In a study by the Leibniz Centre for European Economic Research (ZEW) published at the beginning of 2020, more than half of those surveyed said that both the high financial and time costs were the reason why the construction industry was lagging so far behind in terms of digitization. But why are so many construction companies still hesitant to make this effort if it means they may miss out on long-term success? Is too little money and too little time really the problem, or is there perhaps more to it than that? Change is often associated with pleasure or frustration. In most cases, it also has a profound effect on the structure and culture of a company. That's why digitization should not be an end in itself, but a strategic process that involves and enriches all employees equally.
In this article, we reveal why a digitization strategy is worthwhile for your construction company and what you should consider when implementing it.
The list of such questions can be continued endlessly. The important thing is that you never lose sight of your business goals and the well-being of your employees when answering these questions.
WHEN IS DIGITIZATION WORTHWHILE FOR MY CONSTRUCTION COMPANY?
Imagine three scenarios. An employee on the construction site urgently needs information from the office, but cannot get it immediately because he has to travel there first. Employees are sitting in the office in front of a magnetic board and have been planning the use of construction machines for hours, handwritten and in smudgy ink. Next door, the accountant sits in front of a stack of papers on which he manually calculates cost centers in pencil. You don't need to imagine these scenarios because they are commonplace in your company? Then all alarm bells should be ringing.
As soon as you have to spend a lot of time doing your job, the scheduler throws in the towel and the team loses track of everything, you should act. Digital solutions can not only make your employees' lives easier and save you work, but more importantly, save your construction company from going under in an error-ridden paperwork economy. If you don't embrace digital now, the train to the future will eventually leave the station. But with all this knowledge, caution is advised. Don't rush headlong into aimless actionism, which will only lead to more confusion and more work. Approach a digitization strategy thoughtfully by asking yourself the following questions at the outset:
1. Which analog processes could work better digitally?
2. Where could we save time?
3. Where could we reduce costs?
4. Are there already digital solutions on the market that we can build on?
If you need support with your inventory and potential analysis, we are always at your disposal. With FlexcavoOS, we have developed software that allows you to keep digital construction and cost documentation as well as manage your entire fleet and even your construction sites from the comfort of your computer screen. Learn more about our intelligent software solution for digital fleet management here or get advice from one of our friendly employees. We will help you!
WHAT WILL DIGITALIZATION DO FOR ME?
For decades, analog methods and techniques have proven successful for the industry, so many construction companies rest on this success and tend to view change with skepticism. "If things are going well, why change anything?" - a logical conclusion with fatal consequences. Because good does not equal optimal.
Construction companies often have a volume problem: too many orders and too few employees, combined with a lack of IT skills. Many of them simply work through their order books and prefer short-term projects instead of taking time for strategic planning. They are not aware that they are using their machines inefficiently and that they could increase their productivity in other ways. They cling to familiar ways of working with a fixed gaze, doubting digitization and failing to notice that they are running out of time. In the long run, these companies will face high costs. But the Corona crisis should have shaken up even the skeptics in the back row. Ninety-five percent of construction companies that digitized their business processes before the pandemic are generating higher revenues, drawing increasing productivity and coming through the crisis well compared to their peers. Learn more about the digital trends in the construction industry in the pandemic year 2021 and how they help construction companies to become more efficient.
Digitization affects all areas of the construction company, from digital tender documents and digital order processing to mobile data collection, such as working hours or equipment performance. The fact that data should be recorded centrally in the process plays an essential role in ensuring flexibility as well as transparency and security for all parties involved. But when introducing and implementing digitization practices, as with all strategic upheavals, obstacles first arise. These usually affect the core of the company: the employees. Decision-makers often have to do a lot of convincing, because skepticism about new things is only one side of low acceptance. The other is based on a lack of knowledge about digitization and technology. Older employees who have been with the company for a long time are afraid of losing their knowledge. For them, digitization is much more associated with risks than with opportunities.
WHAT ARE THE OBSTACLES TO DIGITIZATION AND HOW CAN I OVERCOME THEM?
