Big data is all around, but most contractors can’t explain what it is. In fact, a 2014 construction information technology (IT) survey conducted by Sage found 75 percent of construction professionals are not familiar with the term.

Think about it this way: Business information and data is a lot like building materials. Until they are put in place, they don’t carry much value.

Think of the enormous amount of information that is generated today in the form of text, audio, video, online activity and more. This data is so massive and varied that traditional database management tools can’t capture and process it in a reasonable amount of time. Consumers experience the results of big data daily. Credit card companies mine it to quickly inform customers of unusual charges. Online retailers mine big data to track buying behavior and offer suggestions on what customers might be interested in purchasing next.

Construction has its own big data opportunities. Consider all the information generated from emails, digital jobsite photos and video, electronic RFIs and RFQs, voicemail and text messages—not to mention millions of data points connected to building information models. In fact, big data is getting bigger. According to IMEX Research’s 2011 Big Data Industry Report, data and content will grow 44 times during this decade.

Limited but Promising Use
The vast majority of construction firms today don’t have a big appetite for big data, but they do crave insight. While this new information source promises to be a game-changer, few contractors have the in-house IT infrastructure and expertise to harness and process the data into meaningful insight. In addition, the construction industry hasn’t traditionally viewed IT as a strategic business investment, which likely puts big data low on the priority list. According to the Sage IT survey, more than half of contractors spend less than 1 percent of revenue on IT.  

However, some larger construction companies as well as design and engineering firms are testing the waters of big data. Data-driven design is making use of information such as traffic flow patterns, building occupant feedback and energy usage metrics. Complex construction scheduling is another area where big data is being applied.

Getting to Insights

Big data is part of a larger business shift toward insight-driven decision-making. Many contractors already have internal IT systems in place that allow them to analyze, identify trends and create projections on anything from project profitability to company cash flow. Assuring personnel understands the internal data already available is the first step to reaping the benefits of insight-driven decision-making.

The real business insight will come from comparing one construction company to another. What does the firm’s return on equity look like against similar companies? How about its cash flow, risk exposure and other key performance indicators? This is where big data can offer a wider set of useful information.

The key to industry adoption will be making big data easily accessible and cost-effective for most contractors. Cloud-based services—known for their affordability and ease of implementation—likely will be the answer. For example, opt-in collection and sharing of benchmarking information could happen in the course of normal business when construction companies use cloud-based business applications. All shared data would be aggregated to protect a company’s proprietary information and provide an opportunity for relative and realistic comparisons of cohorts.

What Can Be Done Now?
The use of big data by construction firms will increase as more cost-effective, practical technology solutions become available. While it’s important to understand the potential of big data, many contractors are still in the early stages of using data for decision-making. In other words, firms can do a lot of things now to become more insight-driven businesses. The following four stages of insight-driven decision-making will help a contractor determine where it stands today.
  • Automated reporting. Does the company have easy access to reports showing up-to-date project information and where the firm currently stands financially?
  • Data monitoring. Is the company staying on top of major risk areas using dashboards, automated alerts and key performance indicators?
  • Data analysis. Is the firm looking at data across projects and in different ways to understand why something happened in order to formulate a business strategy?
  • Predicting. Does the firm use a variety of data to make more informed forecasts and figure out what-if scenarios?
Before looking at any data solution, first determine the relevance of the technology to help improve operations and reach the company’s goals. Doing so will guide the selection process. As with any technology, it’s not necessary to accomplish everything at once. Sometimes it can be more cost-effective to adopt information technology in stages.

As big data becomes more mainstream, solutions will come to market that will help turn big data into tools that support insight-driven decision-making. What’s more important is how construction firms will use this technology to complement existing data resources, and what they will do with the information to open new possibilities for their companies.


Jon Witty is vice president and general manager of construction and real estate solutions for Sage North America. For more information, visit na.sage.com.