Building Data Ecosystems in the Least Digitized Industry

Building Data Ecosystems in the Least Digitized Industry

May 19, 2022

This guest post is from Lucas Marshall, Content Marketing Manager for Milwaukee® Tool.

A seminal 2016 McKinsey article1 placed construction as the 2nd to last digitized industry—behind only agriculture and hunting.

To make matters worse, back then, the authors wrote:

The construction industry […] has yet to adopt an integrated platform that spans project planning, design, construction, operations, and maintenance. Instead, the industry relies on bespoke software tools. In addition, project owners and contractors often use different platforms that do not sync with one another. As a result, there is no single source that provides an integrated, real-time view of project design, cost, and schedule.

Some six years on, the industry faces labor shortages that continue to barricade construction growth while competition for skilled labor is fiercer.

As a 2021 Procore®/IDC survey 2 found, 75% of projects were delivered late, over budget, or both, averaging 69 days late, while costs increased 15% due to changes in budget and schedule.

Construction owners and managers are scrambling to keep projects on schedule with increasingly narrowing access to the talent they need onsite (e.g., 70% of those surveyed reported being affected by trade/labor shortages onsite).

Despite these challenges, technology problems abound, with an estimated 39% of projects “still managed with manual or mostly-manual processes.” What’s more, if predictably, owners surveyed who relied on manual, siloed personal productivity solutions (Excel, SharePoint, Dropbox, local drive document storage, or outdated custom legacy solutions) delivered projects later and over-budget when compared to their peers who used digital solutions with a “focus on integrated software and a connected platform (offering data connectivity, reporting, and trending.” The latter group reported “efficiency and productivity gains that help deliver projects on budget and on time.”

Critically, “integrated” and “connected” are the descriptors that owners need in their vocabularies when speaking about adopting construction processes. There is a need for technology that won’t further silo already overstretched teams; while app usage in the industry has been rapidly increasing, a lack of integration has been reported (a mere 5% surveyed having their apps integrated, for example). And as technologists and proponents of big data will tell you, disjointed data sources can create as many data silos and inefficiencies as the old, paper-based processes of decades past.

If we have learned anything from McKinsey’s seminal 2016 article, it’s that construction has historically been the least digitized industry. While owners, GCs, and tradespeople alike have more recently adopted technology at a faster rate and embraced digitization in some form, new data silos can emerge when bespoke platforms are spun up overnight from different service providers to address every conceivable facet of the industry.

Our duty as an industry is to close the gap, ensuring these digital technologies, intended to empower the construction pros that use them, can meaningfully synchronize company-wide and facilitate cross-functional teams to work better together.

Joining the disjointed: “Digital collaboration and mobility” in action

“Process digitization means moving away from paper and toward online, real-time sharing of information to ensure transparency and collaboration,” the McKinsey authors wrote in 2016.

Requisite to moving online, time has told that successful productivity apps gearing to digitize construction operations should–at the minimum–offer:

    • Cloud-based accessibility and multi-user functionality: Construction teams should be able to access important information whenever and wherever it’s needed (in the back office, in a tool crib, on the jobsite, from a fleet vehicle). Furthermore, instant access to project documentation and real-time edits should be available to anyone on the team that needs it (i.e., no more versioning nightmares!). For software applications, that means a web-based or desktop app and iOS, Android, and tablet-based apps.
    • Regular updates: The agile software methodology means regular updates (not once a year!), ensuring bugs are regularly squashed, and competitive features (value-adds) are consistently introduced.
    • Data & software inoperability: Critical to breaking through data silos is integrating your team’s data producers. We as an industry should strive to use our role as data contributors to create systems of truth (data hubs) that empower cross-functional teams to work better together, whether that means actively seeking out integration partners or introducing pilot programs to help companies connect the dots.

