9 Ways Construction Companies are Leading Digital Transformation

Introduction

An interesting paradox exists between architecture/industrial design companies and their counterparts in the construction industry.

The architecture and industrial design industries are both highly digitized. On the other hand, companies in the construction industry — where all the trenchwork occurs, both figuratively and
literally — are lagging in the digital transformation of their organizations.

All of this was cited in a recent McKinsey Global Institute report which names construction as
one of the least digitized industries: “Industries that are both highly labour-intensive and localized, such as construction, tend to rank lower in usage [of digital capabilities], notably in the way they conduct customer transactions.”

The disconnect between the two complementary industries makes sense if you think about it.
Designers and architects already work extensively with software programs in the normal course of business and so the jump to a company-wide digital transformation initiative is a natural progression. Meanwhile, their construction industry counterparts are found in the real world on jobsites, building remarkable structures and managing projects, materials and laborers.

With that backstory in mind, we created this whitepaper to address how construction companies are catching up to their computer-heavy design partners and using Intelligent Information Management (IIM) systems as one pathway to digital transformation. Specifically, we touch on the nine most powerful ways construction companies are using IIM to drive the digitization of their businesses.

INFORMATION MANAGEMENT IN THE CONSTRUCTION INDUSTRY

As we prefaced, the Construction industry lags their architecture and engineering industry counterparts in adopting a more digital workplace.

With that in mind, many Construction industry constituents are leading the charge toward a more streamlined workplace enabled by digitization of enterprise information and workflows. Transitioning to a more intelligent content infrastructure has taken centre stage but, ultimately, finding success in the
construction industry can be challenging. From sourcing materials to guiding projects on-time and on-budget to back office management, the industry is saddled with its fair share of built-in challenges.

Some of the most common information-related issues facing construction company staffers are:

  • They need to quickly identify the status of a job and be able to review all information needed to
    make good decisions.
  • They want to give Project Managers the best tools to bring the job in on-time and on-budget.
  • They need to simplify business processes yet may be cautious about technology solutions they see as complex.
  • They would like to lessen the use of paper documents and make files easily searchable and findable by all team members.
  • When on location at different job sites, they need the ability to access information and documents.
  • They want well-defined processes to ensure everything gets taken care of on time, documents are not misplaced or unseen, and staff is tracking on the path laid out by executives.
  • They are concerned with regulatory compliance related to job safety, construction standards and other compliance factors.

Many of the above challenges can be mitigated with the use of Intelligent Information Management. In fact, the harsh reality is that the digital workplace is becoming more and more common and the construction industry could find themselves on a ‘no-tech’ island — unless they adapt.

That adaptation to a more digital workplace is going to be a key driver in keeping construction companies more competitive in an already-competitive market.

The McKinsey Report makes a sensible claim: “The race to keep up with technology and put it to the most effective business use is producing digital “haves” and “have-mores” — and the large, persistent gap between them is becoming a decisive factor in competition across the economy.” Thus, the challenge is no longer IF construction companies need digital transformation; the challenge becomes HOW and through WHICH PLATFORMS will construction companies transform their organizations.

9 WAYS CONSTRUCTION COMPANIES ARE LEADING DIGITAL TRANSFORMATION THROUGH INTELLIGENT INFORMATION MANAGEMENT

1. Project Management

Generally, construction projects start in a planning phase and then move on to the construction phase, both of which benefit immensely from an Intelligent Information Management system.
In the planning phase, IIM platforms simplify many commonplace tasks like:

  • Creating and processing contracts
  • Systematizing invoice processing
  • Easy automation of employee and subcontractor workflows — from onboarding to collaboration to managing project tasks and milestones
  • Producing project closeout documents in minutes — not days or weeks

In the construction phase, an IIM platform also enables the process by:

  • Incorporating version control for project documents that are subject to modification
  • Expanding access to information
  • Reduction of project-specific risk and cost of litigation with comprehensive document control

We’ll touch on these in more detail later but suffice it to say, when a construction company chooses to upgrade the way they handle information and documents, managing jobs becomes more efficient, more streamlined and more profitable.

If they’re not mindful, construction companies will find themselves managing jobs with documents scattered across different departments. The cure to this decentralized information is an IIM system that can automatically organize all pertinent information in one place no matter where it lives natively.

2. Project Budgeting and Routing of Invoices

Job Managers and Construction Executives are keenly interested in the financial documentation of complex project budgets and for good reason.

Construction companies often work on thinner profit margins that are always at risk of depleting if budget documentation isn’t properly managed. With an IIM system, all employees have centralised access to critical documents important for ensuring projects remain on-budget:

  • Invoices
  • Credit/debit notes
  • Delivery notes
  • Contracts
  • Building licenses
  • Plumbing licenses
  • Electrical licenses

The routing and approval of invoices is also a persistent challenge in the construction industry and can sometimes take weeks. Many companies have a complex approval process with various employees tasked with cost coding, processing, approval and finalization of payment. Invoice processing can be paper-heavy and time-consuming. It’s all too common for invoices to get held up by Job Managers for inaccuracies, while the Accounts Payable department fields calls from the suppliers wondering why payment hasn’t been rendered.

