Enterprise resource planning (ERP) solutions are a necessary component to any large operation, as they facilitate an enhanced level of collaboration, organization and structure for otherwise unwieldy institutions. Capital project management and other large scale endeavors must possess intricate, overarching planning to ensure deadlines are met and everything flows smoothly from the beginning of a project to the end. However, not all ERP is the same, and owners should seek out ERP that is appropriate to the needs of their business, their workforce and the modern construction environment.
Specific versus generic
For one, this means that companies should not rely on generic ERP systems. While industry-specific solutions often possess a greater upfront cost in comparison to broader offerings, they also include tools tailored to the needs of contractors. Construction project controls for change orders and subcontractor management are more effective when they are actually made for that purpose. Remodeling Magazine highlighted the ways in which industry ERP is superior to other options, and noted that it often allows for faster turnaround and helps enforce best business practices.
Small inefficiencies can build up over time, causing long-term losses. They may be subtle, but on large projects, they can result in a considerable expense. As they are more accurate, purpose-built ERP solutions will avoid many of the problems resulting from generic software. Arguably, ERP that fails to optimize either criteria is failing as a resource planning solution.
Modern versus old
Owners should also avoid ERP that still looks and functions like the same technology from a decade ago, or longer. Unfortunately, many ERP providers have still not caught onto the drive for friendlier, easy-to-use systems. The consumerization of IT has caused many industries to rethink how they design their applications, as users now have certain expectations about how they can work. Programs created with modern interface elements can enhance workflow, but not all ERP options have caught up with recent trends in business solutions. Non-intuitive control elements can slow down productivity and efficiency, as well as increase the amount of training needed when new employees begin using the software.
Another issue with older ERP stems from the lack of interoperability and significant customization. Some ERP environments are aggressively insular, with little inter-functionality outside of the solution itself. This can be costly when construction companies want to integrate BIM, BYOD or cloud-based applications into the workplace, as connecting the technology may prove frustrating if not impossible. Data locked in vendor-specific formats discourages collaboration with subcontractors, architects and the other entities often partnered with a firm, and also runs the risk of denying businesses the ability to integrate newer devices and software into their operations. Few analysts could have predicted the introduction of the smartphone and tablet, yet both devices have gained widespread acceptance among consumers and industry professionals alike. ERP that cannot communicate with mobile equipment in even the simplest capacity may diminish a firm's effectiveness, because workers will use their phones and tablets, and the more they can integrate them into the job, the better.
TechRepublic reported on some of the common mistakes professionals make with ERP and noted that training is one regular concern. It added that workers often have more responsibilities now than they did before, and that employees often need additional, enhanced instruction to understand all of their duties. With employment shortages currently affecting the construction industry, asking workers to perform more tasks may be necessary, and any reduction in education time will allow them to work faster and more effectively. Simpler ERP can enable this change.
Modern ERP solutions should reduce the learning curve compared to legacy solutions, and create a more open, interoperable environment that encourages exchange with multiple partners. Standardized filing that works across multiple systems will also allow businesses to integrate new technology more easily. Innovations such as Google Glass or smartwatches could potentially be advantageous to the construction industry, and firms that can optimize their performance will see the most benefits from the devices.
As with any major endeavor or purchase, adopting ERP software should not be taken lightly. Companies should research the matter in-depth to ensure that they are receiving the solution that is right for them, and one customized to their needs. This begins with choosing construction-specific technology, rather than less focused ERP. Then, decision-makers should emphasize ERP that can be tailored to the firm. Even within the industry, many businesses may look vastly different due to the types of projects they usually take on or the scale of work they typically perform. Various levels of specialization, regionalism or other factors may all influence what is best for an enterprise. Owners should be aware of this as they move to implement ERP into their operations.
Finding skilled, quality labor is difficult in any industry, but construction has recently felt this shortage more keenly than most. According to an Associated General Contractors of America (AGC) survey, 74 percent of construction firms have had difficulty hiring craft workers such as carpenters and laborers, while another 53 percent reported having a similar problem with projects supervisors, estimators and engineers.
This comes right on the cusp of economic recovery, and it may stall further efforts to expand building projects and meet the demand for construction.
