Articles

Business Intelligence Helps Construction Companies Better Their Margins

by Micheal Williams Business Development Executive

Business intelligence drives the construction industry to better margin. We here discuss how BI benefits a construction business.

 

Despite its initial reluctance to adopt business intelligence, the construction industry is fastly becoming trendy and in the past few years, it has become a component of business in the industry. And the outputs are highly positive and very much visible. The implementation of business intelligence in heavy construction companies with multiple moving parts monitor bid/ hit ratios, bid spread, revenue/margin per employee, or daily materials put in place per job.

 

It benefits construction firms in multiple ways. With the help of business intelligence, a construction firm realizes the right time to buy or sell off heavy equipment, bringing in higher profit. Considering the high investment, maybe a company shows less interest in procuring heavy equipment but business intelligence helps the firm to understand that the decreased cost of maintenance and the higher worker productivity justifies the purchase, bringing out better output. 

 

Similarly, a struggling construction firm with manpower at $12 an hour can identify that by hiking the hourly rate to $20, the firm would be better off. As per the initial assumption, doubling the wage bill will add more burdens on business, however, using the technology solution, the construction company can recognize the expenses to hire and train new staff is so high in a tight labor market, that doubling the bill is more beneficial.

 

In the highly competitive market, construction firms need to be more conscious about how to be more efficient. It is crucial because the new generation of employees is technologically competent and companies show more interest to invest in new technology. And by integrating data analytics and business intelligence practices, construction companies prove that decision-making is easier, with more reliable data.  

 

Studies have proved that the major reason for the loss in the construction industry is due to material wastage and remedial work – this accounts for about 35%. And a company when is bothered about the cost of even a single screw can make a big difference.

 

By better-utilizing data, it is possible to make more impact on profits. Many construction companies use tools such as enterprise resource planning (ERP) systems and business intelligence software but they need to be utilized in the right process to get expected outputs. Surprisingly, about 60 percent of general contractors still use Excel spreadsheets to forecast business and analytics, which is both tedious and time-consuming.

 

When businesses adopt technology solutions in construction, it expects to have an impact on data analytics. Construction firms are expected to break down silos among multiple departments, which often run with separate cultures that use different key software. After you tackle those change management issues, use data in the right way to make a difference.

 

So how can data best utilized? Here are 4 ways to do that.

 

·         Build a foundation on good data

 

Construction firms need to standardize their key data across divisions and internal silos and produce a steady, reliable stream of good data. This process must include moving from snapshot data to producing real-time information.

 

·         Create a data warehouse

Companies need to confirm that there exists a central repository of information pulled from ERP (enterprise resource planning) systems that can cover project productivity, payroll reporting, and all other operations. This information must be accessible to multiple executives through visualization tools that will help them in the right decision-making. 

 

·         Operate together

 

A construction firm needs to ensure that everyone works, in the same way, using one set of data. There should coordination among technologists, data specialists, and engaged management to confirm that the efforts mitigate downside risks and maximize upside potential.

 

·         Celebrate the wins

 

Once you implement multiple steps across different departments, the impact must reach different levels and brings out fruitful outputs.

 

There are tons of stories of firms losing millions of dollars on a project where they had expected a healthy profit. These are outcomes of lack of proper data utilization Ensure that your company utilizes data efficiently so that tales of evaporating profits will be tales of the past.

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About Micheal Williams Freshman   Business Development Executive

11 connections, 0 recommendations, 39 honor points.
Joined APSense since, June 15th, 2021, From New York, United States.

Created on Jun 21st 2021 09:04. Viewed 323 times.

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