Considering cash flow restrictions and the many factors that can impact the bottom line of a construction project, it is understandable that the construction industry is often slow to accept new technologies. However, being too resistant to the rapidly changing technological landscape can quickly hurt your company’s ability to compete and retain skilled labour.
Readiness for Change
Most new technology requires work processes to change which requires total support from management, as well as buy-in from the staff directly impacted by the change. In accounting and audit, we review the “tone at the top” as a key indicator of the tone of the entire organization. Management’s behaviours and values can directly or indirectly affect everyone in the organization and therefore, are key determinants of the success of any new investment or process. With technology investments generally requiring significant cash outlays, management’s support and monitoring of staff buy-in throughout implementation is key to its ultimate success. Technology often fails not because the technology itself is inappropriate but due to a lack of employee buy-in and therefore, lack of adequate use.
Recruiting and retaining skilled labour is a top priority in the industry; therefore, getting the most out of your labourers while keeping them engaged and happy is always top of mind. A study in 2008 examined how changes in both equipment and material technology impact labour productivity. Technologies that improve the functional range of equipment (i.e., range of motion and uses) and reduce material unit weight saw the greatest increases in productivity, both achieving a 38% increase compared to those with no changes made1. As the cost of labour continues to rise in Ontario due to increases in the minimum wage, labour productivity is more important than ever.
Staff are also now more willing to make career changes and are interested in working for companies that keep up to date on technology. The cost of replacing skilled labour in a market with labour shortages can quickly become higher than the cost of keeping open and up to date on emerging technology trends. Leveraging the knowledge of staff who are comfortable with technology and its rapid rate of change can improve your chances of a successful implementation while also increasing the engagement of your staff.
Leveraging Lessons Learned
As with any new investment, there is always risk in investing when the benefits of a technology have not yet been measured and proven in the field. If your risk appetite is low, you may want to wait until a few companies have tried out the technology and have seen promising results before investing. Being a “fast follower” allows you to benefit from others working out the kinks while not waiting so long that you are left behind and no longer able to compete. As your success often depends on winning bids, you cannot afford to allow technology advances to drive down the bids of your key competitors.
“Understanding how past technologies improved productivity can be used as a predictor of how future technologies might do the same1.” Based on this, a predictive model can be used to give an estimate of the future benefit that may be achieved from technology upgrades and investments. There is a four-stage model that can be used which includes review of the strategic economic analysis, technical feasibility, technology usage issues, and technology impact. Therefore, before making any new investments, you should consult your trusted advisors to get the most well-rounded assessment on how you can leverage technology to improve productivity in your business.
By leveraging your tech-savvy staff, the advice and experience of your trusted advisors, and the early success of industry first adopters, you can reduce the risk of a failed technology investment. Taking time to weigh the pros, cons, costs and future benefits of a change, as well as properly planning its implementation is important, as long as that time is not at the expense of your competitive advantage.
- Construction Industry Institute. (2006-2008). Leveraging Technology to Improve Construction Productivity. Retrieved from https://www.construction-institute.org/resources/knowledgebase/knowledge-areas/construction-technology/topics/rt-240