Part of the problem stems from the number of workers who have left the industry. Five years of reduced construction work drove many craftsmen and professionals to seek jobs in other markets.
"After a strong rebound in 2012, construction hiring and spending have been stuck in neutral through most of 2013," said Ken Simonson, the AGC's chief economist. "Yet the unemployment rate for former construction workers hit the lowest August level in five years, suggesting that experienced workers are leaving the industry rather than returning to it. As a result, firms are already having trouble finding workers."
Training is one option
Because of the ongoing hiring difficulties, the AGC has urged the government to invest in construction education and training programs, as well as permit more guest workers capable of working in the industry, but neither of these endeavors will help construction companies in need of skilled laborers now.
However, 48 percent of respondents to the AGC survey stated they are mentoring future workers now, and 47 percent are offering internships. Another 33 percent are supporting high school construction initiatives and 38 percent are attending career fairs. These projects may work in the long-term, but they could take years to fully train new employees.
The Herald Tribune suggested that military veterans are another option, due to tax incentives and a significant number of veterans seeking a job. The tax breaks can help make up for the cost of training a new employee and would help improve what appears to be a shrinking pool of able laborers.
ERP can improve workflow
Due to issues like this, it is important that firms work as efficiently and productively as possible. Enterprise resource planning (ERP) suited to individual companies can enhance workflow and allow firms to get the most from their current staff. While manpower cannot be fully substituted, effective construction project management can create an environment in which each worker performs more productively, and all levels of a project are streamlined. Better handling of inventory, change orders, the supply chain and other matters can all speed up the process. Improvements in how a firm is organized and limiting the number of redundancies, operations such as inputting multiple figures on the job, can let owners do more with what they already have.
The current construction job market may also lead to an increase in wages as the industry demands more workers. Those individuals still involved in construction will be able to bargain from a stronger position, and those considering joining the field will also be able to ask for more. Since this runs the risk of raising bids and decreasing a firm's overall profits, better construction payment management systems will also become a more important part of companies' continued success. More thorough accounting practices may also be able to adjust for this shift and allow businesses to experience similar, or even greater, margins on each project. Finding room for higher wages will also minimize some of the staffing issues that other owners are enduring, and may attract some people back to the business - many former builders are still around, and might be enticed back to their old jobs for the right price.
Uncertain times often call for more conservative business practices in order to ensure continued success and fiscal viability for the foreseeable future. Few industries can match the volatility of construction, which is dependent on a number of outside factors. The desires of the public and private sector, as well as the bidding process and the state of the overall economy can all drastically affect construction firms. During the past few years, a level of increased efficiency was considered by some to be the most important trait that a company could possess - and to a degree, it still may be.
Rather than focusing on cutting costs, construction companies may be better served trying to improve collaboration throughout their endeavors. According to PMI's 2013 Pulse of the Profession study, communication plays a key role determining in how much money can be lost on a project, as well as potentially meeting, or failing to meet, objectives. For every billion dollars spent on a project, $135 million is at risk, and more than half of that is due to poor communication. While the state of the economy remains hard to predict, current positive trends should give firms an opportunity to shift business strategies and emphasize collaboration within the work structure.
Better communication can lead to greater success
One finding from the study was that high performing firms create formal communication plans for nearly twice as many projects as less successful companies. They also 1.7 times more likely to financially outperform their less collaborative-minded competitors. Construction project management factors immensely into how well a job will be finished, with the ability to identify and balance a project's scope, as well as manage involved stakeholders and source an effective team, noted by PMI as traits found in successful performers.
Construction Digital reported on the United Kingdom's own troubles with collaboration, and attributed the failure of 15 percent of its construction project partially to miscommunication. The source also noted that nearly a third of the country's building endeavors fall short of their goals, for similar reasons to the failures.
"Program and project management is important because we have to get this investment right for our passengers, stakeholders and airlines as well," said Julian Foster, program director of Heathrow, to Construction Digital.
The source noted that a key component to communication is providing the right information to people, rather than simply telling managers and workers what to do. PMI offered similar advice, and added that decision-makers should customize messages to the specific party they are intended for. Additionally, implementing project management best practices and standard policies can also facilitate a smoother operation.
