Bridging the Information Gap: Build a Better Data Strategy in the Construction Industry

As the world becomes increasingly data-driven, organizations across all industries must adapt and adopt better data practices to remain competitive. However, the construction industry is notoriously slow to adopt new technology.

A 2023 RICS global survey reveals a discrepancy between the perceived benefits of digitalization within the construction industry and the actual rate of technology adoption.

Benefits of a Robust Data Strategy in Construction

The same survey found that the most common barriers to the digitalization of design and construction practices are “cost, effort, and changes needed.” And while there is a cost to storing data, the opportunity costs are much greater. According to IBM, bad or incomplete data costs U.S. businesses up to $3.1 trillion a year. At any individual company, an ineffective or non-existent data practice can result in lost sales opportunities, inaccurate forecasts, wasted time, and a reduction in productivity. Conversely, implementing a strategic data practice leveraging advanced technology solutions can help streamline financial processes, improve efficiency, and enhance data accuracy.

Cost Tracking and Reduction

A sound data strategy equips construction companies with a more complete picture of their business, including dashboards and financial snapshots. Utilizing this data can help companies better track project costs, identify areas to reduce costs, and make more accurate predictions about profitability.

Resource Allocation and Efficiency

Analyzing historical project data allows construction companies to allocate resources more effectively and avoid budget overruns, leading to more accurate bidding. In turn, this can lead to your company winning more projects.

Improved Accuracy and Decision-Making

A robust data strategy ensures that information is accurate, up-to-date, and accessible, allowing for better decision-making at all levels. Incorporating automation also reduces organizations’ dependence on paper-based processes, which are more prone to human error.

Risk Mitigation

Analyzing historical data can help you anticipate challenges and implement proactive measures to mitigate risks early in the project lifecycle. Real-time data insights allow for timely adjustments and course corrections, leading to more efficient operations.

How to Improve Your Data to Increase Company Performance

As an organizational leader, the steps you must take to build a comprehensive data practice include:

1. Understanding what data you have and what it represents.

Before you can effectively use data to improve your construction business, you need to know what you are looking at. This includes identifying different types of data you collect, such as project information, resource utilization, and financial data. Once you understand your data, you can begin to identify the key metrics and indicators that will be most important to your business.

2. Centralizing your data for a single source of truth.

One of the biggest challenges in the construction industry is the lack of centralized, accurate data. To overcome this, consider investing in robust data collection and management systems. These systems should be able to handle a wide variety of data types, from project plans and resource utilization to financial data and customer feedback. This will help ensure that data is accurate and up to date, which is essential for making informed decisions.

3. Using visualization tools to make data more accessible.

Your employees are often busy on the job site and may not have the time to sift through large amounts of data. To make data more accessible, consider investing in data visualization tools that allow them to quickly and easily view key metrics and indicators. These tools should be intuitive and easy to use so that even non-technical employees can understand and use them.

4. Investing in data analytics and modeling.

Once you have acquired and organized a robust data collection, you can begin to use data analytics and modeling to improve your business. This includes using data to optimize project schedules, identify inefficiencies, and improve resource utilization. These tools can also be used to predict future trends and make more informed decisions.

5. Automating data solutions to improve operations.

As your company grows, it will inevitably create technical debt — older, legacy systems that don’t make sense to replace, yet still need to interact with the new, cloud-based tools you implement.

One solution for this technical debt is Robotic Process Automation (RPA). RPA can automate repetitive, time-consuming tasks such as data entry, data extraction, and data processing, freeing up human resources to focus on more value-adding activities and reducing the risk of human error. This can help to improve the accuracy, efficiency, and speed of data collection, processing, and analysis.

Consider the invoice approval process in your organization. Starting with a PDF invoice from a subcontractor, RPA can scan the invoice, pull out the needed information, and send the approver a message in Microsoft Teams. The approver is then able to see the invoice details, modify them if necessary, save the invoice in SharePoint, and then approve or reject the invoice. Once the invoice is approved, the automation launches the invoicing application, uploads the data, and saves the record. When finished, it closes the application and sends an alert that the invoice was created. The invoice is added to an Excel spreadsheet that logs every transaction.

6. Creating a data-driven culture.

To truly reap the benefits of improved data practices, you must create a data-driven culture in your organization. This means that data should be integrated into all aspects of the business, from project planning and execution to decision-making and resource allocation. By creating a data-driven culture, you will be able to empower employees to make better decisions and drive business success.

Common Challenges for Construction Companies

Data and reporting projects can add significant value to your organization’s executive team and bottom line, but they do not come without challenges. Top challenges for construction companies are:

• Change Management: Change starts at the top with executive leadership buy-in. Starting initiatives without a plan in place can lead to poor user adoption.
• Talent Shortages: A limited IT staff can cause strain when undergoing new initiatives.
• Training: To successfully become a data-driven company, users must have access to resources.
• Security: Maintaining compliance with data protection regulations and ensuring data security is a vital part of every data strategy.
• Communication Between Operational Divisions: Construction companies have a variety of cost and revenue centers moving quickly. Information silos often emerge, creating duplicated and misaligned data that hamper success.

These challenges can be overcome by enlisting the help of a data solution provider. A data advisor that provides IT outsourcing and staff augmentation can help foster a data-driven mindset in employees, alleviate the burden of talent shortages, provide user training, and ensure data security protocols are in place.

Get Started One Step at a Time

The rate of technological advancement will only continue to increase, and businesses that are unable to adapt to the ever-changing business landscape will face consequences as time goes on. By understanding your data, implementing robust data collection and management systems, using data visualization tools, investing in data analytics and modeling, and creating a data-driven culture, you can improve your organization’s operations and make better decisions, ultimately driving business success. And you don’t have to do it alone; Eide Bailly’s team of data professionals can leverage the industry’s leading tools and a proven methodology to help you make the most of your data with the least cost to your organization.