Here at Constructech, we have been covering the construction technology space for roughly three decades. We remember when BIM (building information modeling) was a new concept and when the talk of the tech show was data silos. But has much changed in the past three decades or has much stayed the same? For today’s blog, let’s unpack a new report that looks at construction digital transformation.
A new report from Intuit provides some interesting insights into the state of construction findings. Let’s unpack each of these findings briefly and see if it aligns with what we are seeing in the industry.
A Fragmented Frenzy
Perhaps the biggest takeaway here is that a typical business uses 10 different apps per business and 75% of construction decision makers say they spend too much time managing data due to disconnected technology stacks.
We would say yes, this seems in line with many of the trends present in the construction industry. There are still far too many siloed platforms across businesses, creating a disconnect for construction companies. An FMI study back in 2020 suggested bad data costs the industry roughly $1.8 trillion globally and $88 billion in avoidable rework. Yikes. Just imagine the numbers today.
This might be a forgiving estimate too. According to IDC Market Research, companies lose roughly 20-30% of their revenue annually due to inefficiencies caused by data silos. That’s a lot of money left in the middle of the table.
The Intuit report goes on to say 92% want a single, integrated platform to manage the projects and financials. You think?
There isn’t going to be an easy fix for this. It has been something we have been talking about literally for decades. At this point, it is up to each individual construction company to create and leverage systems that eliminate as much redundancy as possible.
A Growing Gap
There is one other big takeaway from this report that is important to note. The difference between average and large construction companies. The Intuit report suggests the average construction company invests $58,000 annually on software—that’s average. There are certainly those investing more and those investing less.
Here’s where this gets interesting though. The largest firms plan to invest an average of $120,000 in technology improvements in the next 12 months. These high-growth firms have a workforce that is 45% more skilled in AI and they invest 47% more in technology than the average construction firm.
The question then remains: Will the gap grow bigger between large construction firms and small-to-medium-sized construction firms? What will this ultimately mean for innovation in the construction industry? Will the small firms be left behind? These are all things we will be left to ponder in the days ahead.
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