The Wall Street Journal recently published an article that highlighted the lack on IT spending within the construction industry, something we’ve seen in our ten plus years providing technology solutions for the construction industry. Some takeaways from the article include:
- The number of U.S. construction firms spending 1% or less of annual sales on IT grew to 70% last year, from 45% in 2015.
- When it comes to technology the construction industry under-spends other industries by averages “upwards of 60% to 70%.”
- Many construction firms are still using outdated paper-based processes.
This falls in-line with what we’ve seen as well. Additionally, we’ve observed that:
- Many construction firms are understaffed completely or devoid of any IT staff at all.
- There is a general lack of knowledge of what solutions are available.
- IT is often not considered added value to business models.
- Existing staff are resistant to change.
- IT spending is often only allocated in response to emergencies.
For many construction companies, when it comes to IT spending the approach has often been a reactive one. We are often contacted by clients when an urgent need arises, some are often dire. Interestingly enough most companies are actually aware of the issues, however, they don’t have a clear strategy for addressing them.
We believe construction firms can gain a competitive advantage by being more proactive when it comes to information technology spending, especially when there is a general reluctance among the competition to make the investment invest in IT. Companies should view this as a strategic investment, budgeting for tools and staff based on the company’s long-term goals.
What tools, technologies, and processes do you need in place to achieve these goals? Determining an appropriate IT budget should be centered around your answering these questions.