2020 is almost here–and as construction professionals, we are sure that you have a lot to celebrate. Whether it’s winning new business or the topping out of a career-defining project, everyone in the industry has a milestone from the year (and decade) they should wear as a badge of honor.
As part of the fresh start of each year, it’s also important to commit to new goals. For construction businesses, the right targets are critical to organization, productivity, and improving a company’s bottom line. And perhaps among the most important goals for today’s leading companies are ones involving a digital construction strategy.
According to Liferay, “Digital strategy focuses on using technology to improve business performance,” and includes implementing new products or reimagining current processes. The blog continues, “As digital technology becomes more pervasive and companies move further in the journey of digital transformation, digital strategy and business strategy will be the same thing.”
The message is loud and clear. Digital strategy can no longer be a subset of the broader business vision–it needs to remain in the front and center of every major company initiative.
For construction, the benefits of implementing a winning digital strategy are clear. McKinsey reports that digital transformation in construction could result in cost reductions of 4-6% and productivity gains of 14-15%. That being said, according to EY Global, only 25% of engineering and construction companies report having a clear digital strategy in place. Additionally, less than 10% are confident in how far along they are on the digital readiness spectrum.
The good news is: this leaves many companies with significant opportunities to grow. However, when it comes to creating technology goals and strategies, many companies are at a loss on where to begin. Other firms might be focusing their limited time and resources on areas that have a narrow and siloed impact on more significant project activities and outcomes.
In truth, there is no one-fit-all approach when it comes to creating a digital construction strategy. The right plan depends on individual business needs and targets. Nonetheless, with guidance and the right framework, companies can begin to create their own digital goals and strategy to meet business objectives in 2020 and beyond.
Before you begin creating your digital construction strategy for 2020, it’s vital to understand where your company currently stands. Luckily, there’s an easy way to check with a new free tool: the Construction Health Check.
The tool includes a 15-minute assessment that helps construction businesses benchmark themselves against other companies when it comes to the key performance indicators (KPIs) that matter most to performance. After four easy steps, you will receive a personalized report that shows how your team stacks up against others in the industry. You’ll also receive ideas on how to improve the way your company collects and analyzes project information. Getting a fast check-up into your construction health has never been easier–start the conversation and take the assessment today:
You’re probably familiar with the concept of par, as it relates to golf. Par is the number of strokes a player is expected to take to get the ball into the hole. The number is on the tee pad and scorecard, so everyone knows what it is, what to expect, and how to play the hole. It makes it easy for competitive players to evaluate performance and, more importantly, improve.
In a competitive setting, stats matter and improvement is the difference between staying afloat or rising above. The same goes for business. Statistical recording and comparable performance data are becoming as essential. KPIs are a common industry standard used to “benchmark” companies.
For the construction industry, KPIs provide valuable insight for both individual firms in addition to the entire industry. For example, manufacturing has consistently become more efficient, faster, and cheaper, year after year. This is because tracking KPIs and optimizing processes to achieve ever better numbers has become the name of the game.
Until recently, there hasn’t been an efficient way to establish any kind of ‘par’ or construction KPIs for activities such as quality or efficiency. But the abundance of construction technology connected to the cloud is now changing that. Digital construction tools are providing the opportunity and the capability to collect information across all stages of project management. Everything, from the specific details of a subcontractor’s performance and the daily cost of general conditions, to the overall efficiency and safety of a given project, are now available at the fingertips of anyone involved in construction project performance.
As this data continues to be aggregated, the industry will be able to establish a meaningful set of construction project benchmarks based on factors that used to be lost in the vagaries of the process. Industry leaders will have clear construction KPIs, not only for safety, but also for cost, quality, and performance.
It's all about using the information your digital construction tools are generating for project management and benchmarking. Information on past projects allows contractors to actually see how they performed, beyond the typical success metrics of margin, safety, and client satisfaction. This helps contractors answer the question "how and where do we improve?" The companies that embrace this opportunity will not only benefit but blaze a trail forward in the industry.
Once par is established, everything changes. Setting construction KPIs for quality, cost, and schedule will mean that if you can’t meet par, you’ll quickly be out of the game. Of course, it also means that if you can beat par, you’ll have a competitive advantage.
Now that you know where you stand, and why you should be benchmarking, it’s time to start digging into specifics. Just like any business strategy, creating a digital construction one first involves establishing the KPIs that matter most.
The Construction Health Check evaluates companies based on the results of a recent study that Autodesk commissioned with Dodge Data & Analytics. The study surveyed contractors and trade professionals to identify and analyze current processes for planning and executing projects. The results revealed seven key process indicators, which few firms are measuring, yet most construction professionals agree provide an opportunity for concrete benchmarks for construction project performance. These include:
Using the links above, you can navigate to each of our construction digital strategy deep dives. Each part focuses on a new KPI and explores the specific processes that are essential to your business goals. We also provide the leading digital strategies and tools your company can implement in 2020. Just click the links above to learn more and subscribe to our blog for bi-weekly updates!