Construction companies still spend around a fifth of their time on rework, according to fresh research from Procore. Find out why technology holds the key to cutting costs and delivering trustworthy buildings.
Procore’s second annual How We Build Now report benchmarks technological advancements and business practices throughout Australia’s construction businesses.
Independent research company ACA Research interviewed 260 small, medium and large businesses to gather insights and ideas about technology adoption and process improvement.
This report also sheds light on the impact of the COVID-19 pandemic on the industry.
At the beginning of 2020, 69 per cent of construction businesses were confident about industry conditions. Just two months later, this had dropped to 43 per cent.
Businesses are responding by cutting costs – an alarming proposition in an industry operating on the slimmest of margins.
Procore’s report finds the average time spent on rework across the industry is 18 per cent – up a percentage point in just a year. Large companies spend 22 per cent of their time on work already completed. This rework adds significant cost pressure to raw materials and labour.
According to Matthew Rayment, chief operating officer of residential builder PBS Building, “rework continues to impact businesses of all sizes – and rework is closely linked with building quality”.
Rayment was part of an illuminating online panel discussion, hosted by Procore, which unpacked How We Build Now’s findings in June.
Joining Rayment was NSW Building Commissioner David Chandler OAM, who said the biggest issue in construction today was the “trustworthiness” of buildings. Since being appointed to the role in September 2019, Chandler has been on a mission to improve the quality of construction and restore trust in the industry.
He argued that technology – notably blockchain and artificial intelligence – could play an important role in building assurance. Blockchain could provide an “immutable source of truth” for everything from foundations to fittings. AI, then, could identify the most trustworthy “players” in the market and the “combinations” that delivered the most predictably trustworthy buildings, Chandler said.
Technology also played a central role in “communication, consultation and coordination to ensure we don’t have to go back and fix defects,” Rayment added.
Construction firms estimate they could reduce project costs by 12 per cent if data was more efficiently captured, according to How We Build Now. A massive 22 per cent of firms still use paper-based site activity records, for example.
Data helps make better business decisions that “have financial, quality and safety impacts,” Rayment explained.
Forty per cent of respondents nominated ‘increased productivity’ as the biggest benefit of better data management. Other benefits included improved knowledge management and decision making, increased regulatory compliance and enhanced safety, as well as reduced costs.
“Data is one piece of the puzzle but it's not useful unless you act on the insights,” observed panellist Sara Cecchi, business improvement manager at fitout and interior specialist SHAPE Australia. Cecchi’s team had used data on hazard observations to help specific trades develop new practices on site with immediate, positive impacts on health and safety, Cecchi said.
Procore’s report also found that 73 per cent of large businesses want a federated set of building standards to improve quality in the Australian construction industry. But any ambition that Australia would achieve national consistency is unlikely any time soon, Chandler argued. Greater alignment between jurisdictions could occur when “we show people the alternatives, walk the talk and earn engagement”.
Technology can help to foster that engagement, but businesses continue to find implementation “extremely challenging,” according to Procore’s report.
But the panellists’ messages were clear. PBS Building was able to ride the waves of COVID-19 because its “technology stack” was in place, Rayment said. Shape was in a similar position, Cecchi added, but COVID had certainly been a “stress test” for construction companies.
Large construction operations in particular are now planning to double down on technological investment post-pandemic, and over one third are viewing the crisis as an opportunity to update or refine their technology platforms and practices.
As SHAPE’s Cecchi said: “If the appetite [for technology investment] wasn't there before, it definitely is now.”
Read more insights in Procore’s second annual How We Build Now report.