Managing multiple elements
With multiple contractors typically working on larger projects, and the high volume of activity that must be performed in a relatively short span of time, the ability to quickly and clearly communicate what work must be done, as well as when and how, enables firms to avoid project delays or potentially costly mistakes. More than just the profit derived from a swiftly finished job, project owners and executives should also be aware that clear, formalized collaborative efforts may reduce worksite safety issues. The machinery and materials on a construction site often make them hazardous environments, but properly managed workflow can reduce the likelihood that someone will be where they shouldn't be, and help companies avoid the attendant risks. This can possibly aid construction compliance by creating a safer job site.
Lastly, construction management software can greatly improve communication efforts. By using a formalized system that reaches across all areas on a site, decision-makers can be sure that standard collaborative planning is in place and that it is accessible to all involved parties. Enterprise resource planning is key to most large industries, and construction is no different.
The construction industry is one of the most dangerous segments to work within in the United States' job market. The total fatalities it suffers each year has caused OSHA to dub some of the most common causes of death as the "fatal four" of safety hazards. Falls, electrocution, being struck by an object and being caught inside or between objects caused 56 percent of construction worker deaths in 2011, according to the organization. The number of these events decreased by 22 percent between 2001 and 2011, but the amount of incidents still outnumbers any other one industry.
This means that construction firms need to take even more care with their safety standards than other markets. While standard equipment helps, recent innovations in technology can also affect work crew safety. Below are four ways in which firms can reduce the risk of injury or worse on the job site.
Implementing safety measures can be seen by some contractors as a necessary expense rather than a profit-generating investment. If construction firms could avoid purchasing hard hats, bright vests and other protective measures, they could arguably reduce their operating costs. Employees who suffer injuries and are forced to miss work offers some proof that the lack of safety regulations would not actually be profitable, but not all protective measures provide such a clear financial benefit.
Building information modeling (BIM), by contrast, is a fairly obvious cost-saving initiative that contractors can employ. As a tool for reducing expenses, BIM can find architectural conflicts among elements such as buildings' structure, wiring and piping. By identifying these issues before work begins, construction companies can avoid building two clashing systems that then need to be taken apart, redesigned and rebuilt.
But discovering hazardous environments ahead of time also greatly improves worksite safety. A McGraw Hill study found many firms are reporting that BIM positively impacted their safety practices. The same study revealed that 51 percent of firms stated that safety programs improved their ROI, while only 5 percent stated that such initiatives negatively affected their investment.
One related technology that contractors may want to keep their eyes on is augmented reality. While it has yet to be fully realized for the industry, it may provide builders with the ability to inspect a building before its physically constructed. Purpose-built devices similar to Google Glass may also allow wearers to explore the environment of virtual structures.
This may come as a surprise, but smartphones and tablets contribute to a safer worksite. The McGraw Hill study found that more than 75 percent of respondents believed smartphones and tablets positively impact safety. The FieldLens blog detailed a few reasons about how the technology helps. Real-time communication is listed as one of the main benefits, as it enables steady workflow. Additionally, the ability to take photos or record video on-site grants workers better reporting tools for safety issues, which allows them to share an issue before it becomes a problem. By employing mobile devices, companies can also share safety audits in real-time through cloud-based services.
These devices also condense the number of tools a worker must carry, as smartphones usually include flashlights, a calculator and various measurement conversion programs that may be needed on the job.
Project management software
When a project is running late, workers can cut corners and their supervisors can push them to build longer and harder than they should. They perform their job faster than is safe or don't take as much time to ensure quality control. In addition to the risks this can cause on the job site, this can also create issues in the future. A poorly constructed building that starts falling apart or outright collapses is a massive liability for a firm. These problems can be alleviated through construction project management software that helps ensure all work is proceeding on schedule. Collaborative communication tools can also assist in this process.
By keeping everyone on task, construction companies reduce the chance that their employees will engage in risky worksite behavior. Construction project management software can improve communication and workflow by providing clear goals and channels for collaboration.
