Digital era for construction industry!

All industries are going through a digital transformation right now. Robots and applications do many manually repeating jobs. What becomes precious nowadays is the information – accurate, precise and timely.

We live in such a fantastic time where we are creative, empathetic, artistic and loving and at the same time – so technologically driven. And I point these values because no technology – no matter how advanced – will ever replace us as people. Feel free to comment if you agree or disagree.

The construction industry faces so many changes that I am happy to be part of the transformation.

I believe that not only the technology but also the culture will need to change, and the construction companies will need to adapt to the new digital era to survive.

Define the problem

Currently, many companies struggle with cash flow management, cost control, and time tracking during the project. That’s the problem due to poor planning stage and forecasting.

Many companies realize after the project starts that they need more money to finance the project.

Measure the problem

So when we want to measure the process performance, we find waste:

1. Overdraft charges and finance charges

2. Idle time on construction sites – wasted time

3. Wasted materials

4. Overspending due to re-work

All these wasted costs add up and create a loss. As a result, we increase our initial budget and lower the margin. Very often companies finance one project with another and fall into a debt chain. I don’t need to look far for examples. Not so long ago Carilion collapsed.

Analyze the process and find the root causes

It is not only the waste that generates the problem. It is very often lack of proper budget. Lack of cash flow and poor terms of payment play a central role in the performance of the project.

I think one of the main issues is also the poor planning and the design stage as well as low-cost policy. Many contractors pay a lower rate for a lower quality job and end up paying twice as much for repairs. What is the point paying less at the beginning and overspend in the end? Changing the focus from cost to added value calculation may improve any project!

Many business owners think that they need to be the multi-million company to start proper planning? That is false thinking. You may sign for a project worth million of pounds tomorrow, and without adequate planning tools, without a culture implemented from the very beginning, I am afraid you will struggle.

Improve the processes 

What can be done to succeed with the project?

1. Digital tools

There are great tools and brilliant technology that allows you to control the project in real time. Once you have your budget set up together with the project plan you can manage the actual outcome and allocate the time and costs to the project. This way you can have constant control over all the expenses and activities.

On top of that, you can follow the progress of the project and check that you stay on track with all the schedules.

Remember that the best way to schedule the project is a Gantt Chart showing the critical path of the project. Allow enough time for design and planing as it will pay off at the end.

Today’s technology allows you to collaborate and communicate with all the team members. There are many apps which will enable to take pictures on site and report any issue in real time. You can sign off the job and confirm the stage completion on site. Any issue arising should be reported immediately, so you can take the necessary steps to fix the problem.

If everyone is involved in the success of the project – it has higher chances that it will succeed.

2. Cloud accounting

That time when the actual expenses and invoices were placed in the bags and boxes is over. I am still amazed how many companies use that method while having access to great software such as Receipt bank to scan and email all the bills.

If you want to control real-time costs and time allocation for the project, there is no storage for bills, but everything has to be recorded as it happens. And yes the good news is – it is possible!

We can control the forecast and compare to actual figures in real time. Such control gives you a great decision-making tool – Real Time Information.

Control the process and future performance

Once you start using all the benefits of digital tools you can improve any future projects performance and eliminate waste.

By analyzing past projects and the reasons for failures, you can avoid them in the future.

Thank you for reading. If you would like to find out more about how we help construction businesses – call us today, and I am happy to arrange a nonobligatory chat to see how we can help your business.