Why construction firms need to invest in software

Having the right software goes hand in hand with success in the construction industry when competition for work intensifies, and margins fall.
8 June 2023

Digital tools: software is becoming increasingly important to construction firms throughout all stages of major projects. Image credit: Shutterstock.

Costs can quickly add up in the construction sector. Materials need to be bought, contractors need paying, and that’s just a couple of entries on a long list of expenses that companies need to manage. So it’s no wonder that there’s a reluctance for construction firms to invest in software and other digital technologies. Who wants to spend more and profit less? But times are changing, and without the right digital tools, even well-established operators could be left behind.

Why software is so important in the construction industry

Business operations specialist Sage, which supports thousands of clients with its construction management and accounting software, has a handy checklist of signs that it’s time to invest in construction-specific software. If any of these scenarios sound familiar then it’s likely that your construction firm needs to invest in software.

  • Your accounting process is admin-heavy, time-consuming, and confusing for others to understand.
  • The handling of change orders – amendments to projects that affect the work, pricing, and work schedule – is ad-hoc and lacks a formal process.
  • You lose track of costs, don’t have real-time budget visibility, and some jobs turn out not to make any money.
  • Payroll is performed manually.
  • You are still using spreadsheets, and have to enter the same information multiple times in different locations.
  • You are working long days and fail to make any progress.

And these are just a selection of common clues that construction firms need to invest in software. Plus, there are barriers to adoption that need to be understood. Price isn’t the only factor. Companies will be reluctant to invest time in setting systems up if they aren’t 100% convinced that those digital tools will be worthwhile in the long run.

What software do construction firms need?

At a high level, companies need solutions that address their major pain points. And the above checklist will start to narrow down whether issues relate to project scheduling, budgeting, or payroll. But as construction firms looking for software will soon find, the list of products is long, and the bigger question becomes how to choose the right construction management software?

Solution provider Averroes, which offers digital project management and document control tools for construction firms, recommends having a clear goal in mind. For example, if you are constantly struggling with managing planned spend against actual costs, then make that a priority and drill down into systems that simplify the process and offer real-time views.

Next, it’s important to set a budget and consider the number of users. Having these details will cut to the chase when you start to engage with vendors and save on discussing options that are out of scope for your needs. Also, what will be your mix of desktop and mobile use? Most of today’s solutions will have some kind of smartphone or tablet support, but do they include all features of the main software?

Writing about project management software on TechHQ we’ve mentioned that work for clients, which includes activity in the construction sector, often shares the same order. Projects will have starting, planning, executing, monitoring, controlling, and closing phases – plus the opportunity for modification, with change orders, as mentioned above.

But software makers will approach managing those stages in different ways, some with more room for flexibility and customization than others. Reporting on the next chapter in construction technology, consultancy firm McKinsey highlights the rise of the integrated platform. However, construction firms might not want to be locked into the same ecosystem for all stages of the project.

It’s worth asking vendors how modular their digital products are and whether solutions can pull in and work with information from a variety of tools. Many customers will have a preferred way of doing things and – even if they are convinced that they need new software and technology – won’t necessarily want to change all of their operations at once.

The flipside, is that by adopting a software platform, rather than point solutions, construction firms have the potential to take greater strides in stepping ahead of the competition – if they choose wisely. The pace of technological change is rapid, and solution providers are always refining their digital offerings to incorporate new features.

For example, recognizing the significance of artificial intelligence to the construction industry, Procore – a provider of cloud-based construction software – acquired Construction BI back in 2019 to advance the platform’s analytics capabilities.

And, just as in many other sectors – from software engineering to the legal profession – there’s huge interest in how large language models can simplify the management of vast amounts of information. ChatGPT has shown how a simple text prompt can navigate users to all kinds of detailed information, and models can be fine-tuned on company data to make their output even more relevant to industrial users.

Contruction firms with the right software have never been so well equipped to make the most out of future business opportunities. And for companies lacking solutions, integrated platforms provide a quick way to catch up and join the digital age.