Shifting the Perception of Technology in Construction

Shifting the Perception of Technology in Construction

When we think of some of the industries that have rapidly embraced technology, manufacturing and financial services spring to mind. AI-driven automation has streamlined production in manufacturing, while software solutions have transformed regulatory compliance and digital customer interactions in finance. Yet construction remains one of the slowest industries to adopt new technology. According to the McKinsey Global Institute industry digitisation index in 2021, construction ranked second to last in digital adoption among major industries.

This reluctance stems from the industry's nature. Unlike manufacturing, where repetition simplifies automation and ROI is easy to measure, construction is inherently project-based. Each build is unique, making standardisation difficult. Unlike finance, which thrives on digital infrastructure, construction depends on physical labour, materials, and supply chains, making digitisation a greater challenge.

The industry's financial structure further compounds the issue. With notoriously thin margins, even minor inefficiencies can erode profitability. This fosters risk aversion, with firms sticking to proven methods rather than investing in technology with uncertain returns. Additionally, decision-making is fragmented across multiple stakeholders, creating inertia against change.

The Cost of Hesitation

This slow adoption has consequences. As other industries use technology to cut costs and improve efficiency, construction lags behind. Productivity gains have stagnated, and cost overruns remain common. While global manufacturing productivity has grown by 3.6% annually over the past two decades, construction has only seen a 1% improvement. In an era where digital transformation defines industry leaders, construction’s reluctance to innovate risks making it increasingly inefficient and uncompetitive.

Yet change doesn’t have to be costly or disruptive. Technology should be seen not as an all-or-nothing overhaul but as a tool for gradual improvements that enhance existing revenue streams and capitalise on marginal gains. With average net profit margins hovering around 2-4%, such small improvements can easily deliver material improvements. 

A Low-Risk Path to Innovation

In recent years, we’ve seen the advent of vertical SaaS providers entering the construction industry to solve very specific pain points faced broadly across contractors and house builders. These solutions typically integrate with existing back office systems to achieve incremental enhancements to operations without much if any IT replumbing. Unlike large-scale transformation projects, these additions simplify or monetise existing transactions and workflows, making them a low-risk, high-reward entry point into tech adoption. By leveraging such technology, construction companies can boost profits and gain a competitive edge without overhauling operations. Innovative project management solutions have been adopted by contractors to rationalise systems and achieve impactful time savings of up to 50%, getting employees back spending more valuable time on site. Easily installed tech, predicting building damage before it becomes visible, enables remediation work to take place early and delivers large cost savings.

The Future of Construction Lies in Strategic Adoption

The industry doesn’t need to, nor could it, leap into full automation overnight. Shifting attitudes towards technology will begin when executives are able to discern between the implementation heavy solutions of decades gone by, scarring though they may have been, and the many easy-to-use tools now at their disposal, to optimise and simplify operations. By allowing technology to monetise or simplify processes in a steady incremental way, an industry underserved by software will begin to realise some of the benefits which so many others already have. The options now exist, it is up to forward thinking executives to take advantage.