In 2018, US construction companies spent $177.5 billion on work that didn’t move their projects toward completion.
This staggering amount was mostly wasted because construction teams lack the essential tools needed for effective work. Without proper project and data management tools, they spend an average of 35% of their time dealing with distractions, resulting in unproductive work.
The construction industry's productivity crisis is no secret, and the $177.5 billion spent on wasted work is only a fraction of the $1.6 trillion in unrealized productivity. Nevertheless, addressing these losses is critical as they offer immediate opportunities for improvement and yield significant return on investment.
I. The Problem with Paper
The construction industry is stuck between two worlds: paper and digital. With the rise of the digital era, technology has inevitably made its way into different construction processes, with smartphones, the internet, and email becoming standard tools on every project.
The issue is that the industry has failed to adapt to these technological developments, continuing to rely on outdated systems and processes created when paper was the norm.
This struggle between the digital and paper worlds is the primary reason why construction is stuck spending $177.5 billion on unproductive activities.
Attempting to use both paper and digital processes simultaneously only creates duplicate work, leading to organizational chaos.
Going back to an all paper system is not an option. nobody will hire a contractor that relies on paper. The only solution is for the industry to adapt to a new set of digital tools and processes to avoid wasting billions of dollars trying to hold onto old ways.
Fortunately, transitioning to digital tools and processes is not as difficult as it sounds.
In this blog, we’ll identify the activities that waste time and demonstrate how to calculate the value of this wasted time. We’ll also provide practical solutions to these problems, share real-life examples, and guide you on the best ways to get started.
II. How Going Digital Eliminates Unproductive Activities
How do construction employees cost their companies nearly $200 billion a year in unproductive work? To answer this question, you need to categorize the activities employees engage in on a project.
Construction work typically falls into one of three categories:
- Coordinating project teams
- Executive project deliverables
- Stakeholder meetings
- Project reporting
- Tracking down data
- Dispute resolution
Activities that fall under the project and client categories are productive as they are necessary to move the project forward.
In contrast, activities under complications are unproductive as they either hinder project progress or result from avoidable setbacks.
To optimize team productivity, you want to prioritize project-focused activities and ensure client-focused work is effective and concise. Ideally, complications should be avoided altogether. However, before this can become a reality, it’s essential to understand what’s going wrong and identify ways to address these issues.
The issue with paper in a digital world
Paper may seem like an easy option, but it is certainly not convenient. It’s easily damaged or lost, cannot be sent instantly, and requires changes to be made on a computer, reprinted, and redistributed. Paper is also costly and hinders collaboration unless individuals are in the same room.
In a world where paper is the only option, these issues aren’t roadblocks because everyone is on the same page. However, in today's digital world, relying on paper is a recipe for disaster.
Expectations have changed, and people expect to work with the most current information. When teams have outdated information, mistakes occur, costing time and money to fix - meaning one outdated piece of paper could make the difference between profit and loss.
Mixing digital assets with paper creates too much potential for errors, not to mention the tedium of transcribing paperwork to digital documentation. If you want to eliminate complications, and the wasted work associated with them, you cannot rely on paper in today’s world. However, this brings up another challenge - organizing and managing digital data.
The issue with poorly organized data
While digital records offer the advantages of being easy and convenient to create, they can also be overwhelming in volume.
Inadvertently creating too much data can be as harmful as relying on paper processes. When data is disorganized and difficult to find or update, it can be as problematic as not having any records at all.
For example, consider photo documentation. Customers often come to us with over 50,000 photos from a single project. These photos are often scattered across different devices, including cloud storage, USB drives, and personal devices. When a dispute arises, teams are often paralyzed, no one has the time to sift through that many photos, especially if the evidence they need might not even be there!
To address this problem, construction teams must embrace digital tools, but also make sure to keep their digital data streamlined and well-organized.
Going digital should not simply mean replicating paper workflows on a computer. Rather, it should involve using tools that facilitate collaboration, data sharing, and organization, while minimizing the risk of information overload.
Enable your teams to do more with less
The benefits of digitizing your business are significant, allowing you to optimize your operations and achieve more with less effort.
- Equip teams to collaborate remotely on distant projects
- Reduce mistakes and eliminate rework by keeping all plans current
- Streamline planning and logistics with rich, mixed data instead of hand waving
- Perform real-time QA & QC to catch issues at the start and resolve them instantly
By implementing digital workflows, teams can concentrate on the top priority: project-focused work, while keeping customer-focused tasks concise with limited complications.
Efficient data organization is another key advantage of digitization, it enables teams to easily access data, stay up-to-date without time-consuming meetings, and ensures everyone is working with the most current set of data.
