Harnessing Business Intelligence in the Construction Industry
As the construction sector evolves, integrating business intelligence (BI) into operational processes is no longer a luxury but a necessity. The term data analytics can seem broad and confusing, but applying the practice in construction can pave the way for actionable insights.
This article explores essentials of embedding information within construction business processes, the hurdles to effective data utilization, and the path toward a data-driven culture that can enhance project outcomes.
The Imperative of Embedding Information
Embedding information into business processes makes data an integral part of every activity within an organization.
Data-driven insights can significantly improve decision-making and reduce risks in areas such as procurement, project and resource management, pre-construction analysis, and strategic planning.
For example, delays in processing change orders or project overruns that aren’t reported or well understood compared to original estimates can have a detrimental impact on project timelines and or budgets.
By integrating timely and accurate data on change order timing, deviations from budgets and procurement processes, construction firms can make informed decisions that positively affect project costs and schedules.
Benefits to of Becoming a Data-Driven Company
Utilizing data analytics can help businesses enhance decision-making by harnessing the full potential of data assets.
Key benefits may include the following.
Informed Decision-Making
BI can give insights to paint a clearer picture of your construction business, projects, and spending.
Tailored dashboards and reports can be created to see information in real time to help management make proactive data-based decisions to move the business forward.
Enhanced Performance
Real time BI can give breakdowns of all aspects of a project from portions complete to progress towards completion.
This allows contractors to assess performance and delivery, and the most effective software systems or integration provides early warning for cost overruns plus the ability to reforecast timelines and budgets.
Time Savings
Time savings can come from actions such as centralizing data or automating a dashboard to provide a consolidated source of facts. When done right, this task can be removed from front-line employees and management teams, allowing them to focus on their true professional expertise and utilize their time effectively.
Once they have easy access to reliable and actionable data, team members can form deeper insights almost immediately.
Competitive Advantage
Contractors can enhance efficiency with data-based decisions. Boosting organizational efficiency by replacing outdated and time-consuming processes with lean construction practices.
When leveraged strategically, BI tools can help manage costs, reduce risk factors, compare projects, improve staffing and scheduling, and potentially increase profitability.
Contractors can use this information to set their strategies for the years ahead and position themselves effectively in the market.
Challenges to Data Integration in Construction
Despite the clear benefits, many construction firms struggle to integrate data into their operations. The obstacles are varied:
- Uncertainty on where to begin. Many organizations are overwhelmed by the prospect of starting a data project.
- Analysis paralysis. Initiatives often stall as companies get bogged down in excessive planning or by creating too many dashboards.
- Cost concerns. The perceived high costs of technology investments can deter firms from pursuing BI initiatives.
- Lack of technical expertise. A shortage of staff with the necessary technology skills can be a significant barrier.
- Data cleanliness. When data doesn't reconcile across systems, trust in the information is eroded.
- Cultural challenges. Building a culture that values data-driven decision-making can be a daunting task for many organizations.
Tactical Approach to Data Initiatives in Construction
The journey toward effective data use in construction doesn't have to be overwhelming. Starting with a clear understanding of the business problems that need solving can guide the data collection and analysis efforts.
Engaging IT departments to build and manage data infrastructure is crucial, but for businesses with limited IT resources, the focus should be on delivering quick wins that demonstrate the value of data insights.
For those without in-house capabilities, partnering with external providers or leveraging pre-built solutions can help accelerate this process. Establishing governance over data is also critical. This may sound bureaucratic, but setting standards, practices, and ownership for data use within an organization lays the foundation for a strong data culture.
Six Stages of Data Analytics Integration and Utilization
- Outline your objectives
- Assess current state and data requirements
- Understand data analytics solutions
- Identify your team
- Leverage data governance
- Engage with data to recognize and stay ahead of trends
Information Use Cases in Construction
To effectively leverage BI, construction firms must engage in rigorous reporting and governance practices.
This includes identifying relevant data for stakeholders, designing systems for efficient data collection and analysis, and ensuring the accuracy of estimates, project billing, and scheduling. Regular reporting on project status, cost, and progress is vital to keeping appropriate parties within the organization informed and engaged with the data and metrics.
Furthermore, a governance framework that outlines stakeholder collaboration, decision-making processes, and monitoring provisions is essential for maintaining oversight of construction programs.
For example, if budget overruns aren’t reported to appropriate stakeholders, potential recoveries for change events may not be timely identified and submitted for reimbursement.
Moving Toward a Data-Driven Future
The path to embedding BI in the construction industry starts with simplicity. Focusing on key business questions and tying data projects to business outcomes can unlock significant value.
Governance structures are necessary to establish trust in data, and a few quick wins can help build momentum and credibility within an organization.
Large-scale technology investments aren’t always required to gain insightful results from data.
Consultants can help construction businesses navigate data analytics and business intelligence by identifying the analytics solutions available based on the company’s needs, guiding the process of data collection and analysis, and helping implement effective data governance practices.
We’re Here to Help
To learn more about how BI and data analytics can enhance your construction company’s processes, reach out to your Moss Adams professional.