3 Digital Transformation Challenges Construction Companies Face and How to Overcome Them

BY ANGIE LICATA, COO
RYVIT

Digital transformation has been a key investment for many businesses in the last few years. The pandemic has only accelerated this trend. This upward trajectory can also be seen in the construction industry. A survey by AGC of America and Sage Construction found that close to half of construction businesses planned to increase investment in 2020.

Digital transformation in the construction industry is even more important as companies struggle to reach higher levels of inefficiency with a shrinking workforce. Technology can help fill the gap created by the labor shortage and increase operational efficiency.

Despite being fully aware of its benefits, business leaders find it difficult to implement digital transformation plans. As a result, they can lag behind more innovative and forward-thinking competitors. Here are three of the most common challenges construction companies face when embarking on the digital transformation journey.

COMMON DIGITIZATION CHALLENGES FACED BY CONSTRUCTION COMPANIES
Data management plans are often missing before the start of digital transformation projects
Any good digital transformation plan will result in the collection of some form of data, and construction businesses are no different. The amount of data gathered by corporations alone was estimated to reach 44 zettabytes by the end of 2020. The problem is that while construction companies collect significant data on operations, a significant amount of that data is wasted. This is a direct result of a lack of integration between the various applications used. This can exacerbate the gap between existing data silos.

Good data management practices can help construction businesses break out of silos and facilitate cooperation between various business disciplines. These practices should be implemented before embarking on a digital transformation project to maximize the benefit from the investment.

Optimization across departments is often inconsistent
Construction companies are notoriously slow to adopt new technologies and are often considered to be a massive business opportunity for technology providers due to its untapped potential. As a result, technology providers have developed highly specialized implementations of established technologies to tempt construction businesses to invest. However, businesses that do adopt these technologies often find that while these technologies work great in isolation, they can often create confusion and inconsistencies when working across divisions.

A vast majority of construction projects require cooperation with a variety of departments and divisions, each of which might have its own technology optimized for their specific use case. This disparity can lead to further inefficiencies and reduce enthusiasm for future digital projects. While investing in digital transformation projects, companies must have a holistic view of their business operations and implement technologies consistently across divisions.

Workers can be resistant to learning new skills
Implementing new processes and introducing new technologies in any business can only be successful if the employees are on board with the project. This can be particularly challenging in the construction industry that relies on an aging workforce to a larger extent as compared to other industries. This reluctance, if not managed, could lead to reduced employee morale, ineffective use of new systems, and increased human error due to the improper use of new systems.

HOW TO EFFECTIVELY EMBARK ON A DIGITAL TRANSFORMATIONAL JOURNEY
The above challenges can sometimes stall progress in a company’s digital transformation. However, business leaders can take steps to ensure they stay ahead of the competition and keep up with customer demands. Here are three tips construction companies should follow for a successful digital transformation start.

Invest in consistent education and training across divisions
The introduction of new technologies, especially those that workers are unfamiliar with, can be a major source of stress in the workplace. Workers that are not familiar with newly implemented digital systems are less likely to use them frequently and are more likely to make mistakes. Companies can preemptively solve these issues by making training available to each employee. This training should be implemented in a way that workers find easy to consume and understand. Training, when done digitally, also provides a way for business leaders to ensure the education is consistent and effective across various business divisions.

Combine new technology with existing workflows effectively
Digitization often finds its way into specific business processes before becoming full-blown digital transformation projects. For instance, HR and marketing processes that are easier to automate might be digitized earlier and new safety systems on the construction site might be implemented later. It is important to ensure these systems do not work in isolation and the data collected and used by each business division is available to everyone for collaboration and review. This prevents the formation of information silos and makes it easy for business leaders to assess a unified and integrated technology stack for further innovation in the future.

Establish two-way communication channels with your workers
Digital transformation can offer businesses the chance to improve operations, increase revenue and reduce costs. However, ensuring that employees are fully behind the transformation can be challenging. A recent report showed that almost two-thirds of business leaders find managing cultural and organizational changes a bigger challenge than managing the technological changes during their digital transformation journey.

The specific concerns that employees might have over any new technology depend on their individual situations. This is why it is crucial that businesses establish communication channels that allow employees to voice their concerns and allow managers to communicate the benefits of the change. Regularly communicating with employees makes them feel valued and they are far more likely to accept changes to their work habits.

These digital transformation strategies, when implemented well, can go a long way in solving the issues caused by aging processes and labor shortages. At the end of the day, introducing technology to traditional construction operations allows businesses to reduce their reliance on an increasingly stretched workforce, improve safety, and increase operational efficiency.

Angie Licata is the COO at Ryvit. Her knowledge of industry ERPs and tools in the marketplace has enabled her to build an expert reputation with some of the biggest names in the industry including SAP Concur, Viewpoint Vista, Procore, and Sage. Licata’s expertise goes deep into the world of product development, integration development, and business management.