The construction industry is huge. If it were a country, it would have the third-largest GDP in the world. But the largest global industry is also the least digitised. It comes in at just 1% on the digital index, ranking behind agriculture and mining.
The lack of digitalisation in construction is especially surprising considering that:
Razor-thin margins (3-5%) are the norm
80% of projects go over budget
Customer satisfaction has been a long-standing issue
The industry has the highest rate of insolvency
Construction is a cyclical, project-based industry with a fragmented ecosystem, complex local regulations, and frequent labour shortages. So digitalisation could provide a huge opportunity for change. By leveraging the power of digital platforms, E&C players can have greater visibility, drive productivity, and better manage risk.
Digital solutions are improving risk mitigation in construction
In a sector where mitigating risk is the top concern, digital solutions can unite fragmented data from different systems to help businesses improve forecasting and bid on the projects that are healthiest for them.
For instance, the Salesforce Platform can help construction companies choose their level of risk in a more informed way, based on internal and external data. It can help them pick the right project to bid on in the commercial process. And in the execution phase, it provides increased control over the execution site and visibility on the status of projects and portfolios.
Leveraging the power of digitalisation to improve risk mitigation in construction is one of the trends we can expect to reshape the E&C landscape. Let’s look at a few others.
Construction trends show that data is fuelling the engine of transformation
Digital has been neglected for too long in the industry but this is starting to change. A McKinsey survey reveals that COVID-19 has accelerated digital transformation. In fact, 60% of respondents stated that they’ve invested in digital over the past year.
Regulations have become stricter. We’re seeing companies focus more on sustainability and health and safety concerns.
End-customer expectations have never been higher and requests have never been more complex. This is resulting in a shortage of skilled labour and a race to find solutions for improving customer service.
The popularity of modular construction and the industrialisation of design are changing the way that firms build. This makes product and design data even more critical.
Digital platforms are turning construction companies into solution providers
We’re squarely in the ‘age of the customer’. The digital arms race to capture attention, win more bids, and build customer loyalty is heating up. Customer satisfaction has long been a pain point for the industry. Cost and scheduling overruns frequently lead to budgeting issues, unhappy customers, and frustrated firms.
Now, as more and more businesses move from being construction companies to being solution providers, focusing on customer- and project-centricity is more important than ever.
Here are some ways that organisations can use digital solutions to drive productivity, minimise risk, and improve customer satisfaction:
Organisations are leveraging data to see if potential projects are a fit with their goals and capabilities. Avoiding ill-fitting projects before they start is one of the best ways to mitigate risk.
Companies are tailoring customer interactions to collect data and know their customers better than they know themselves. This data not only helps companies predict what a customer might want, but it also helps them know what a customer really needs. Getting to know the customer and staffing the project properly can improve win rates by 10-15% and reduce costs by 15-20%.
Digitalisation helps companies communicate better, manage customer interactions throughout the entire project, deliver more projects on time, and avoid costly overruns.
Digital technology in the construction industry can lead to big wins
More and more firms are turning to digitalisation to:
Automate processes
Free the workforce from manual reporting
Streamline project management
Make faster and smarter decisions
Connect their team members in real time
Having one platform to provide a single source of truth and connect team members is a powerful facilitator for sharing and collaboration.
Digitalisation can also improve the bidding process. When a single project can account for 10% of an E&C’s company’s revenue, leveraging data to provide the right prices is critical. Digitalisation offers a holistic way to build the best proposal, driven by past costs and market information.
By building an integrated database measuring historic performance levels, costs, customer satisfaction and more, companies can create a layer of agility, better manage third-party suppliers, and reduce the costs of procurement by 3-5%
After the tendering process, businesses can leverage digital solutions to link the commercial process to delivery, improve resource allocation and optimise their workforce. Imagine having a map that displays your resources by expertise and location availability, and with a single click, you can put together the perfect team and directly hard or soft book it: that’s the power of digitalisation.
How Salesforce can help businesses face the future of construction
Businesses can start their transformation journey by identifying strategic objectives, looking for any obstacles that might stand in the way of success, and then using that information to create a digital roadmap.
For organisations that are looking to step onto the digital frontier for the first time, the importance of finding a strategic ally that understands their unique business goals cannot be overstated. Organisations need a trusted partner that can match their business needs with the right technology. But adopting new technology is just the starting point for Construction 2.0. Companies may also have to transform their way of working to truly maximise their potential.
Salesforce can help on both fronts by offering an end-to-end platform to improve:
Visibility
Field service
Project management
Data integration
Bid selection
Price accuracy
It also offers Concierge, an employee-first solution that empowers the workforce to find support. By uniting legacy systems and data, organisations will have better visibility at the portfolio level as well as the project level, enabling executives to make faster, more data-driven decisions.
Salesforce is investing heavily in digitalisation for construction, as the future of construction is the future of us. It shapes the way we live, work, and build. It’s with this in mind that Salesforce wants to help companies in the construction industry reinvent themselves so that they can help reinvent our world – and it all starts with getting connected.
Download Trends in Architecture, Engineering and Construction to see more about how construction firms are going digital and driving revenue.