Sound familiar? With an IIM system, electronic routing and invoice workflows make the process shorter, simpler and more efficient — vastly improving productivity. IIM workflows enable the centralization of invoice processing, allowing receipts to be received, scanned and routed electronically — often in the same day — to the approvers.

For example, approvers can be notified of invoices by an email and can match the invoice to the purchase order and delivery ticket if it has been scanned or brought in from the accounting system. While inspecting invoices, employees can quickly access related documents like liens, lien waivers, contracts, insurance certificates — everything the approver might require in approving the invoice.
Typically, invoice approval processes occur much faster and, more importantly, the approval process works the same every time, ensuring that a recognized procedure is set and followed.

3. Access and Manage Critical Documents – from anywhere

The construction industry conducts operations in several locations simultaneously — with employees, subcontractors and job managers often on job sites in different locations. With Intelligent Information Management platforms, employees and project contributors can access documents related to a job anywhere they might be. If an on-site project manager needs to access a blueprint drawing, for instance, they can pull it up within seconds on their tablet or smartphone. This transforms the way worksites operate and drives efficiency into the job site.

4. Risk Management and Compliance

From building code requirements to zoning orders to job site safety, construction companies need to keep up with an array of compliance measures. Not only that, construction insurance requirements often include domestic building insurance, professional indemnity, public liability and structural defect components. Each subcontractor must provide detailed information about their licensing and insurance.
Needless to say, managing risk and compliance is extremely documentation-centric. IIM platforms can help centralize that documentation in a single repository and provide access to them immediately, when needed.

5. Revision and Version Control

Plans, job specifications, materials documentation and other critical construction documents often need to be modified on the fly.

Construction companies can improve productivity by using an IIM system to eliminate the time it takes to sift through multiple versions of the same file and compare changes.
Version control features of IIM platforms ensure that employees always have access to the latest version of a document. It’s easy to see what has changed, who did it and when the change was made.

6. Reducing Paper Flow

The construction industry has typically been a sector that relies heavily on paper documents.
That’s a problem. At any given time, documents can be lost or misfiled. Worse though is the fact that running a business with paper files results in unnecessary costs. The Gartner Group says it costs $7.50 every time a piece of paper is touched.

A good IIM system will reduce the need for paper documents, especially if it features document scanning and optical character recognition (OCR).

Companies can improve decision-making by turning scanned image content into searchable and actionable information. The best part? Once documents are digitized, they are accessible and manageable by everyone, everywhere with a few clicks.

7. Reduce Data Loss

Within a business organization, departments tend to develop their own approaches and methodologies to processing data and storing it for their needs — often in different systems where valuable information is only visible and accessible to those few department members.

IIM systems can provide a central repository for documents and files, even if they are spread across disparate silos — like network folders, SharePoint, OpenText, and IBM FileNet as well as with other business systems like Salesforce, Microsoft Dynamics 365, and SAP. In fact, many platforms, like M-Files, can integrate with construction-specific software tools, including AutoCAD programs and Revit.

8. Intelligent Metadata Capture

With a metadata-driven approach, as is used by M-Files, documents that are stored into the repository along with key information on what they are rather than where in the file folder taxonomy they are. The system can then index and organize documents, ensuring that they appear in all relevant views and search result listings, so the problem of one unique document existing in multiple locations is efficiently solved. Metadata-driven IIM systems operate on the idea that it is easier and more precise to describe what something is than to guess where it is stored.

One area where IIM has evolved in recent years is in the ability to leverage artificial intelligence (AI) for a more intelligent capture of data and this capability proves extremely useful for the construction industry, where documents are often self-similar and need to be organized in a specific way. With AI technology, when a document is stored, natural language processing engines can analyse the documents and make more accurate suggestions on how it should be classified.

9. Backoffice Administration

Other applications of an efficient IIM system for construction company back offices include:

  • Human resources
  • Equipment managers
  • Office administration
  • Vendor managers
  • Supplier managers

As we mentioned, a robust IIM platform removes data silos and increases information flow and it does so across divisions. Since HR, accounts payable and site managers are all accessing the same system, you proactively solve issues without extensive email exchanges.

A FEW OF THE WAYS INTELLIGENT INFORMATION MANAGEMENT BENEFITS CONSTRUCTION COMPANIES

  • Reducing paper flow and dependence on paper
  • Centralizing operations when practical for better control.
  • Document organization and management.
  • Reducing time for approval of invoices.
  • Allowing project managers and others instant access to job documents.
  • Enabling anywhere, anytime document viewing with the proper security.
  • Increasing profitability through workflow efficiencies.
  • Establishing consistent procedures.
  • Promoting compliance.
  • Providing a long-term reduction in costs.
  • Providing document backup off-site.

FINAL THOUGHTS

The construction industry is an extremely competitive sector where the stakes are high and operational efficiencies mean bigger profits. The construction industry is a multi-billion-dollar sector.

Improvements in workflow establish a distinct competitive advantage for companies that adapt to the digital landscape and adopt digital transformation as an objective. The process of modernising their business operations with digital transformation makes construction companies more efficient and more profitable.

For more information on how we can help your organisation please email: peter@documentmanagementsoftware.com.au or visit www.documentmanagementsoftware.com.au


Peter Ellyard