6 ways companies should utilize construction analytics
Our world has entered a data-driven era and the construction industry is no exception. While construction professionals have been slower than others to embrace paperless reporting and management, the digital uptake is picking up speed and the benefits of leveraging analytics can no longer be ignored.
From tracking the location of equipment to making multi-million dollar purchasing decisions, the potential for using analytics to inform planning, forecasting and decision-making in the construction industry are limitless.
Let’s take a look at what construction analytics entails, why it’s so useful, and the many ways construction companies throughout the world are using data analytics in their day-to-day operations.
Construction analytics involves tracking, monitoring and reporting on a wide range of performance indicators related to construction projects and business processes. It allows construction companies to uncover and action insights with the goal of improving operational efficiency, safety and profitability.
There is no limit to the type of data a construction company may want to collect and analyze. Some of the most common types of data used include:
Construction analytics, sometimes referred to as construction business intelligence, can be as simple as tracking numbers in spreadsheets or as complicated as a custom-built database that leverages artificial intelligence. Many construction management softwares also have an analytics dashboard and other capabilities built into their solutions to make it easier for companies to analyze and use this data without separate systems or engaging data experts.
There is no one size fits all approach or tool for using analytics in construction—it all depends on the size, budget, existing systems, internal capabilities and desired results.
Data and analytics enable construction companies to gain better insight into their business and specific project performance. By making data-driven decisions, companies can improve their project quality, efficiency and bottom line.
Without construction data analytics, trends are left unidentified, problems materialize when they could have been avoided, and extra time and money are spent on reporting, planning and forecasting. All of these issues cost a company money—and in an industry known for huge chunks of budgets spent on materials and labor, every opportunity to improve efficiency, cut costs and reduce material waste is hugely beneficial and welcomed.
Risk management is also increasingly important in both construction and the business world as a whole. When data is used to inform decision-making, risk management processes will be more effective, ultimately leading to cost-savings and increased safety.
Now that you understand the why of data and analytics in construction, let’s dive into the how. Here are some of the most common ways the construction industry can leverage analytics in their day-to-day operations:
The dynamic nature of construction projects requires close attention to financial management and budget forecasting. Construction data analytics makes it easier to monitor budgets in real-time, easily identify cost overruns, and anticipate cash flow problems before they occur. Empowering project managers with robust and real-time financial data enables more accurate monitoring and forecasting, supporting quicker and better decision making.
A common application of construction analytics in the budget and purchasing process is using the data from equipment usage monitoring to decide the mix of equipment to be purchased versus leased for the future. An analysis of actual usage and downtime in previous projects can reveal which types of equipment justify the capital costs of a purchase and which ones are only used enough to justify leasing them.
Beyond individual project budgets, construction companies can use financial analytics to monitor and forecast overall revenue and profit to guide company-wide decision making such as staffing, future projects to bid on, and strategic priorities. Experience and good judgement will also have their role to play in the decision-making process, however, data can be used to back up these judgements as well as uncover trends and gaps that may have gone unnoticed by the human eye or without a cohesive data analysis platform.
Data has the potential to not only inform better decision making on its own, but across teams as well. The construction industry has always been very paper-driven in its reporting and management, however, the increased adoption of paperless management technologies means information that was traditionally kept in binders and filing cabinets is now stored in the cloud. Stakeholders across a company—as well as contractors and other third-parties—can now have easy access to information that may have literally been out of reach in the past.
When all key stakeholders have access to a wider range of information, this can open up new opportunities for communication and collaboration. It also supports better planning and decision making by being able to draw on more diverse and up-to-date data.
It’s no secret that paper-based progress and safety reporting in the construction sector has its problems: papers go missing, reports get lost in emails or cluttered offices, or subcontractors are behind on filing their paperwork.
Whatever the reason, paper-based reporting is filled with challenges and inefficiencies. It not only slows down the reporting process, but limits its effectiveness by making it more difficult to visualize data and compile information across different sources.
A digital reporting solution means that all reports are easily accessible on an internal network or the cloud. This saves time manually compiling paper data sources, avoids the access problems mentioned above and can avoid human error in the data entry process.
Maximizing labor productivity is a crucial way to keep construction projects on-time and on-budget.
When workers aren’t actively engaged in a task, that costs money that could be spent better elsewhere. On the other hand, overworking employees can lead to overtime costs as well as burnout and increased turnover, and increased safety risks—all avoidable sources of added costs and time.
Data analytics can uncover these scheduling issues, as well as overarching trends in injuries or accident reports to address the root causes of problems before more serious incidents occur.
Beyond diagnosing problems with employee productivity, it can also uncover areas of improvement for efficiency and workflows. For example, if workers are spending a lot of time waiting for materials they need to be delivered, this is a sign that changes in worker scheduling and/or material delivery are needed.
Finding the balance between productivity, safety and worker satisfaction is a win-win situation for everyone involved and construction data analytics can be a useful resource to find this equilibrium.
Numbers don’t lie but people, unfortunately, sometimes do. Dispute resolution is a common and often costly problem for the construction industry.
Data collection can uncover the truth about common disputes such as progress and project status, actual time and costs spent or material usage and quality. The more accurate and comprehensive the available data is, the better it can be used as a source of truth for all parties involved in dispute resolution or eliminate the need for it in the first place.
A robust data solution can enable companies to go beyond simply collecting and analyzing data for prescriptive purposes to leveraging the power of predictive analytics.
Predictive analytics uses historical data to predict the likelihood of future events and outcomes to inform the decision making process, prevent problems before they materialize, and identify opportunities for efficiencies in processes, safety and operations.
The possibilities of data analytics for any construction project are endless. From increased safety and efficiency on-site to better measurement and understanding of capital project outcomes, it’s now or never for the construction industry to embrace digital technologies and bring analytics and data-driven decision making into every level of their work.
Tread can help construction companies embrace the digital age with its construction fleet management software. Request a demo today to get started with paperless reporting, real-time analytics and more.