Can the right technology keep your construction project under budget and on schedule?
There’s a reason that nine out of ten large-scale construction projects go over budget. According to McKinsey & Company, major infrastructure projects like bridges or tunnels can exceed budgeted costs by as much as 35%.
And it doesn’t get any better in commercial construction. A survey conducted by international research firm IDC found that 75% of projects finish over budget, and 77% are late by an average of 70 days.
So, no–it’s not just you. Construction projects, both big and small, are notoriously challenging to keep on track.
In the era of digital innovation, new technology streamlines construction, offering an alternative to projects historically destined to miss the mark on both cost and time.
Keep reading to discover...
- Research into the proven benefits of integrated workflows for construction
- Insight into how to calculate ROI of investments in construction technology
- KPIs to measure progress against
- Three examples of integrated workflows in action
- A tool to measure your tech integration progress, as compared to peers
Understanding the benefits of technology in construction
Technology-supported workflows aren’t new. Over the past few decades, we have seen digital transformation revolutionize industries like manufacturing and agriculture. Up until now, construction has lagged, but that's changing.
The construction industry is embracing innovative technology, similar to how technology has transformed the building process in shipbuilding or commercial aircraft manufacturing.
The full impact of this transformation is still decades down the road, but now is the time to invest in new technologies that will enable future success. According to research from McKinsey & Company, the impact of industrialization, globalization, and digitalization has added $11 trillion in value–and $1.5 trillion in realized profits to the construction industry.
The good news is that you’re likely already using an assortment of tools and apps on the job to streamline construction processes. McKinsey says that attitudes in the construction industry are shifting in favor of technology compared to just five years ago.
The conversation is starting to shift from ‘why we need to use technology’ to ‘how we can use it’ to streamline construction - improving communication, speed, and accuracy.
We’re talking about bringing all of those tools and apps together, to deposit and access shared data in a single, central location (Common Data Environment). We’re talking about using technology integrations to create a connected construction environment.
And it's already happening...
Integrated workflows can improve efficiency, facilitate smarter decision-making, and boost productivity in every stage of a project. The net gains from these benefits translate to finally getting a handle on your budgets and schedules.
Did you know that more than half (65%) of contractors, designers, and owners1 realized gains in efficiency by adopting digital workflows?
Many of the construction firms that use technology also report benefits like:
- Better decision making
- Improved collaboration in multi-company processes
- Fewer change orders
- Greater cost predictability
- More productive labor
It’s clear that there are several benefits to an integrated digital workflow in the construction industry.
But here’s what you really want to know – what is the potential return on investment (ROI) of adopting new technology, and will it really make a difference?
Calculating construction workflow ROI: The key to measuring success
All of the bells and whistles aside, we get it – you need a little more than a ‘feels-like’ assessment to embrace the idea of making a big technology investment.
This is where the conversation turns to quantifying your return on investment (ROI).
Bottom line–key decision makers want to know what these benefits look like in dollars and days. Here is a quick look at how the benefits of connected technology translate to quantifiable measurements.
While it’s probably not helpful to measure everything, you can set a goal and choose a handful of KPIs that align with that goal, providing the details that you need to calculate the return on investment for new technology.
ROI = (Net Profit / Investment Cost) x 100
Next, let’s see how this works in the real world.
Example 1: Technology enables seamless field-to-office communication
Why do construction projects notoriously finish over budget and past deadlines? There’s more than physical distance between what happens on the job site and the decisions made in the office.
One survey of more than 500 general contractors in the commercial construction industry revealed that inefficiencies from poor communication, like conflict and rework, eat up to 14 hours of labor per week, per employee.
A $16B Site C Clean Energy Project to build a dam and hydroelectricity generating station over a five-year timeline highlights the need for better communication in large-scale construction projects. Connected communication from the job site to the office all the way to external stakeholders keeps everyone in the loop with near-real-time visibility into what is happening right now.
At the onset of the project, the team relied on thumb drives and hand-delivered updates back to the office–and communication primarily took place on the popular mobile app–WhatsApp. That approach always felt a little out of sync, so as the project progressed and roles changed, they adopted a connected technology approach to facilitate two-way communication in real-time.
With integrated technology, they were able to upload excavation designs with cosmetic changes so that job site crews could make necessary changes with less rework.
Compaction progress reports are generated in WorksOS for approval to move to the next section.
An integrated technology approach also helps:
- Facilitate seamless transitions between shifts.
- Promote safe working environments by allowing contractors to adjust for real conditions.
- Enables continuous review of daily job site progress.