Subcontractor relationship management tools
Knowing who the subcontractors are by accessing their work history and performance rating can prevent risk-prone builders from ever reaching the job site. Similarly, having access to insurance data and other information about workers or firms brought in for a project can minimize liability risks.
Keeping problematic workers off of a project can spare a firm a number of problems ranging from a lack of productivity to an overall safer crew to a variety of construction compliance issues. Just as contractors should take care with how work is managed on-site, they should also take precautions with managing the company off-site.
Although large construction companies are often well placed to afford the latest industry innovations, they are not always in a position to take advantage of them. The bigger an organization is, the greater the inertia there is to make it continue operating in the same way it has in the past. Completely revising the methods by which general contractors and executives manage their business can be time-consuming, costly and difficult to accomplish throughout every department.
That it is disruptive should not be disputed. Very few changes can be seamlessly integrated into a business. The implementation of new technology can also take years as robust ERP tools are instituted across all levels of a firm. The cost factor associated with change may be overstated, though, particularly for firms that are running parts of their company the same way they were decades ago. While hiring consultants, expanding IT and purchasing new construction software may be expensive in the short-term, these additions can eliminate some of the inefficiency associated with out-of-date operational procedures.
What once worked won't always work
The idea that something that isn't broken shouldn't be fixed is fine in some ways, but it can lead to contractors using strategies and equipment that have long since faded into obsolescence. No major organization completely lacks computers or other digital hardware, yet that equipment once replaced a pen and paper methodology that worked for decades and, arguably, centuries.
That said, some construction firms still rely on paper for sensitive data. Carbon copies still linger in some segments of the industry. Some of this may be avoidable. After all, contractors work with a variety of clients and projects, some of whom will have little desire to use more up-to-date technology or have difficulty integrating it into their operation. However, any firm relying on hard copies for its internal record keeping is missing out on a number of advances and benefits available from software for capital project management, construction accounting and the overall handling of a large organization. Signing a form in triplicate may have been helpful at avoiding errors and providing the same information to multiple people years ago, but digital record keeping combined with readily portable technology has rendered this process archaic.
Mailing paper forms to a data entry center may have been cutting edge years ago, but now it is just an extra, unnecessary step between a firm's work and bookkeeping. Modern technology allows construction companies to organize and analyze their information, from their change orders to job costing and more, without the need for an outside entity. Furthermore, avoiding the use of paper and third-party data centers can eliminate weeks' worth of waiting for feedback or organized records. Software for the various levels of a business's needs can manage most if not all the tasks that an another agency might handle, and in addition to the time savings, companies will also likely benefit from greater cost efficiency by using an application for its finances and project management.
It's also worth noting that relying on Excel and Word for accounting and bookkeeping is not an optimal solution. Neither was designed for the construction industry and they are only a few steps up from pen and paper record keeping. Companies investing in expensive ERP solutions should make the effort to find industry-appropriate software rather than using basic, generic options.
The modular approach
Of course, a firm may not want to completely reorganize its entire operation all at once, but instead change it piece by piece. This is understandable, since work can still progress throughout multiple aspects of the business, rather than a company practically needing to shut down as everything is upgraded. Executives in this position should seek out modular construction accounting software that can be improved over time. This can be difficult, since many licensed ERP solutions lack functionality across multiple, semi-related processes, but construction software that enables a more gradual, but cohesive, upgrade can minimize these problems.
Contractors should be wary when they run across the term "integrated," though. Construction Business Owner noted that there is a distinction between integrated construction software and construction software that integrates. The source highlighted the fact that integrated construction software permits data to work across all of its components, such as job costing and billing. This allows for better internal communication between most or all aspects of a construction company.
By contrast, Construction Business Owner explained that construction software that integrates solves specific problems and can work with other applications, but it has little functionality overlap. This allows it to share information to unrelated programs with minimal difficulty. This grants it greater external utility, due to the nature of working with multiple clients and partners. Contractors should keep both terms in mind while researching which solution may work best for their firm.
One of the primary issues that afflicts larger companies is their ability to adapt to change. Startups are generally well-suited to taking advantage of new technology, or creating it. By contrast, more established businesses often have an incentive not to push for innovation. Kodak invented the digital camera in 1975, yet it failed to capitalize on the technology. Too much of the company was invested in developing film, which the devices lacked. Although the company revolutionized photography, its everyday business practices left it mired in a now-nonexistent business model. This led to it declaring bankruptcy in 2012.
