KPMG: Slow Technology Adoption Plagues Construction Profitability

KPMG Slow Tech Adoption Plagues Construction

This week saw the release of KPMG’s annual construction industry survey. The conclusions may be startling, but they serve as a wake-up call for any company involved in large projects. After surveying 218 senior executives the main take-aways are:

  • The industry is slow to embrace technology – as project complexity increases, as well as associated risks, less than 8% of respondents are leveraging newer technologies, and only 20% are actively disrupting internal operations in response.
  • More data, but less access – even as available data increases, over 75% of respondents say they lack the resources and skills to effectively provide business insight.
  • Real time project reporting remains elusive – only 20% of participants stated they have a single, integrated system, while most continue to complain about manual processes across multiple systems
  • Mobile technologies are still coming onboard – less than 33% said they are effectively using mobile platforms in their day-to-day operations.

It all seems rather dire, but as technology providers to this industry, we have some conclusions of our own:

Slow embrace vs. Burn Victims

The last decade has seen rapid advancement in the availability of technology for Construction. In that time, we watched many companies jump onboard, only to be disappointed with the results. Rather than agreeing on a single foundation or platform, companies attempted to satisfy each operational team with diverse solutions, only to be surprised when expenses (and tech people) seemed to multiply uncontrollably. Return on technology investment became harder and harder to prove, as the demands of the field continues to grow. No wonder many executives are reticent.

Big Data?  Big confusion…

Our clients know the data is out there to help them streamline operations and track profitability, but why is it so hard to get at it? They have experienced the never-ending dance between operations and IT as the promise of KPI dashboards and agile reporting seems to fade away. Operations people, constantly under pressure to provide information every day, soon give up and return to tried and true manual reporting. Despite the expense, it’s predictable.

Projects in real-time

We’ve heard it time and again, why do we always seem to find out about project overruns when it’s too late to do anything about it? We’ve spent big bucks on all of this software and we’re still not getting what we need. People are still downloading information from various sources and creating reams of spreadsheets. There has to be a better way.

Mobility, schmobility  

Oh sure, everybody in the field has a cell phone, but when we want to discuss utilizing this available resource all we hear is security concerns, bandwidth issues and integration problems. Construction companies are not phone companies; can someone help?

Our Recommendations

So, if you haven’t noticed, there’s a recurring theme here. Standardizing processes and reporting across the enterprise requires a single, unified solution and less spending on hardware and infrastructure so that return on investment is quicker and easier to prove. How do we get there?

  1. Get out of the hardware business – the Microsoft Azure cloud allows you to stop buying servers (and paying people to maintain them) AND it lets you only pay for what you need, scaling expenditures up and down as seasonality or utilization varies. Plus, it’s guaranteed to be available 24/7/365.
  2. Get out of the software business – deploying a unified solution, like Microsoft Dynamics AX  or Dynamics 365 for Operations provides a tried-and-true, single platform for construction companies and all of their operations. Eliminating diverse programs reduces expense and puts the stop to manually reporting from many different sources.
  3. Reporting should be easy – there are new, intuitive tools out there, like Microsoft’s Power BI. Users can easily create their own queries, dashboards and ad hoc reports without the endless collaboration with technical resources. Microsoft’s Datazen allows for sending top level numbers to executives’ devices (cell phones, tablets, etc…) on demand. And the truth is, you probably already own this product (if you use SQL Server).
  4. Project Reporting in real time is easier when you have a single, unified platform for project management. Microsoft Dynamics AX provides just that, an advanced workflow management programs for highly complex projects. Leveraging the Microsoft Azure cloud allows for access from any device, anywhere, any time – so you can begin to see real time results immediately.
  5. Get out of the phone business – mobility is easier when you use the cloud. Security and connectivity need to be monitored 24/7 and you don’t have those resources, nor should you. The Microsoft Azure cloud provides the security in a safe, predictable and surprisingly economic way.

At a time when you are experiencing increasing pressures to increase margins, even in the most incremental way, it’s time to get out of the technology business and get back to managing your projects. Let us show you how!

Check out our other blogs in the Construction series, including:

4 Technology Trends Construction Firms Should Embrace

Are You Ready for Trump’s Construction Economy?

Dynamics 365 – Disruption for the Construction Industry

Design-Build: How Will Construction Companies React?

Why do Construction Companies Struggle with Automated Job Assignments?

If you want more information about Microsoft Dynamics AX, visit our Construction page or Contact Us today!

  Dynamics 365 for Finance and Operations: Fixed Asset Acquisition … There are Options!