It's no secret that most construction companies employ significantly more older people than younger ones. However, older employees are used to manual and analog processes. They perceive a changeover as cumbersome and time-consuming. A lack of IT affinity and the fear of being replaceable are often linked to this attitude. The biggest hurdle in implementing a digitization strategy in your company is therefore not in front of your eyes, but in the minds of those involved.
To help you overcome this hurdle, we present three methods below.
1. CREATE A DIGITAL MINDSET
In plain German, this means something like: "Create an awareness of digitalization". Make your employees aware that digitization is not just about buying more and more hardware, implementing complex software solutions and the glorious rise of the IT department. Digitalization certainly involves costs and effort, but it is first and foremost a management issue in order to be fit for the future.
In order to sensitize your employees to the topic, it is worth highlighting the positive benefits of new hardware and software in particular. For example, explain that no one will have to drive from the construction site to the office in all weathers to rummage through meter-high towers of paper in search of the Holy Grail of the construction project. What's more, no one has to fill out a timesheet on the construction site with dirty fingers and ink or pencil, which is then carried away by the wind at the end of the day. Unpleasant phone calls, long waiting times and the confusing planning on magnetic boards in cramped rooms will then also be a thing of the past.
Once you have convinced your employees and made them willing to change, you can start with the actual implementation of your digitization strategy. In smaller companies, this process is usually faster than in larger ones, since decisions are usually made jointly. In general, however, the size of the company is less important for the success of a digitization strategy than the way you communicate it within the team.
2. INTRODUCE CHANGE AND INNOVATION MANAGEMENT.
Analyze your current situation and define where you want to go with your digitization strategy. Establish a detailed roadmap including key timelines and responsibilities and bring it transparently to your team. The more comprehensible your motives, your planning and the resulting benefits for the team and the company are, the more employees you will be able to inspire. Don't forget to include comprehensive training for your employees so that no one is left behind. Digitization is a permanent, strategic process in which the entire team must actively participate. The readiness for change as well as a continuous exchange between management and employee level must not be neglected at any point.
To ensure that you and your team are not left alone, many companies and associations in the construction industry offer webinars, seminars and events on the topic of digitization. We recommend that you attend these and also share your experiences with other construction companies. We at Flexcavo will also be happy to advise you further if you need support in implementing or realizing your digitization strategy. Contact us here.
3. ENSURE SUSTAINABLE KNOWLEDGE MANAGEMENT.
Every industry is affected by demographic change. This is often associated with a "war of talents", a battle for qualified employees. Even though it is now possible to turn to technology to compensate for the shortage of skilled workers, interpersonal relationships and values remain an important part of corporate culture. Digitization inevitably goes hand in hand with a generational and cultural change. It changes work processes, communication channels and responsibilities. Young, potential employees are usually very tech-savvy and explicitly look for companies that offer them a certain technical standard. In the digital age, in which the generation of digital natives is increasingly entering the labor market, a transfer of knowledge is taking place in most companies. Young and old colleagues learn from each other, because some bring the necessary technical know-how with them, while others have many years of professional experience and skills. If you convince your older employees that their knowledge will not be lost or replaced, but will be passed on to the next generation for a significant purpose, you lay an important building block for a successful digitization strategy.
Digitization brings many benefits to construction companies, particularly increased productivity and efficiency, greater flexibility and transparency, as well as long-term competitive opportunities and future viability. However, many construction companies must first remove obstacles before their digitization strategy bears fruit. First and foremost, this includes the lack of digital know-how in their own team.
With the "Planen-bauen-4.0" initiative and the expansion of a nationwide, high-performance broadband network, the German government wants to drive forward the digitization of the construction industry. More and more ConTech start-ups are also developing innovative solutions for this. In the long term, it is necessary to put the possibilities of an interaction between research, industry and politics into practice. Construction companies that resist or hesitate to embrace change will miss the boat in the medium term. That's why we have made it our mission to help construction companies get started with digitalization with our digital solutions. In our next article, you will learn more about the benefits of a digital fleet management system, the features of FlexcavoOS and how exactly we can assist you along the entire construction equipment lifecycle.
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