The same risk looms for the construction industry. 3D printing is one of the likeliest culprits to change the market, as it places the tools for manufacturing into the hands of consumers. The only challenges preventing the process from working in construction right now are that it needs to scale up to building homes and it also needs to be able to build sturdier material.
However, the changes that might most seriously affect the industry may not be physical, but instead of a more abstract nature. Partially this is a matter of regulation and market trends. For example, recent guidelines for government projects often require or incentivize some level of green technology or resources. The issue is not simply one of knowing and integrating the regulations and changes into a firm's operations, but also understanding how to implement those rules effectively - a firm that neglects to remain aware of the latest green standards may find itself at a disadvantage in the bid and procurement process for a large-scale city proposal.
In some ways, large firms are well-suited to dealing with these changes. A smaller company that is more specialized in building single-family homes may find its skills going to waste as more people move to cities and demand apartments. These companies also may lack the budget to invest in the software or equipment necessary to deal with a changing market. While this may leave more sizable construction companies better positioned to handle minor building proposals, that does little good when those firms are competing against other major organizations on substantial capital projects.
Flexibility means more than the latest technology
Remaining relevant in a field of changing technology and trends requires more than simply purchasing the latest innovations, though. For every Google or Facebook, there is an Ask Jeeves, MySpace or one of many other forgettable companies. General contractors have to have an adaptable business plan in addition to a willingness to invest in new tools. Relying on new assets alone increases the chance of a firm purchasing soon-to-be obsolete equipment. Adapting to change can be as much about finance management as it is about using new software or hardware.
This is especially apparent from the past few years - those companies that thrived were, in part, those that could work on the tightest budgets possible. Adaptability meant thoughtful construction accounting to manage a reduced number of building projects, smaller budgets and less willingness for banks to extend loans.
To a degree, the economy will always be a contractor's main concern. A lean economy requires an extra degree of competitiveness. A more robust one can cause companies to feel more comfortable in their situation - and lose their edge in the process.
The whole picture
Many of these demands are simple enough to manage individually, but handling evolving technology, new regulations and an uncertain economy all at once can prove difficult for even the best manager, particularly when the daily workload is factored in.
The answer to these problems may be an organizational one. Adapting to change first requires leaders to know that it is happening, and robust construction management software can help by granting an overview of most of a firm's operations. The difficulty in tracking a firm's financials, its lease agreements and its client missives can be greatly reduced by moving from paper filing to electronic content management, which in turn provides a more holistic, proactive stance on information. Being able to adjust to unexpected changes, such as an increase in lumber costs, often comes down to information and foresight. Small shifts in trends can be hard to track when information exists in isolation. While handling multiple data points is more complex than dealing with a few simple tasks, it has long been a requirement for anyone heading up major building projects.
Large firms may not be as flexible as startups, but when they are well managed, they possess the resources to leverage new technology to their advantage and to shift their business strategy based on changing trends. The trick to staying relevant in a changing industry is regularly not buying the latest toys - it is often adept management.
Cities grow. Population increases, construction expands and services that once met the needs of a burgeoning metropolis turn obsolete with time's passing. Highways expand to greet new drivers and buildings stretch ever upward to house more tenants.
Yet when a system fails, it often isn't easy to replace. The density of buildings, wires and pipes create a difficult environment in which to knock down walls and dig up earth to renovate or rebuild. As Constructech recently reported, such is the case in London. Since the construction of the city's sewer system in the Victorian era, one pipe directed all the sewage and stormwater into the Thames. For more than a hundred years, this sufficed for millions of residents.
Now, however, the Thames pipe needs assistance with the runoff. In years past, this endeavor would have been highly disruptive and expensive. Installing six-meter wide piping 60 meters deep into the ground of a densely populated area is difficult. Numerous utilities running through the surrounding earth add to the project's obstacles.