Even if you understand how inefficient data management is affecting your productivity, you may not realize the cost that comes along with it.
In the next section, we’ll explore how to determine the true cost of data mismanagement to your business.
III. How Wasted Time Costs Millions of Dollars
Poor data management can lead to unproductive activities that many businesses often overlook or consider a necessary cost of doing business. But, do you know how much money you’re actually leaving on the table?
The cost of wasted time can add up quickly when multiplied across a large workforce. For example, a single minute of unproductive time for each employee may seem insignificant, but it can cost millions of dollars in lost productivity annually.
Estimating the spending on unproductive time is relatively straightforward by looking at national averages and applying them to your current staff. The table below provides an idea of the time and cost associated with unproductive activities for different construction roles.
For instance, a small construction firm in the United States may spend approximately $76,675 per month, or close to $1,000,000 per year, on unproductive work, which is a conservative estimate.
If a small firm is leaving over a million dollars per year on the table, it’s easy to see how the entire US spends $177.5 billion on wasted time.
By addressing this issue, businesses can free up resources to focus on project-related tasks, leading to significant cost savings.
With this in mind, take a few minutes to get an estimate of how much your firm is likely spending on this problem. Is it a number that’s worth doing something about?
In the following sections, we will explore how to fix this problem and recover the millions of dollars going to waste due to poor data management.
IV. Why Innovative Data Management Is Critical
When businesses realize they are spending money on wasted time, their first response may be to simply tell their employees to stop wasting time. Unfortunately, this approach is likely to demoralize the team and only make the problem worse.
A more effective solution is to provide better tools and technology to improve productivity. What makes more sense: giving someone 10,000 nails and telling them to hammer as fast as possible, or getting them a nail gun?
To eliminate unproductive activities caused by poor data management, businesses need to invest in a data management tool. But what exactly does that mean?
Let’s break it down.
Data management software in construction
Construction projects create a vast amount of data which needs to be stored and accessed for years to come. However, data management isn’t frequently top of mind for construction teams, often resulting in poor outcomes.
So, what does a good data management tool look like and how do you use it? A high-quality data management platform saves you time by:
- Automatically organizing and categorizing assets
- Providing intuitive information retrieval accessible from anywhere, at any time
- Having a simple user interface that requires minimal training
- Complementing your existing information gathering practices
Essentially, it simplifies the process of using digital records by automatically organizing your team’s activities.
How are data management tools different to other types of construction software?
Most construction software creates data, and then organizes it within its own system. These are called point solutions.
They typically excel at solving one problem, for instance photo documentation, daily reporting, or time tracking.
The problem with point solutions is that they’re expensive and difficult to integrate with other software systems, creating information silos.
Data management tools, on the other hand, can integrate with all your software and devices, providing a streamlined overview of your projects. By bringing all your data into a single, centralized location, these tools can help eliminate the problem of wasted time caused by the lack of coordination between point solutions.
A good data management tool can help identify the issues impacting productivity and provide actionable insights to help eliminate wasted time.
5 key factors impacting productivity
Productivity is crucial for any organization to succeed. Unfortunately, several factors can contribute to unproductive activities. Research indicates these five problems are responsible for 93% of these activities:
1. Poor communication among stakeholders
2. Lack of data responsiveness
3. Confidence in data accuracy
4. Difficulty gathering information
5. Inability to collaborate effectively
These problems are interconnected and stem from the lack of a centralized reliable system for people to access and share data.
The good news is by implementing a data management system, organizations can address the root cause of unproductive work.
It may seem improbable that one system can solve a host of problems, but it's not as complicated as it sounds. In fact, implementing a reliable data management system can have a significant impact on organizational productivity.
Let's take a closer look at OnePlace, our data management system, and how it solves these problems for our customers.
V. Data Management in Action: Case Studies
Understanding how proper data management prevents companies from losing money on unproductive activities requires context. For this purpose, we’ll use our own data management platform, OnePlace, with some practical examples of how the system eliminated this cost for other companies.
What is Unearth's OnePlace software?
To be a data management tool, you have to figure out how to not only effectively organize data, but also how to do it automatically. That’s why our team landed on a unique system of geo-location.
Instead of organizing your data in files and folders, we organize it on a map of your job site - something that matches the way you actually think about a project. When you need information you can just zoom in to that part of your project, filter by content type, and you’ll immediately see all the available data.
Using geolocation is particularly handy because the majority of modern tech attaches GPS data to the files it creates. Which means all we have to do is read that data to ensure it goes to its exact location on your site without you ever having to do anything.
Our system essentially ingests all your data, sorts it by location, overlays it on a map of your project, and then gives you the tools you need to analyze and share it.