Since 2016, there has been considerable VC activity in contech startups to deliver on digitizing “processes and deliverables” that have long-been manual and paper-based (e.g.,” blueprints, design drawings, procurement and supply-chain orders, equipment logs, daily progress reports, and punch lists”). However, more critical to smooth operations and tethered to the tenet of creating a single source of truth, there has been a serious push in the industry toward integrations. And that’s tremendous news!

Some recent integrations news stories of note:

    • ENR reported the expansion of Autodesk®’s Construction Cloud™ with its integration with the ProEst estimation tool, helping construction teams manage projects more easily from design to bid.
    • Penta Technologies announced an integration with Procore®’s STRUXI product to simplify time-collection processes, reduce paperwork, and facilitate an “ease of data analysis.” They also announced an integration with XOi, a platform that helps HVAC technicians capture on-the-job activity and proof-of-work.
    • Toric AI announced a Procore integration, bringing cutting-edge AI-driven analytics to finance, operation, and document sharing and “finally bringing contractors’ data into predictable data structures.”
    • At Milwaukee® Tool, the ONE-KEY™ digital platform supports integrations with Procore and Autodesk. These integrations reduce manual project-level inputs and sync digital torque wrench installation data into the design files. We at Milwaukee Tool view data and integrations as a vital tenet of how we build our app, fundamental to streamlining jobsite workflows and broadening our industry-wide connected ecosystem.


Internet of Things & advanced analytics

A further discussion point of McKinsey’s 2016 article, imagining construction’s digital future, was the Internet of Things.

They theorized how IoT “would allow construction machinery, equipment, materials, structures, and even framework to ‘talk’ to a central data platform to capture critical performance parameters.” They also pointed out how sensors, near-field-communication devices, and other technologies “can help monitor productivity and reliability of both staff and assets” in several use cases.

For some of these use cases, the industry has seen innovations in recent years:

    • Equipment monitoring and repair. At Milwaukee® Tool, we’ve integrated preventive maintenance features into the One-Key app to allow users to be notified before equipment is due for repair. Furthermore, on compatible smart tools, we’ve engineered machine learning algorithms into our power tools to help prevent dangerous episodes like tool kickback from occurring.
    • Inventory management and ordering. The authors wrote, “Connected systems can forecast and alert site managers when stocks are running short and when orders need to be made. NFC tagging and tracking of materials can also pinpoint their location and movement and help reconcile physical and electronic inventory.” As one of the leading causes of downtime in construction, there are numerous advantages to digitizing a tool inventory. In addition to NFC-equipped tool trackers we’ve introduced recently, One-Key compatible smart tools, with built-in Bluetooth® modules, can be tracked and locked out in theft situations. In fact, in some cases, thieves, thinking these power tools are broken, have sent them to one of our service centers, allowing our team to reunite the tools with their rightful owners!
    • Energy efficiency. Sustainable HVAC systems, like smart thermostats, can adjust the temperature of individual rooms based on whether or not they’re occupied. They can also be programmed to automatically reduce a building’s temperature at certain hours of the day. Such equipped buildings can save between 15 to 23% on energy bills.

Bottom line

Since McKinsey’s seminal 2016 article, dubbed “Imagining Construction’s Digital Future,” there has been an explosion of digital apps helping contractors and construction owners alike streamline the various aspects of their inflight projects.

Handle, for example, as reported in Tech Crunch, has helped construction workers get paid on time, as material suppliers and specialty contractors drive the need for streamlined construction payments and notice management.

The next era of construction’s digital transformation will be in continuing to contribute to the legacy of empowering collaboration by enabling data integrations that facilitate workflow efficiencies and keep everyone on the same page.

Lucas Marshall serves as a Content Marketing Manager for Milwaukee® Tool, where he and his team are responsible for raising awareness about the company’s SaaS platform, ONE-KEY™, and educating its users on inventory best practices through how-to articles, tutorial videos, interactive training materials, and more.

  1. Imagining construction’s digital future. (2016, June 24). McKinsey & Company.
  2. Owners at the leading edge. (n.d.). Procore Construction Management Software.