Avoiding problems in the planning stage
While the Thames Tideway Tunnel project will still be disruptive and expensive, modern construction technology should minimize harm to the utilities. Increasingly popular building information modeling (BIM) software will be used during renovation, which should help the general contractors plan around underground utilities. Geographic information systems (GIS) will also analyze the environment and relevant structures to help builders avoid problems relating to either.
Without this technology, analysts estimate the project would cost ten times the $6.1 billion already budgeted for it. Construction software like BIM can help streamline the building process. Expensive projects such as the Thames Tideway Tunnel can benefit immensely from new technological advancements.
Project management, regardless of whether the work is great or small, requires planning. Even a simple shack requires the building to be drawn up, a list of build materials noted and preferably a construction schedule implemented, even if it is for a private endeavor. Larger projects require a much more elaborate strategy, with elements ranging from staffing pay to zoning board approvals. Substantial construction work can take years to finish and a similar amount of time before the first brick is ever laid.
Yet for all the planning involved in a job, it rarely if ever proves completely satisfactory. The city may request a curb cut to discourage drivers from taking left turns out of a lot. A supplier may show up late with materials, necessitating rescheduling part of the work. A thousand tiny details can diverge from a project's initial conception. When these disruptions happen, the more swiftly a company can adjust to the change, the more it will save and the better it will perform.
However, a firm must first be aware of the change. A worker who calls in sick the day before can be accounted for, whereas one who calls in when his or her shift would start has already caused a delay. Planning requires forewarning, which is not always possible.
A few tools for greater speed and efficiency
In a move that could aid with certain aspects of the construction industry, though, Constructech recently reported that Rand McNally has released a new GPS device to help trucks avoid traffic and delays using real-time and predictive analytics. While GPS devices are hardly unheard of in the industry, new software is improving the efficiency of past technologies. Real-time functionality also allows shipments to reroute around an unplanned-for obstacle. Additionally, even standard technology experiences frequent revisions.
Another answer for overcoming unplanned for challenges is to speed up the building process. This is not always advised, as a rush job can lead to problems both during and after the construction process. However, Builder recently reported that California-based RSI is using manufacturing to quickly finish homes. The company operates a factory that produces external home components designed for the easy installation of plumbing, wiring, cabinets and other elements.
Of course, not all contractors are in a position to open a new factory for their building projects. This is true for many small to medium-sized businesses that lack the capital for such an investment, and it is also true for larger firms that deal in many unique building projects such as building subways or skyscrapers. The basic conceit of more expedient construction that is flexible enough to adjust to a sudden change remains important to firms of any size. Moving to electronic content management is one way to achieve this, and without investing in new equipment that may be obsolete within a few years. After all, software tends to be easier to update than hardware.
The more options there are available to a firm, the harder it becomes to make a decision. It is often easier to stick with traditional, well-known technology instead of adopting new practices. This is particularly true if contractors perceive recent innovations as difficult to understand. Construction software intended to streamline project management does little good if it has a steep learning curve to master. The adoption of tablets and smartphones in the industry can be partially attributed to their original consumer-oriented purpose, as they are part of everyday life in a way that new construction-specific tools rarely are.
One tool that many construction companies aren't fully utilizing is telematics. Equipment World recently reported on the technology, highlighting the fact that many companies include telematics as a standard part of their equipment. Telematics covers both the analysis and remote control of the technology it's included with. Certain aspects of it are widely used, like global positioning systems. Telematic systems that don't require contractors to actively monitor and decipher the data are also seeing widespread use, such as John Deere's Service Advisor remote. Deere dealers, rather than the company operating their equipment, can remotely diagnose and repair a problem using telematics.
Telematic usage drops when companies must monitor it on their own
However, when it comes to construction companies overseeing their telematic information, Equipment World reported last year that only 10 to 15 percent of heavy equipment contractors utilize the technology. This is despite the fact that the data telematics offers can reduce a company's running costs and make the most of its hardware. Although the cost of accessing this data acts as a barrier for some companies, many manufacturers offer it free for various lengths of time. As little as a year's free service can let contractors know what the information is worth to their company and whether to continue using it.
"We think machine communication and connection is a huge change event for the industry, a complete game changer," John Deere Director of Sales Kevin Karlix recently said at a press event.
