execution from start to finish. 

Continued Support: Digital tools help construction firms with Subsequent operations and maintenance to provide support to the completed project. 

The Pandemic Accelerates Progress

The COVID-19 pandemic has magnified the impact of technology on the construction industry. As a result of hybrid and remote work, alongside increased demand, the past three years have accelerated application cases for remote monitoring, auditing, progress, material ordering, and tracking in large-scale construction. 

No area of construction is this acceleration more pronounced than in hiring. According to Nick Grandy, a construction and real estate senior analyst at the consultancy RSM US, there are roughly 25% more unfilled construction positions than hires as of June 2022. This shortage is driving up labor costs, turning projects that should cost $500 Million into projects that cost $600 Million. 

Technology can help construction companies adapt to these increasing labor costs. Utilizing technology-enabled systems, construction companies and stakeholders can efficiently track and monitor on-site activities for all project sizes. These planning and execution tools Enables users to estimate the cost of construction resources, execute activities, and track progress quickly. 

The Future of Construction Tech

The rapid acceleration of technology construction shows no sign of slowing any time soon. These changes are here to stay in both public, private and residential projects. 

In residential construction, the preference has shifted from full human engagement to primarily digital interaction from the design phase to handover. This allows contractors to give a greater level of communication even with fewer in-person touchpoints, increasing overall efficiency. 

The core of contemporary construction convenience is the software solutions that provide a digital DNA to construction project management. The different technologies are assisting in the improvement of the complex end-to-end workflow structures that are manifested by the industry at different stages. As a whole, the industry can only be successful if the framework is streamlined and carried out efficiently.

Challenges for Construction Technology

Implementing new technology still faces financial and operational hurdles. Many executives struggle to implement technologies in a manner they like due to inefficient operating rules and cautiousness. Adapting these operations takes time and iteration, but rewards come to those patient enough to achieve the potential efficiencies. 

As the world becomes more urban and infrastructure remains a key challenge, construction spending will remain high. Demand for residential, transportation, power, and sewage projects will keep construction busy to meet needs. One critical question remains: who will make the technological investments to improve efficiency? 

Even small boosts to productivity from technology can have major financial impacts on public and private spending. The burden of tech investment does not need to fall on construction companies alone. Public and private investors can aid the development of a more efficient construction industry through the broader deployment of new technologies.

For example, federal and local governments may craft a digital construction strategy that encourages the use of new tools to reduce the time and cost of public work projects. As with any strategy, clear targets could be set for project timelines and defining and tracking clear budget marks. In an industry where small improvements go a long way, these investments can quickly prove worthwhile. 

Bringing It All Together

Technological change will always have its resistors. ““The reason why it is so difficult for existing firms to capitalize on disruptive innovations is that their processes and their business model that make them good at the existing business actually make them bad at competing for the disruption,” wrote Clayton Christensen in Innovator’s Dilemma. Excellence in traditional construction doesn’t easily translate to great software implementation. 

However, technology that helps the organization visualize and execute on the broader company strategy can help overcome these hurdles. Align’s strategic planning and goal tracking capabilities can enable efficiency-enhancing improvements. 

“When we’re able to draw the connections between our company’s big strategic goals and our team member’s individual tasks, we get worker buy-in and enthusiastic employees,” says Gootee Construction CEO Ben Gootee. “And when our customers interact with employees that are excited to work with them, then you’re going to have enthusiastic customers, too.  That’s what we’re looking for.”

To learn more about how Align can enable strategic change for construction and non-construction companies, join us for a demo today!