- Provide 3D modeling for visual communication of changes in progress.
- Keep job site activities organized and productive.
- Achieve end-to-end visibility from start to finish.
- Organize multi-trade work sequences.
Ready more about the Site C Clean Energy Project.
Example 2: Efficient digital-first design & collaboration
Take a moment to imagine the design process behind building some of the world’s most impressive structures–bridges, dams, complex tunnel systems, and intercity transit systems. Each of these projects is inextricably complex.
Now, take away the pen and paper, propelling the process into the digital world. Does it look the same? Is it better? These are the questions that a pan-European bridge project dared to ask as they explored the world of connected construction through a digital-first design process.
The Randsleva bridge, completed in 2021 near Norway’s capital Oslo, is an excellent example of how connected construction technologies can solve both design and collaboration challenges using 3D modeling in lieu of traditional drawings.
“When you would traditionally work to build this with drawings, you’d need about 200 of these drawings. And when you would revise every one of those about five or six times, you would end up with 1,000s of drawings.” - Øystein Ulvestad, BIM developer, Sweco Group
This approach allowed for design, modeling, and construction to work concurrently, keeping the project on track and continuously moving forward. It also enabled a lot of efficiency through automation and standardization.
A look at the BIM design for the Randselva Bridge.
Historically, Norwegian road projects have gone over budget by 19% due to change orders. With the use of digital design, that number has dropped to just 8%. Not only are architects and engineers saving time in the design process, but they’re able to collaborate easier and communicate more effectively, which all feeds into staying on track and within budget.
The benefits of digital-first design include:
- Automated clash detection eliminates design errors upfront, ensuring that the project is buildable.
- Fewer change requests and less re-work saves time and money on the job.
- Compatible with virtual reality (VR) technologies that can effectively simulate the build process, giving contractors and project managers better visibility into the build process.
- Remote accessibility to real-time information eliminates geographical barriers.
Example 3: Safe, efficient quality control on every project
Another big drain on construction budgets that contributes to overspending is quality-related rework. Typically, this type of rework adds up to between 5 and 15% of actual project costs, so on a multi-billion dollar project–it’s a significant cost.
Connected technology not only improves the quality control process, eliminating much of that rework and the costs associated with it, but it also improves the safety of conducting quality assessments.
A mega construction project to lay more than 900,000 feet of piping for a petrochemical refinery took a connected approach to gain underground visibility with real-time feedback delivered with mobile accessibility that put everyone on the same page.
This newfound level of confidence led to stronger decisions and less rework because the team in the field was getting each phase right the first time.
Construction technology promotes better quality control through:
- Automated inspection tools that eliminate human involvement in high-risk conditions.
- Connected devices that gather current-condition data as each phase of a project progresses.
- Statistical process control predicts trends and deviations with accuracy, preventing problems before they happen.
- Real-time monitoring and visualization features provide transparency, allowing quality control with detailed comparisons of what is occurring on the job site compared to what is supposed to occur according to the models.
Read more about how technology changed the game for Performance Contractors.
Effective construction technology erases traditional boundaries, bringing global teams together to solve for the root cause of delayed projects
Now that we’ve addressed the many reasons why construction projects gobble up their budgets, let’s talk about the other elephant in the room–projects that drag on well past deadlines.
A lot of lost time comes from rework and inefficient workflows–two things that we have already established can be improved with technology. But more specifically, let’s peel back another layer to talk about why construction projects are often so incredibly inefficient.
It all comes down to communication. With limited technology, there’s a lot of missing–and sometimes outdated–information being shared.
Think of a game of telephone telephone. If a side conversation inspires a change order in the middle of that line, only the second half of the team has the current information. Everyone else is still using the original information to make decisions and respond to questions.
Or, the team at the end of the line has to wait for the message to go back up the chain and start the process over. Either way, the end result is inefficiency. Either the teams at the job site are working with outdated or obsolete instructions, which means any work completed might need to be redone. Or, they’re playing the waiting game, losing time and money as the project gets delayed in the process.
Connected construction technology offers an alternative that addresses the root cause of delayed projects, enabling everyone to communicate on the same level–at the same time with centralized data.
Are you ready to explore what’s possible?
When you take away all of the jargon, innovation is really just a new way of doing the same job, but better.
That’s essentially what connected construction technologies offer: enabling ways to work better together.
Curious how your digital workflow adoption measures up to your peers? Find out in this benchmark survey, based on data from Dodge Research & Analytics.
1 Connected Construction: Perspectives Across the Project Team, Dodge Research & Analytics, 2022. View full report.