Construction is among the biggest industry in the world yet its productivity growth rate has seen a very slow 1 percent for the past two decades, a report from McKinsey Global Institute stated. The study also pointed out that 13% of the world’s GDP is related to construction. The world spends $10 for construction. While $1.6 trillion of value added could be achieved through higher productivity, which will consequently help meet 50% of the world construction needs.
Yet, as construction has a heavy impact on the global economy, the productivity growth has been dismal. Both time and cost over-expenditures have become standard.
The same report by the global management consulting firm also posited nine shifts that will drastically change the delivery of construction projects. These shifts combine “sustainability requirements, cost pressure, skills scarcity, new materials, industrial approaches, digitalization, and a new breed of player looks set to transform the value chain.
“The shifts ahead include productization and specialization, increased value-chain control, and greater customer- centricity and branding. Consolidation and internationalization will create the scale needed to allow higher levels of investment in digitalization, R&D and equipment, and sustainability as well as human capital.”
Efforts to boost productivity had been going on way before Covid-19 happened. But what the pandemic has done is to hasten technology when countries declared lockdowns and various states of quarantine to mitigate the virus.
Survival pushed the more daring industry players to drastically improve their performances by diverting from old practices to go deeper into digitalization. The industry came at a crossroads that challenged them to be more agile, change the old ways of their organization, as well as invest in technology.
Now-normal mindset
Still, while the global property sector recognized the role of technology to keep moving forward, the construction sector trailed behind in picking up this new-normal mindset.
For Bruce Walls, vice president of Procore, which specializes in construction technology or contech, the hesitation comes not just from the lack of awareness but the investment it entails as well.
“I think it’s more like, a lot of smaller companies are under a lot of pressure financially. The margins are squeezed and there a lot of work on accountability, etcetera. Technology does require a lot of investment. But the other thing is, moving from paper to technology isn’t really about technology but about change management, it’s committing to doing things differently,” he told Daily Tribune in an interview during his visit to the country a few months back.
“When you think about digitalization it isn’t turning a manual process and digitizing it. It’s the opportunity to change the way you do business and changing the way you’re doing things. For smaller businesses, that can be challenging,” Walls added.
Procore Technologies, Inc. is an international provider of construction management software, which aims to connect an entire work team from office to field, across companies, to deliver the project. The company was founded in 2002 by its CEO Toeey Courtemanche with the intention of creating a platform that can support the evolution of the industry. To date, it has 11,00 customers and 1.6 million users in 125 countries.
Procore’s spectrum of software offers include Preconstruction for the planning stage; Project Management connecting project team and synchronizing information; Resource Management for tracking productivity; Financial Management for tracking financial data; App Marketplace for connecting with over 250 third-party applications; and Analytics for advanced analytics and business intelligence (BI).
Procore earned a 2021 Top Rated Construction Product award from business research and review platform TrustRadius.
Walls observed that decision makers in the country have expressed their optimism about prospects in the construction industry. He said, “There’s unprecedented growth and it doesn’t seem to be slowing down. The pressure on cost and efficiency means being able to do more with what you have. In order to do that, you can’t just do what you’ve been doing. The status quo hasn’t been able to do that. We’re very bullish on the opportunities that exist here.”
As the world continues to fast-track its reset and recovery, Walls stressed the reason for Procore’s being: “Our vision statement is improving the lives of those in the construction industry. And this isn’t just some plaque on the wall.
This really is all about what the company is focused on. And it’s exciting, it’s keeping us laser-focused. We’re not trying to create a new kind of technology, but we’re trying to enable those in the construction industry—the largest indusry in the world—to be driven towards productivity, like anything.”