New research from IFS, the leading technology provider of enterprise cloud and Industrial AI software, reveals that productivity issues not only impact the bottom line but hold construction and engineering businesses back from true digital transformation.
The study, surveying 825 global construction and engineering leaders, shows that astonishingly almost half (41%) of all construction and engineering projects overrun on both budgets and target completion dates. With most (54%) projects also failing to meet anticipated margins.
When asked how many software systems they use to manage their business and projects, respondents on average use nine separate software systems, hinting that unnecessarily complicated tech stacks are a critical fault in project and business efficiency.
Indeed, when asked what they were looking for with their next enterprise resource planning (ERP) system, respondents praised flexibility over all other choices, stating that they were looking to adopt software solutions that enable them to add and remove capabilities as their business evolves. Most respondents (63%) were also looking to upgrade their solution within the next two years.
Digging deeper into what’s motivating respondents to search for new ERP systems, the most common reason given for re-evaluating their current system is the need for improved agility to better grow and diversify their business (25%).
This aligns directly with respondents' long- and short-term initiatives, 39% see business growth and market value as the most important long-term priority. A further 30% rate improving digital maturity and leveraging data more effectively as immediate priorities for their business.
With governments around the world set to embark on ambitious large-scale construction projects in an effort to modernise public infrastructure, the future is bright for the construction and engineering sector. However, to meet the demands of tomorrow the industry must adapt today.
Industrialised construction and engineering sees more of the work done off-site, with digital transformation unlocking standardised processes that deliver more profitable projects in less time. Flattening out the peaks and troughs historically seen in construction and engineering by offering other services such as service, rental, and maintenance management. This opens the industry to entirely new revenue streams.
“The construction and engineering sector is in a unique position. As an industry, it’s historically been very resistant to change. Now that this inexorability impacts the bottom line, the writing is on the wall for legacy tools and processes.” said Kenny Ingram, Vice President, Construction & Engineering at IFS. “In the research, construction and engineering businesses themselves state that delivering projects quickly (35%) and on budget (35%) are the most important competitive differentiators. It’s very apparent that without the right tools and processes, they’ll fall behind in the market. There is a huge opportunity for this sector to leverage Industrial AI within their operations as they take essential and overdue steps to modernise their technology stack.”
“At IFS, we pride ourselves on delivering more than technology, we deliver impact. The construction and engineering sector tends to have a wait-and-see approach to technology, wanting someone else to take the jump first before implementing it themselves. This leaves a critical element out of the decision—strategy. Construction and engineering leaders who are more digitally mature than their competitors will have an advantage, but it’s not just about having the right tools. Knowing how to implement them, how to use them, and how to get the most out of the data that flows throughout your business will be the deciding factors. That’s how we help our clients become leaders in their field.”
