The Digital Black Hole Impacting the Construction Industry

For an industry that uses increasingly cutting-edge technology on their clients’ projects, construction companies still struggle to embrace tech that provides the same level of precision for the internal workings of their businesses. In fact, the McKinsey Global Institute’s Industry Digitisation Index rated construction as the second least digitised sector in the world.

With relatively few companies digitising their assets, business processes and working practices, a ‘digital black hole’ has formed in the construction industry. It’s a widespread problem that causes large projects to run approximately 20% longer than scheduled and up to 80% over budget. Construction companies are also spending an average of 90 hours each month searching for assets across jobsites.

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Labour, materials and tools are the top 3 costs construction company’s have. They’re also the most difficult to manage – especially when using a patchwork of paper-based systems, sticky notes and spreadsheets.

This way of working is neither transparent nor accountable. It’s also easy for asset management to become dependent on specific individuals, making it difficult for anyone else to pick up the baton if a key person is out of the office. Such systems have negative cost and efficiency implications for managing physical and administrative assets too.

• How much work can a group of 20 workers get done in a day?
• If the number of workers is fixed, how many days do you need to complete the job?
• If the days you have to complete the job are fixed, how many workers will you need to finish on time?
• How much time can you save on finishing one part of the job if you invest in equipment that works faster?

At a time when profit margins are getting tighter and cost of materials are rising, the use of paper-based inventory management systems that are dependant on people are impossible to justify.

Connecting smart batteries and tools to digital asset management software encourages predictability by monitoring inventory through a cloud-based platform. Since it efficiently tracks inventory and the usage of materials and consumables (such as nails, bolts and tool inserts), better estimates can be made when ordering. This can prevent duplicate assets and decreased productivity due to waiting around for the right materials.

Digital asset management software also helps prevent tools from going missing, by monitoring consumables usage and any unauthorised removal of equipment.

While the digital black hole may be common in the construction industry, digitising asset management is an opportunity to better control costs, reduce losses and keep projects running on time.

Digital solutions like smart batteries, connected tools and digital asset management software are increasingly easy to use and relatively inexpensive to implement. Construction technology will more than pay for itself very quickly – by cutting costs on physical assets, freeing up staff for more productive purposes and eliminating the delays caused by paper-based systems.

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