Running a successful at-scale construction business is no mean feat. With a lot of moving parts, high levels of complexity, and a high degree of uncertainty in everything from the prices of raw materials through to the vagaries of New Zealand’s (by now infamous) weather systems and shaky ground, those in charge of the business have a lot to focus on – and that’s before engaging the army of tradies and subcontractors who get the job done. The question is, do you have the best enabling systems and technology? Chances are the answer is ‘no’.
Now, far from making this assumption lightly, and far from noting the preponderance of articles in the press detailing ‘yet another construction company goes bust’ and far from conveniently tying business failures to underinvestment in technology, we will go ahead and say that many organisations in this field aren’t, in fact, using the best ICT systems available. We can make that claim because consulting companies including McKinsey and Deloitte have done the mahi and found that this is indeed the situation.
Deloitte, for example, notes “When looking at IT investments, the construction industry has historically underinvested in technology — only 1.2 percent of its revenue is allocated for IT, compared to a 3.5 percent average across industries’. In its 2019 paper ‘Point of view on Digital Construction’, the company goes on to say “We believe that digitalisation presents a significant opportunity to not only deal with challenges but to use them to thrive.”
For its part, McKinsey pointed to poor productivity growth in construction at an average of 1 percent a year over the past two decades to 2017, compared with 2.8 percent for the total world economy and 3.6 percent for manufacturing. Arguing that gains of 50 to 60 percent are possible, McKinsey included ‘digital technology’ as among the several factors that should be focused upon.
Anecdotal evidence in terms of a chat with the CIO of a fairly hefty Kiwi national construction company some years ago confirmed the same; to paraphrase, this individual described average technology maturity as somewhere between the Stone Age and the Bronze Age. He also noted thin margins for the sort of major infrastructure and related contracts, along with those vagaries discussed in our opening paragraph; these circumstances are almost certainly at least in part behind the high-profile construction failures routinely dominating the headlines.
It’s not hard to see why ‘computer stuff’, including enabling software, gets short shrift. Construction bosses tend to be gruff types, often drawn from engineering backgrounds or coming through the ranks directly as builders (this is more often the case for regional home construction companies – perhaps like yours?). The focus is on getting stuff done at the coal face, managing supplies and suppliers, being on-site and being in charge.
That’s a solid and proven approach. It’s also one which falls down when there are more than 3 or perhaps 5 projects underway at the same time. With say, 10, 15, 25 sites, tens or hundreds of contractors and subbies, thousands of expense line items, and – quite frankly – a huge amount going on, your ability to manage everything accurately, on time, and (crucially) profitably takes a big hit.
What’s the answer, then? Since we provide Enterprise Resource Planning software, and since both Deloitte and McKinsey point to digital technology as part of the answer, we’re going to go ahead and say this is an ideal place for targeted investment.
Specifically, MYOB Advanced Construction is companywide cloud software providing complete visibility across all projects, resources, budgets, teams and schedules. Specifically pre-configured for your industry, MYOB Advanced Construction starts with financial accounting including job costing and incorporates construction project management functionality. With this solution, you gain clarity on every project, taking in every aspect of every job and delivering the clear, timely and accurate information necessary to manage the current and future states of every project.
Rather than putting out fires – and let’s face it, a lot of your work resembles that of a firefighter – Advanced Construction delivers the ability to proactively identify problem areas in current jobs, increase collaboration across teams and streamline time-intensive processes to avoid project delays. Drowning in spreadsheets, ‘back of a cig packet’, Word documents, and cobbled-together tools? A single cloud system reduces complexity by managing customers, budgets, teams and schedules in one single place.
Now, while we’re absolutely confident that MYOB Advanced Construction will contribute to a better construction business, it isn’t a panacea, and it can’t ‘fix’ a poorly-run business. It is one part of a broader whole which offers the potential for greater efficiency and more precise management.
But, if implemented right, it can be one crucial part.
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We’re excited about what MYOB Advanced Construction can do for you, and believe you’ll find it highly appealing too.
Are you interested in learning more? Do get in touch.
