If you view information technology (IT) as a necessary evil, you’re not alone. The construction industry traditionally has spent less on IT as a percent of revenue than most other industries. However, that’s quickly changing.
As the economy makes its slow recovery, contractors whose staff is still stretched thin to keep company costs in check are looking at how IT can help them do more work with fewer resources. These contractors are making IT a more significant part of their strategic plans and are leveraging the latest applications and devices to deliver results.
IT Trailblazers
You might be surprised at who is leading the way in technology use. It’s not necessarily the large construction companies. Today’s IT advances, such as many of the new cloud-based applications, are leveling the playing field for small- to medium-sized construction firms, giving them capabilities they couldn’t afford before.
A good example is Dean Crowder Construction Inc., a 25-employee paving contractor based in Bentonville, Ark. Last year, the company was looking for a way to keep its personnel in the loop while in the field. They purchased eight iPads for the company owners, project managers and foremen. They also added a cloud-based mobile application that links with their accounting and project management systems in their main office.
Today, their project managers can access updated cost data, summarized payroll information, estimates and schedules from the jobsite. Tablets make it possible for the company’s foremen to view scanned plans without leaving the piece of equipment they are running. The company is also using its mobile capabilities to enter timecard data and submit field reports and photos. According to Dean Crowder Construction office manager Maeva Mayes, using mobile technology is helping them accomplish more work with fewer staff members while keeping their teams in the field where they are most productive. This strategy has helped them grow revenue without growing their payroll.
Information technology is also fueling growth for companies such as Pinnacle Construction Support Group of Tallahassee, Fla. The forward-thinking general contracting and construction management firm embraces technology as their platform to deliver improved customer service.
Consider a trend shown in the 2013 Construction Technology Integration Survey, sponsored by JB Knowledge Technologies Inc. According to the survey, 82.8 percent of contractors said integrated software is important to their company’s internal processes and overall efficiency. Yet, 28.3 percent of contractors surveyed have no software integration, and 29.7 percent have only two integrated applications. Not so at Pinnacle/CSG, where its integrated software system runs through all areas of the company, including business development, estimating, accounting, risk management, human resources and the field. According to Pinnacle/CSG assistant controller Melissa Smallwood, the company is so cloud-based and integrated that they’re able to move paper in a virtual sense more quickly and efficiently. This strategy improves communication and collaboration among staff and with subcontractors, suppliers and clients, which is critical for delivering successful projects and keeping customers satisfied.
A Strategic Approach
What both Dean Crowder Construction and Pinnacle/CSG have in common is their strategic use of technology. Their IT investments start with a business goal and end with measureable results.
Understandably, the recession caused many construction firms to put their IT plans on hold, but underinvesting in IT for extended periods of time could put your firm at a competitive disadvantage. According to the Bureau of Labor Statistics, 70 percent of U.S. productivity growth comes from IT.
Lack of an IT strategy could also hamper your ability to attract and retain talented younger workers. These “digital natives” demand easier, more convenient ways to communicate and collaborate in and out of the office. They know how to use technology to improve both their individual and company performance. If they don’t have what they need to do the job efficiently, they will go elsewhere.
Practical Planning
You wouldn’t start a construction project without a plan. Likewise, you need an IT plan to get the most from your technology investment. Whether you are creating a business case to address one key issue, an annual plan or a multi-year strategy, the following 10 tips will guide you through the IT planning process:
- Start with your objectives. Defining your most important short- and long-term goals will help you determine what technology will most align with your strategy.
- Assess weaknesses in your current IT infrastructure. Are some applications outdated or inefficient? Do you lack integration between important systems? Can your team access enough information at jobsites?
- Get feedback from your employees. What technology do they need to do their jobs more effectively? If you’re getting requests from employees, consider adding those requests to your strategic plan.
- Define the expected benefits. What positive impact do you expect each new technology to achieve? Benefits may include increased productivity, decreased costs, better communication or more satisfied customers.
- Calculate a clear ROI and include a payback timetable. Consider both hard savings (for example, eliminating an in-house server) and soft benefits (for example, greater efficiency or easier collaboration).
- Define the cost of doing nothing. In addition to the ROI associated with carrying out your IT strategic plan, include a description of the risks and potential costs of not investing in new technology.
- Consider a phased approach. You don’t have to accomplish everything at once. Sometimes it can be more cost effective to adopt technology in stages. It can also be easier for employees to adjust to incremental changes.
- Find the budget for IT investments. Demonstrate how your proposed IT initiative will fit into the corporate budget. A phased approach may provide progress now without breaking the bank.
- Be mindful of longer-term goals. Although you may be planning initiatives for this year, look two, three or even five years down the road. Investments made today should help build the IT infrastructure you will need later.
- Plan to get employees to use new technology. Does your company culture encourage change? Do you need to provide additional training? What processes can you put in place to help employees adopt new technology?
IT planning doesn’t have to be an all-or-nothing proposition. Even if you incorporate just a few of the above best practices, you will be well on your way to reaping the benefits of strategic IT decision-making.
