Digital Transformation and the Construction Industry: Technology Adoption Challenges

This article is part of series focused on the benefits, challenges and impact of digital transformation on the construction industry and how companies can embrace change.

The global construction industry has a vast number of technology solutions available for construction activities, but many contractors are still using traditional processes.  

Based on a recent Dodge Construction Network (Dodge) survey, only 61% of trade contractors are using either commercially available software or internally developed/modified software to manage their key construction activities (preconstruction, project execution, and performance analysis). The remaining contractors are still using manual methods including spreadsheets, whiteboards, or printed paper.

Additionally, the survey proved that 55% of trade contractors use software for workforce related activities and 63% use software for financial management.  Why has the industry not seen a better technology adoption rate?

There is Too Much Technology

There can be many challenges involved when implementing technology, especially if multiple technology tools are required. In the Dodge survey, 44% of trade contractors responded that they utilize more than one technology tool but have a primary software they use.  Based on the responses of trade contractors that utilize more than one primary tool, their top five cost management challenges include:

1. Managing change orders and documentation through the whole approval process
2. Status reporting during the project
3. Effectively integrating cost and schedule information
4. Tracking costs for every aspect of the job to determine how they impact overall project costs
5. Tracking units of work completed in the field

To combat the challenges presented by utilizing multiple pieces of technology, it’s important to follow proper implementation strategies to ensure success.  Best practices for technology implementation include identifying business needs and confirming the technology meets requirements before implementing, developing and following a phased rollout plan that allows for incremental corrections, a structured process for engaging all stakeholders, metrics to determine success against identifiable needs, and openly communicating about progress towards mutually understood goals.  

Significant Resource and Capability Gaps

When it comes to implementing construction technology, some of the other main challenges include are resource availability and capability gaps. The top five challenges include:

1. Too much training required
2. Lack of time to evaluate technology options
3. Lack of internal capability to implement/manage technology
4. Resistance from field staff
5. Lack of senior management support.

Persistent labor shortages highlight the strain on resources (time and money) to successfully implement technology, specifically when it pertains to back-office functions.  Training time and change to standard practices may lead to resistance from those on job sites.  The combination of these things lead to the perception that there is a lack of time available for organizations to evaluate technology options.  However, the upfront ‘investment’ of time to implement technology often equates to efficiencies gained and that time, plus some, ultimately being given back (i.e., expanded capacity). 

Owners are Increasingly Requiring Use of Their Tech

The Dodge survey revealed that owners are increasingly requiring contractors to use their tech. The most common tool owners require contractors to use is their Project Management Information System (PMIS). PMIS is an information system consisting of the tools and techniques used to gather, integrate, and disseminate the outputs of project management processes. Per the dodge survey 90% of contractors have been required to use the owners PMIS system on previous jobs. The top risks contractors face when using an owners PMIS include:

1. Increase in general conditions cost
2. Lack of proper documentation in the event of a claim
3. Lack of project performance information
4. Lack of project performance reports.

While external parties requiring the use of their technology onto contractors can be burdensome, it is inherently providing companies with an opportunity to evaluate their own existing technology and its ability to support their business needs.  In some ways, it is forcing companies to consider technology adoption at a more rapid pace than they would have without the external nudge.

In our final article of this series, we will discuss embracing technology in a construction environment.

If you have any questions on how digital transformation may benefit your organization, please contact our team at [email protected] or visit www.schneiderdowns.com/digital-transformation.

Related Articles

• Digital Transformation and the Construction Industry: Digital Workflows
• Digital Transformation and the Construction Industry: Combating Challenges and Realizing Benefits
• Digital Transformation and the Construction Industry: Embracing Technology

Digital Transformation Resources

• Schneider Downs Digital Transformation Articles
• Schneider Downs Digital Transformation FAQ Guide
• Schneider Downs Digital Transformation Solutions Overview
• Schneider Downs Whitepaper: Key Indicators Your Organization Can Benefit From Digital Transformation
• Schneider Downs Whitepaper: Navigating the Digital Transformation Roadmap

About Schneider Downs Digital Transformation

The Schneider Downs Digital Transformation team leverages technological innovations and our business expertise to develop strategic transformative solutions that drive business process improvement for organizations of all sizes.

To learn more, visit our dedicated Digital Transformation page.