Construction technology advancements have been pivotal for generating industry growth, maintaining safety for workers and the public, and resulting in more exceptional end projects. Construction and engineering companies rightfully focus on introducing new technology and techniques for their building projects given the ever-increasing customer demand. Additionally, many of these new technologies bring the benefit of reducing the cost and time of projects.

Examples like BIM, virtual reality, thermal imaging, 3D printing, engineered living materials, remote surveillance and drones are already contributing to the industry and will become more widely adopted in the coming years. In fact, according to worldwide professional services firm PwC, the integration of these and other technologies into the sector is accelerating at a faster pace than past technology adoption.

On the other hand, the industry’s record of implementing technology for its own internal operations is less consistent and often dependent on a range of factors that fluctuate over periods of time. Unlike with technology for building projects that generate revenue, modern internal systems haven’t always been a given for construction and engineering companies to keep pace with other industries, or its own needs for operational efficiency. It’s clear why companies are willing to spend top dollar to upgrade technology that bolsters external operations, but what’s behind the uneven application of improved capabilities, such as software solutions, for internal management?

Historical Perspective

It was not always the case that the industry lagged in technology for internal operations. For example, the early 1980s saw a recognition of the need for construction-specific software packages to assist with such requirements as job costing, change orders, bill paying and subcontractor management. By the mid-80s there emerged construction-specific software packages that solved these specific issues.

During the 1990s, more vendors sprung up to offer construction-specific client/server solutions and provide targeted support to the industry. The increase in competition made pricing healthier and options more affordable, so the construction sector benefited from these additional resources. Construction and engineering firms also became some of the first to use mobile applications in the field – pushing the technology envelope.

Economic Impact

Just when it appeared that construction-specific software packages had become a mainstay of the industry, economic realities of the early 2000s set in with major downturns in the economy that significantly impacted construction, as this readership is well aware. It reduced the funding available for R&D to keep up with industry changes and respond to the introduction of the Internet.

The recession of 2008 hit and took direct aim at the construction sector. The customer base for upgrading construction software continued to erode, resulting in far less incoming revenue, and banks were less willing to lend to the construction industry. Smaller software companies, struggling from the dual downturns, no longer had the resources to market and sell industry-specific products - much less develop new platforms.

In the ensuing years since the worst of the 2008 recession, some vendors and customers have had no choice but to make do with outdated software and had limited ability to share across departments or partner organizations. Dated technology that only functions “on-premises” is incredibly limiting, stifles efficiency and is unable to take advantage of today’s cloud-based solutions that provide companies with tremendous efficiency and flexibility. Fortunately, the positive turn in the economy has reinvigorated innovation in technologies for operational management in the construction sector. More companies have begun to introduce construction-specific cloud and mobile functionality.

Moving Forward

How can the construction industry, currently in an up-cycle, see that future down periods avoid the uneven implementation of new technologies that have typified past down cycles? A major step is education, making sure that decision-makers understand the importance of maintaining technology advancements through downturns.

This starts with critical needs such as regulatory compliance, which of course must be adhered to whether the economy is strong or weak. For larger companies the new ASC 606 requirements for revenue recognition need to be addressed this year.

Next, the way new technologies are acquired has changed, going from an expensive capital expenditure of purchasing and upgrading equipment that is quickly outdated to a subscription model where payment is spread over time, and resources are added or reduced when business cycles occur.

Education is key when it comes to the benefits of new cloud and mobile technologies, and that not all software is true cloud. Some of it is simply a hosted version of the old 20-year-old software and does not provide the real value of true cloud. The construction industries use of these modern technologies is accelerating. In fact, according to a BDO Technology Outlook Survey, nearly 75 percent of CFOs named cloud computing as having the most measurable impact on their business.

With this modern technology and purchase options there is ample justification for continuing to update the system to streamline processes and provide internal operational insight regardless of the ups and downs of the industry.