The CIO Journey: Balancing IT Needs and Tight Operating Margins
The construction industry is a prime for significant change in the next decade. A widely diverse industry, construction embodies all size organizations, with annual revenues in multiple billions to a three person, family owned business. Each construction company has different organizational needs, utilizes different technologies and software systems, incorporates unique expertise and experiences, and has many custom processes and controls to run their businesses. As a result, one of the biggest challenges facing the construction industry is balancing organizational IT needs and tight operating margins, while promoting productivity and efficiencies through a diverse and abundant set of solutions—in short, the industry has so much data and not enough security or standards.
More mobile technology out in the field, on the surface, would appear to be a good thing, but in reality an opposite effect could be felt in the future if companies do not consider the full cost and impact of releasing these newer technologies. The number of systems deployed to run a sizeable construction project is stunning. Breaking down the flow at a high level, most typical construction jobs have a long trail of business development and relationship management data points, which lead to architectural designs, business information models, and drawings and specs. These early phase construction projects require significant amounts of effort to build complete, comprehensive bid packages and estimates, again more data points. If the project is awarded, then the teams assemble to mobilize staff, equip, plan, budget, design, build and track performance of the project—more data points. Each data point is generated from an application or system, and depending on the solution, the data points might be isolated in a mobile application or cloud offering, thus requiring IT to develop data integrations between the various systems or applications in order to achieve the intended results.
There is no doubt that the construction industry is ripe for a technology overhaul; however the influx of new software solutions at the mobile level is staggering
The problem is multi-fold, in that with the advent of technologies such as biometrics, RFID, IoT, and mobile applications, combined with an appetite for technology and information, the result is a flood of unstructured, often static data sitting on individual computers, in data centers or in the cloud. How is this much data ever going to be fully consumed or reused? Does the construction industry really understand how all the data being produced is contributing to better productivity or higher margins? There is no doubt that the construction industry is ripe for a technology overhaul; however the influx of new software solutions at the mobile level is staggering. The value appears to be there, but the move to the cloud and the growth of mobile applications contribute to this flood of data, at a staggering rate.
Construction companies are rapidly adopting new technologies with the vision of empowering the users in the field. The technologies are truly amazing in that a Project Manager or Project Engineer has, at their fingertips that ability to access building plans, read a safety bulletin, verify the financial performance of the project, approve an invoice or submit a timesheet. Arguably, one can say that productivity has definitely improved, but where this is heading next is the real challenge for the industry. When considering some of these emerging concerns, such as: reusability of the information for future projects (business intelligence), collaboration with other company team members or sub-contractors (security and privacy), data exfiltration (data protection and orphaned data), data retention policies and compliance (balancing act between keeping what is needed and disposing of what is not) and cybersecurity (internal/external risk, espionage, cybercrime, etc.), it isn’t surprising to see Operations and IT sometimes at odds over direction and strategy.
Taking the position that the push to mobile and cloud apps is inevitable (not to mention the right thing to do for the construction industry), it would be irresponsible not to consider how this trend is going to impact data management, business intelligence efforts, maintaining the vision for a “single source of the truth” for financial and project performance reporting and cybersecurity. Creation of more unstructured data stored in the cloud, often associated with an individual user accounts, only increases the complexities of managing an already understaffed, deadline driven, budget constrained IT department.
It is not unrealistic to assume that productivity at the job site has the potential to increase, but only if standards are followed. If job sites are using different technologies and applications based on preference, experience or perceived lower cost, the net effect for the job site may be an increase in productivity, however the net result to the company might belower efficiency or productivity as team members move from job-to-job and are required to learn new applications and processes.Similarly, as companies leverage these mobile and cloud solutions, the risk of leaving orphaned data, housed in a cloud app that is no longer used, increases with each individual user or project has the ability to buy software on a company credit card.
The construction industry is evolving. Most view this is a good thing, but smart organizations will look at the full picture as decisions are made to leverage new mobile and cloud technologies. Most companies are looking at the cost savings of outsourcing IT services to the cloud, assuming all the cost and risk will be pushed to the hosting provider, however, the savvy construction companies are recognizing those hidden costs, productivity impacts and risks associated with this exciting modernization of construction software and technology. The benefits are there, but so are the risks. Construction companies that have policies or solutions to help manage these risks, and who properly consider the rapidly growing mobile application adoption rates and data production volumes will be able to take advantage of these opportunities and realize the benefits of these technology adoptions.