How Intelligence Drives Productivity In Construction Projects

Matthias Bohner

Improving productivity is the number one goal for construction companies. The larger the company, the more critical it is to increase efficiency in both execution and delivery. Getting projects in on time and under budget – with world-class quality thrown into the mix; this two-pronged goal is all-too-elusive in today’s world.

With a global productivity growth rate of only 1% a year for the past 20 years while the world’s economy has grown at a rate of 2.8% per year over the same two decades, the construction industry is in dire need of a productivity makeover, as a McKinsey Global Institute study pointed out.

That inequity is even more obvious in the United States. Productivity in the retail, agriculture, and manufacturing sectors has grown by 1,500% since 1945. However, the construction industry has barely moved the productivity needle over those same 75 years.

Boost productivity, solve half the world’s infrastructure needs

Politicians talk the talk when it comes to building infrastructure, but they can’t walk the walk unless the construction industry has the tools to enact whatever infrastructure policy they propose. That’s not a political statement. It’s what the numbers reveal.

Without a change in the industry’s productivity, the McKinsey study showed, the world’s need for more and better infrastructure will remain a pipe dream. If, on the other hand, the industry could boost its productivity to the levels of the overall economy, the value the construction industry could contribute would go up by $1.6 trillion per year. That number, the study pointed out, would meet half of the entire world’s yearly infrastructure needs.

Finding a way to deliver this kind of productivity for the construction industry would be a game-changer.

From better, more efficient workplaces to shopping centers to spend their money, the world’s population will have a higher standard of living, thanks to the improvements in the infrastructure that underlie the pathways of their lives.

If only.

Productivity challenges hold back industry progress

Yet, within these study results lies a possible solution to the industry challenges. It lies within the challenges themselves:

  • Extensive regulations
  • Public sector demand-dependency
  • Corruption and cronyism that often rule which contracts are awarded to whom
  • Mismatches in risk estimation versus potential returns
  • A high degree of fragmentation industry-wide

Intelligent collaboration levels the silos to save time and money

With today’s data intelligence – intelligently applied – the industry has a shot at solving these challenges.

Streamlining all the processes that go into a major construction project – that’s the key. A wealth of stakeholders – suppliers, subcontractors, the regulatory bodies that need to approve various aspects of the process, and of course, the customers – all create a complex web of relationships that we now have the technology and know-how to manage.

With a solution that not only involves contractors but also extends intelligence to all the stakeholders that are involved in a given construction project, companies can save time and money. A comprehensive collaboration platform keeps everyone in the loop: the customers, suppliers, subcontractors, and even the regulatory agencies whose approval a project needs at specific phases in its development.

Such a solution gives construction companies a way to put an end to the document shuffle that characterizes so many construction projects. Instead of passing around documents – not sure if they’re the right drawings or the latest regulatory approvals – the entire project ecosystem exists on a single platform.

Instead of wasting material and labor on a project due to outdated drawings or unapproved changes, collaboration can happen in real time. That kind of collaboration has the potential to boost productivity to incredible levels, saving time and money in the process.

When everyone involved in a project works on the same platform, the intelligence is always current, allowing all the stakeholders to make changes immediately. This kind of agility can defragment the industry – project by project.

An ideal collaboration platform for the construction industry needs to be cloud-native, built on the developer’s own public cloud, so there’s no need for construction teams to spend their time in technology administration. When the developer handles all the hosting, administration, and maintenance, construction companies can save on IT hires and put the lion’s share of their HR budget into recruiting, training, and retaining better talent.

On time, on budget: No longer a pipe dream

Part of the frustration commercial construction firms’ customers face is the millions of dollars they pour into building facilities, only to see interest pile up as these new buildings remain empty after multiple delays. In fact, not even a third of construction projects come in within 10% of their budgets, a KPMG study revealed.

Even worse, only one-fourth of all projects come in within 10% of their stated deadlines. The complexity that creates these delays and overages will likely increase during the coming years, with green buildings, smart buildings, and other high-tech amenities on companies’ “I want” lists.

With real-time collaboration among all the stakeholders, companies can eliminate – or at least reduce – the complexity that gives rise to many of these costly delays. Eliminating that complexity with a remote-hosted, multi-tenant project collaboration platform that’s good to go from day one can provide a way out of the document maze.

Earlier studies have shown that there are complex mathematical formulas that apply to construction delays. With current technology’s capacity for deep intelligence, construction management platforms can provide answers to problems involving those relationships. When you combine that capability with the ability to collaborate throughout each project’s complex network of stakeholders, such a platform can become the key to jumpstart productivity.

Having such a collaborative tool means that the traditional cronyism that has beset the industry for decades can finally end up in the trash heap as the platform’s silo-free approach produces results. With an intelligence-driven platform, construction firms can anticipate regulatory changes, adapting in real time rather than playing catch-up.

With fragmentation virtually eliminated, more accurate estimates with leading-edge building information modeling (BIM) and collaboration that allows various teams to see how changes they make can impact others, the challenges that beset construction companies can become a thing of the past.

Collaborative project intelligence is on the horizon. To discover more, visit our industry web pages for a closer look.

Matthias Bohner

About Matthias Bohner

Matthias Bohner is a Global Industry Solutions Director for the Engineering, Construction, & Operations Industry Business Unit at SAP representing EMEA. Mathias provides a high level of expertise and knowledge of ERP-systems along with an extensive industry network. He has over 20 years of extensive project management experience across a large number of clients. Matthias acts as an industry advocate, keen to deliver value to clients through SAP solutions