CARPINTERIA, Calif .– Procore Technologies, Inc., a leading provider of construction management software, announced a new survey by international research firm IDC that found that most construction projects were delivered late and well over budget compared to the owner’s original plan become.
The survey conducted by IDC in May and June 2021 and commissioned by Procore asked about the challenges facing owners and how they responded. The survey also looked at the benefits of moving from manual processes to technology solutions. The attendees were home builders and developers in the public and private sectors in the United States and Canada. You are involved in various roles and responsibilities over the entire life cycle of project execution, from conception and planning before construction to project management, execution and operation.
Most construction projects have exceeded budget and are being delivered late
The survey found that 75% of owners exceeded their project budget and 77% were late. On average, the projects were 70 days late from their original estimates.
Owners experienced an average of six budget changes and five schedule changes per project, with an average increase in project costs of 15% as a result of these changes.
High performers use digital solutions
Most projects are running late, but some respondents do better than others. The survey found significant differences between high performers and high performers based on the discrepancy between the budget estimate and the estimate for the day and project completion time. Better performance on budget and on schedule often corresponded with the introduction of integrated technology. Two groups emerged:
- High achievers: The 17% of respondents who have the least exceeded their budget and estimate for days / completion.
- Low Performer: The 19% of responding organizations that most exceeded their budget and estimate for days / completion.
Underperforming employees struggled with outdated or manual processes in project design, pre-construction planning, change order management, and site incident tracking.
Owners using digital solutions generally deliver projects on budget and on schedule. Owners who rely on manual or isolated productivity solutions (e.g. Excel, SharePoint, Dropbox, document storage on local drives, or outdated custom legacy solutions) tend to deliver their projects late and over budget. To learn more, read the report here.
Performance of technology adoption and integration effects
Most respondents do not use specialized construction software, but rely on the fragmented general productivity software used in many industries and offices (85%). The remaining 15% manage construction projects with integrated software tools. As the construction industry continues the rapid innovation of the past few years, those who adopt integrated industry-specific technology solutions will be able to take advantage of the benefits to move forward while the others are left behind.
Owners recognize the importance of data centralization as a critical building block in supporting new technologies that can help improve performance on time and on budget. The technologies they have identified as priorities for long-term future adoption require support from application and data integration efforts to maximize benefits and results. The main technologies identified as a priority for future adoption were:
- Data centralization technologies (42%)
- Predictive analytics for cost modeling (36%)
- Building Information Modeling (BIM) (32%)
- Digital twin (31%)
- Green building / building (30%)
“The survey shows that project owners can see what needs to be done,” said Warren Shiau, research vice president, IDC. “But if the introduction of these technologies is to be successful, you have to modernize your data, applications and IT infrastructure – otherwise you will not be able to take full advantage of these groundbreaking advantages.”
In terms of budgeting and scheduling, the owners anticipate that the biggest impact on project performance over the next three years will be BIM (53%), connected supply chain (44%), component prefabrication (41%) and predictive analytics for the cost modeling (34%), according to the survey results.
Biggest challenge: Finding skilled workers and workers
Perhaps unsurprisingly, owners found that the biggest challenge in running projects is the on-site labor shortage (69%). Only 24% of respondents said they have good staff with the right skills in financial management, reporting and controls, and only 33% have sufficient staff for planning, design and scoping.
“Trade and labor are an integral part of estimating project schedules and feasibility. So if there is a labor shortage, it has an impact on costs. And the longer it takes to complete a project, the more your costs escalate. For companies without proper processes, these problems are only exacerbated, ”added Shiau.
Owners also saw environmental regulations (66%) and project cost increases (61%) as challenges for their company.
“IDC’s survey is a wake-up call for construction project owners across North America,” said Zachary Reiss-Davis, senior manager, product marketing, Procore. “Missing budgets and deadlines are the norm, and that shouldn’t be the case. The surveyed service providers show that the introduction of digital solutions helps to keep an eye on budgets and schedules. Future success depends on the modernization of the technology infrastructure and the introduction of integrated construction management solutions, which contribute to future-proof operation, alleviate personnel bottlenecks and ensure efficient project management. “
This industry-wide survey included over 505 US (303) and Canadian (202) construction project owners and developers, including private companies, governments, healthcare and educational institutions, and commercial property owners and operators. Over the past 12 months, these owners have completed various types of projects, from capital improvements to industrial projects, including turnarounds, to fundamental developments. The survey, conducted by IDC in May-June 2021, aimed to learn more about the challenges facing owners and how they have responded or plan to respond. The focus was also on changes that are planned or accepted in order to improve processes, workflows and application modernizations, and the benefits that can be achieved in the transition from manual processes to digital approaches.
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