Case study: Rotschy Inc.
Project: Port of Vancouver Rail Yard
Location: Vancouver, WA
Problems Prevented: Poor stakeholder communication
Summary: Inefficient stakeholder meetings to coordinate an active rail yard during construction were causing major delays.
Poor communication among stakeholders can be a significant contributor to unproductive work. To illustrate the impact of data management in addressing this problem, let's examine a railway project for our customer, Rotschy Inc.
Due to geographical constraints, most of the stakeholders were not located in the same area as one another or the project.
However, communication and staying up-to-date were still crucial, as eight different organizations needed to maintain shipping schedules while the port was under construction.
To try and maintain the port's shipping schedule, project stakeholders and contractors scheduled weekly in-person meetings. Unfortunately, these meetings took hours to complete and required additional hours of commuting.
Despite these efforts, the project was still falling behind schedule because last-minute problems would inevitably arise throughout the week. To address this issue, the general contractors required a reliable and effective communication system that provided real-time data.
Using OnePlace, they overlayed their PDF plans on top of drone imagery of the rail yard. This allowed them to use the platform's annotation tools to mark up the plans and provide real-time updates about delays, train schedules, and the impact of the construction.
The new insights were so effective that they were able to eliminate their weekly meetings, saving 4-5 hours per week for each of the 30 stakeholders at 8 different companies.
They also eliminated project delays from rail yard logistics that were averaging 10-15 hours in backups per week. These delays were not only setting the construction schedule behind but also causing expensive delays on shipments from the port.
By implementing a reliable data management system and giving stakeholders access to the information they needed, this port project was able to streamline operations, resulting in almost $15,000 in cost savings per week.
Case study: Obayashi
Project: Eglinton Square Tunnel
Location: Toronto, Canada
Problems Prevented: Difficulty gathering information, lack of data responsiveness, lack of confidence in data accuracy
Summary: After completing a project, Obayashi ran into a dispute and needed to sort through 50,000 photos for evidence.
When teams can't access relevant information from available data, or even worse, can’t find what they need at all, complication-focused work ensues. Fortunately, with the right data management tools, these issues can be resolved, even after a project has been completed.
The general contractor, Obayashi, recently completed a tunnel project that ended up in a dispute that went to court. They needed to prove that the construction had met certain progress milestones within specific time frames.
Although the team had taken over 50,000 photos to document the project, no one had made sure that the images were organized. As a result, the evidence they needed was likely present, but they had no means of uncovering it.
By using Unearth for data management, they bulk uploaded all 50,000 photos, and the system parsed the associated metadata to automatically sort them by location and date on a map of their jobsite.
This provided the team and lawyers with an easy way to immediately understand what work had been completed and when, saving hundreds of hours and hundreds of thousands of dollars in spending on complication-focused work.
With Unearth, Obayashi was able to quickly access and analyze relevant photos, which allowed them to successfully prove that the construction had met the required progress milestones.
Why data management matters
The two previous examples illustrate how construction data can quickly get out of control, but also how easy it can be to resolve the problem. Data management doesn't have to be a complex or massive undertaking. With a few simple steps, the industry can reverse billions of dollars in unnecessary spending.
VI. 6 Key Steps to Getting Started
The potential for construction firms to save a significant amount of money by adopting data management tools is abundantly clear. To get started, here’s a practical guide:
1. Get a realistic assessment of the potential savings
Use the table outlined in section III to estimate how much money your firm is losing to ineffective data management. Consider your company’s best practices to get a better idea of whether you’re above or below the national average.
2. Bring this number to the people who matter
Discuss the importance of data management and why it matters with your team. Get people fired up about the significant savings it can bring to your organization.
3. Weigh your options
The data management industry is still relatively new to construction, and the options are somewhat limited. Research and compare at least three options, we’d suggest Unearth, which specializes in organizing construction data and improving data management workflows.
4. Connect with your favorite data management softwares
Reach out to your preferred software providers, and they should be able to provide a detailed program to help get you up and running with minimal effort.
5. Get moving on a pilot program
Start with a pilot to test the software, this is typically a short-term subscription at a discounted cost that allows you to become familiar with the software and ensure everything works as expected. At the end of the term, you can decide to continue or terminate your subscription without any penalties.
6. Be ready to keep pushing forward
Stay committed to expanding your capabilities as the benefits of digital innovation increase exponentially with scale. A single project can demonstrate a small ROI, but getting your entire company on board will revolutionize your business.
Learn more about our construction solution
See how OnePlace for Civil Construction can help you effectively manage your project data. Reduce delays and rework, increase project management efficiency, and ensure a high-quality project turnover.