Step by step
With the number of construction projects on the rise, now may be the time for contractors to invest in improved technology and business practices. Rather than transitioning from a lack of telematics to full fleet implementation, though, project managers can gradually add it to their standard operating procedures. They can study fuel consumption, or other major data points such as a piece of equipment's idle time or run time. As contractors familiarize themselves with the process, they can delve further into the analysis. In doing so, they can gain an advantage up to 90 percent of their competitors potentially lack.
From 2008 until 2013, the construction industry suffered one of the worst unemployment rates of any sector. Sources such as the Associated General Contractors of America noted that the number of out-of-work construction workers was occasionally double the national average. More than a quarter of these professionals were unemployed at various points in recent memory.
In some ways, construction is one of the industries most dependent on factors outside of its control. Winter in northern climes can halt numerous building projects. Government spending on capital works might change from administration to administration, or regulations might change the way general contractors have to run their operations. Trends in the housing market are often dependent on consumers, and a surge in projects one year can be followed by a sudden decrease when the inventory of homes exceeds demand.
All of this amounts to one stark necessity: Construction companies need to futureproof themselves against change. Those organizations that can adjust to the needs of the marketplace will be firmly positioned to take advantage of it during times of prosperity, and well placed to endure an economic downturn. Firms cannot always control demand for their services, but they can control how flexible they will be in the face of change.
Construction means much more than I-beams and cranes now. Building information modeling (BIM) is standard among many organizations, but hardly universal. Meanwhile, consumer-focused devices such as tablets and smartphones are increasingly being used by the commercial sector.
The advent of 3D printing also has the chance of drastically changing the industry, from the equipment that general contractors use to the skill set that will be required in a firm's employees. If a company can finish a building in a shorter amount of time, with a greater profit margin and higher safety standards, it will swiftly out-bid and out-compete other similarly-sized enterprises... and possibly a few larger ones, too.
This does not mean contractors should implement every new innovation into their business. But they should remain aware of the changes occurring in the industry.
Construction is, at its heart, about collaboration. Developers work with architects, who in turn hire a construction firm to build their ideas. The firm hires on subcontractors for additional work and gradually ideas become a reality. Along the way, zoning boards, lawyers and often residents near the project also offer their input.
Simply, the easier a firm is to work with, the more likely it becomes that all those entities will continue to work with that firm. Increasingly, this means using construction software that is compatible with multiple systems. Applications using XML are particularly well suited to this task, as the computer language provides widespread utility and conversion ability to maximize collaborative efforts. The ability to seamlessly transfer files from the architect to the general contractor to subcontractors to developers and suppliers and back again can speed up the approval and building process, while providing a level of convenience that all involved parties will appreciate. Simultaneously creating an invoice that automatically sends out a payment request reduces the amount of work involved in the accounting process while minimizing the chance for error. Linking accounting with project management can provide a substantial boost to productivity by eliminating redundant processes.
Software that works more readily with other systems will also have an easier time adjusting to change. Data locked within software with little inter-functionality can force firms to go through a lengthy, costly upgrade process simply to add tablets or other relatively new equipment to their operational environments.
Change is inevitable. Long-term projects eventually end and trends in architecture and customer demand shift from generation to generation. The demands of building a subway system differ from constructing a bridge. Versatile companies will succeed while more staid organizations with a niche may find their specialty disappear. Following the economic downturn, many families turned away from single-family homes in favor of multifamily housing. Shovel-ready stimulus projects briefly helped the industry, but sequestration may depress large-scale government projects even as the consumer market improves.
Staying aware of what the future may bring does little good if a construction firm cannot take advantage of it. Interoperability plays partially into customization, but it also means implementing business processes that facilitate change. The strategies that helped companies weather an economic downturn - conservative efficiency, often enough - may prevent them from seizing opportunities during a sudden uptick.
Current trends, regardless of the industry, favor some form of customization. People want to use their tablets or smartphones in the workplace. They want to use their devices on their terms. Contractors should be willing to facilitate this kind of behavior, but also to take advantage of it themselves. Software that conforms to the user and the project, rather than the other way around, can accomplish this. Versatile tools offer a level of reliability that the future often lacks.