“What’s the ROI?”
If you’ve ever had to push through new construction technology for approval, you’ve likely heard this question dozens of times. With more and more products hitting the market every day, and technology’s role becoming increasingly crucial in the industry, measuring ROI from construction technology is critical in today’s building environment. Moreover, as tools to measure key performance indicators proliferate, processes on construction projects are coming under increased scrutiny when it comes to everything from safety to efficiency.
“We’re questioned about the way we have to do business these days on site,” says David Francis, CTO at Innovative Construction Technology (ICT). “We have new safety regulations and processes. ROI is even more important there. The worst part is, companies are making money, but they’re leaving money on the table because they’re not being efficient.”
Later this year, David will share his expertise at this year’s Autodesk University, our annual event covering current trends and the future of the architecture, engineering, and construction industry. His session, The ROI of Technology in Construction, will be among hundreds of learning opportunities from November 17-20. Register today. Autodesk 2020 will be a free, virtual experience open to all who register, running from November 17-20.
The ROI of Technology in Construction
One of the biggest challenges contractors face is understanding the value of certain technology, as well as running the cost-benefit analysis. Technology is not always a tangible item like a physical tool, so it can be difficult to convince people in management of its benefits.
David’s presentation aims to cover all facets of technology costs and help you understand how to identify and push through new technology within your organization. We caught up with David ahead of his session at AU. Here are three major things we learned from our conversation, and what you can expect a deeper dive on in November.
1. You Need to Understand the Complete Cost of Construction Technology
Over his career, David’s unique experience in the construction industry has helped him become a technology expert. He started out in the mid-1980s as a pipefitter and had experience early on with some of the most innovative technology of the day.
“Our company went out and bought CAD computers, so we were ahead of the curve,” David says. “I was doing CAD back in 1985. When I was still a fifth-year apprentice, I was hired by ACCO, a large mechanical contractor, to be the lead detailer out of the Getty Center because I knew CAD, I had detailing experience and the project required the coordination to be drawn in CAD. So we trained our hand detailers to learn CAD software and moved forward from there.”
David worked his way into many different roles at multiple large mechanical contractors to gain more experience and implemented technology where it made sense and improved efficiency and profit. Technology use in construction has been a constant throughout his career.
“In my last role, I was a liaison between engineering, detailing, and the shops. That’s where my technology side came into play, and I was able to leverage it where it made sense.”
David says that while contractors don’t have to spend a lot on technology, if you’re going to commit to tech, you need to be sure it will pay off. Unlike with physical tools, which can demonstrate their value instantly, with technology, only a few people may even know what the intended use is and if it’s working.
“Over my career, I also became more of a mentor and tried to help people out when it came to technology. My current role came when a friend of mine approached me to enter the world of development,” David says.
Along with his ICT team, David developed a technology product called ICT Tracker that does field installation tracking. ICT Tracker allows people to leverage their 3D model data to track field installation and generate instant productivity reports.
When it comes to measuring the true cost of different construction technology, David says upfront numbers have meaning — but there are usually way more costs than meets the eye initially.
“Everybody thinks that software is expensive,” David says.
“Software is usually the least of your costs. It’s training, and it’s changing your operations and workflows that add up. So, you’re buying a piece of technology that might cost X amount of dollars, but now you have to train X amount of people to make sure it is being used and implemented right. Also, training isn’t always a one-time thing. Software continually evolves and changes — you need to train your people to keep up with the changes regularly.”
Accounting for additional costs like training is critical to understanding the full cost of technology.
“A lot of people don’t budget for training or understand exactly how to budget for it,” David says. “Let’s talk about your labor. Do you understand your true labor costs? Not your cost per hour, but what they really cost the company? You might have your staff attend 24 to 40 hours of training. That’s costing you both for the training and the lost time that people are off of their jobs and the lost productivity coming up to speed with the new process.”
Additionally, hardware, tax incentives, and customization are essential considerations when conducting your cost-benefit analysis.
“There is the question of how you set up hardware,” David says. “Are you going to lease it? Are you going to rent it? Are you going to buy to own? Is it something you can rent back to a jobsite? Rent to a project? Technology comes in a lot of forms that can determine your payback on it. There’s also tax incentives for buying certain technology, as well as customization. Every company is unique — you won’t find much out there that’s completely ready to go out of the box.”
2. Figure out the Real Value of Technology
Once you figure out the true cost of technology, it’s time to identify its actual value, that way you can complete a cost-benefit analysis that will help you fast track management approval for implementation. Sometimes you can identify the benefits of technology by looking at your company’s shortcomings, including an unwillingness to adopt new solutions.
“It’s just amazing, the waste that you see companies go through because they’re not willing to make changes and not acknowledge the value of the technology they’re buying,” David says. “You’re trying to control your labor and make people more efficient. If people are more efficient and there’s something that makes their jobs easier, they’re happier working.”
He continues, “How many people have sat in a meeting where you had ten people in a meeting, and you spend the first 15 minutes fooling around just trying to get the projector working because it’s not standardized…Well, you can burn a thousand bucks of working hours pretty quickly after a few meetings. You have to take a look around your company everywhere and identify where you’re wasting time and money on simple technology items. These are the areas of value where technology can pay for itself quickly.”
3. ROI is a People Process
At the end of the day, ROI is not just a technology process; it’s a people one. David stresses how critical people are to pushing technology’s success, especially your internal champions.
“You need a game plan and to put someone in charge to champion technology on your side and ensure it’s implemented correctly.”
“Some people just don’t like change,” David says, adding that there is “never really a right time to implement new technology” and that “management buy-in is the most important part of this process.”
“When the company is making profit, no one wants to change because they think everything is alright,” David says. “But meanwhile, they’re leaving money on the table because of this mentality… and on the other side, when you’re not making money, you don’t have money to invest in technology. Everything’s tightened down.” The bottom line is, management has to be bought to the change and impact. Your CEO has to understand that we’re spending money on this technology and there’s value to it. You’re always going to have these certain people that don’t want to use it, and you’re just not going to change their minds. But the world continually changes, and they need to be able to roll with it.”
Don’t Miss Out! Register for Autodesk University 2020
You can catch David’s talk, The ROI of Technology in Construction, as well as hundreds of innovative sessions on reimagining what’s possible for architecture, engineering, and construction at Autodesk University 2020. Be sure to register now to join in the action next month.
Looking to learn more about classes at AU 2020? Take a look at our Autodesk University blogs.