The real estate industry is often criticized for its slow pace of technology adoption. But this slowness pales in comparison to the construction industry, where construction companies spend less on information technology than any other industry, accounting for just 0.01 percent of industry revenue. Even industry leaders acknowledge the technology gap; a recent poll revealed that 62 percent believe the industry is lagging behind other industries in adopting digital technologies. While it's easy to blame the slow adoption rate on a tech-savvy workforce, several factors contribute to the continued use of analog methods in the construction industry.
If a non-technical workforce was the main obstacle to technology adoption in construction, we should see a similar level of digital transformation in manufacturing. But that is not the case. Modern factories, even those that rely on manual labor, use advanced software to track various processes. The difference lies in the predictability of the factory compared to the construction site.
“Imagine a bomb going off in a factory and everything goes flying. That's a construction site,” says Albert Bou Fadel, CEO of SmartBarrel, a company that provides time-tracking technology for construction workers. Fadel worked in the construction industry for years before founding his company and saw firsthand the challenges of monitoring such an unpredictable process. “We need to design software that is very flexible and easy to use, and hardware that can withstand the harshest conditions on the planet,” Fadel explains.
Many developers and contractors have tried technology with limited success: “I've had clients who've spent hundreds of thousands of dollars on technology solutions only to see no results and then develop PTSD,” Fadell says. When construction companies invest in technology and don't see a return or, even worse, are met with resistance from workers, they're less likely to try a different solution.
Another challenge in implementing technology on construction sites is high turnover. Construction workers leave and change jobs frequently, while new workers constantly come in. One day a safety meeting might get everyone on site prepared, but the next day a new subcontractor might arrive without the right information. To get everyone up to speed quickly, they need to use the same platform, which can be very difficult. Some developers mandate the use of common site technologies, such as the popular project management solution Procore, to get new workers up to speed quickly.
One of the big benefits of construction management technology is the transparency it creates. Subcontractors can track each other's work and collaborate effectively. Owners, lenders, and insurers can monitor progress and pay accurately as each job is completed. Materials can be ordered in a timely manner, reducing delays. However, transparency is also seen as a risk to subcontractors. “There's a negative incentive for subcontractors to share information because they don't want other subcontractors to know how much they're making. That's a very difficult hurdle to overcome,” Fadel points out.
The benefits of construction management technology are clear, but that doesn't guarantee widespread adoption. Barriers to technology transformation in construction extend beyond a non-technical workforce. Past technology failures, high turnover rates, and industry secrecy have hindered the integration of new technology. However, technology is slowly making its way into development projects. Benefits such as improved worker safety, more efficient schedules, and increased profit margins are beginning to outweigh the drawbacks, making technology adoption favorable, albeit slowly.
