Valued at over 11 trillion U.S. dollars in 2020, the construction industry is a massive global sector that is expected to continue to grow. Despite its importance and scale, the construction industry has lagged behind other sectors in terms of technology adoption. While many industries have embraced automation, artificial intelligence, and other cutting-edge technologies, construction has remained largely reliant on traditional methods and manual labor. However, the industry is slowly but surely transforming thanks to forward-looking leaders like Kevin Morris, Vice President of Finance at JBPA Developments in Ottawa.
In his role with JBPA, Morris is a “finance guy” who is helping lead the charge for all builders to work more effectively and adopt technology intelligently in the face of daunting expectations for the future of construction.
Here are 4 questions and answers from a recent podcast appearance that spell out how any construction business leader can lead the technology charge in their organization effectively and productively.
How has digital transformation affected the way that construction work gets done?
I will just pick-on Ottawa. Ottawa is the fourth largest construction market in the world. We have massive projects going on here worth billions of dollars. For a tiny city of a million people, you're spending billions of dollars on construction. You need to find things to do differently.
In that as well, most people doing the work in terms of skilled trades are 55-plus, and they're retiring out fast. If you took just the stats of how much work there is coming for Ontario and how many people are retiring, the trades would need 70,000 more people to do that work. The other scary stat is that every five people that retire from the trades have only been replaced by one person. So, with all this work and with fewer and fewer people doing it, the only answer unfortunately, besides prices going up, which they have, is you have to become far more efficient doing it.
Construction is a great industry of people that work hard and do the right thing. And it's very complex. I don't think a lot of people in or outside of the industry think of it as a complex. But it's got a lot of complexity around it in terms of construction methods, safety requirements, codes, design elements, all these things. And so, it needs that next step of putting in technology to allow people that are in the industry to better use their time, be more efficient, and produce more things with the same amount of time and dollars.
Technology I see has been very basically adopted so far. There's been some very interesting things that have come along. But the industry is in its very early stages of what's possible to really transform the industry to make it something really more exciting to people in it and get those projects built that we need to get built. There's way more needed than we can possibly do today.
What is the biggest piece of advice that you would offer leaders in construction trying to facilitate technology adoption?
I had somebody last week show me their Procore implementation and their standard operating procedures. Procore is the premier software in the construction industry, and this person paid, unfortunately, a lot of money for the adoption. He had standard operating procedures, and he asked, “What do you think of this, Kevin? I'm feeling really frustrated.” I read it over, and it's 200 pages and is a great document. But I said to him, “Your fundamental business processes aren't even captured in this.” So, it's a great document. He spent a lot of money, but it's not going to take away work from his folks. All they got is a manual on how to put stuff in, and how to use Excel smarter.
Well, that's not what the technology is there for. You invested in the technology to have a consistent project management, a process, a consistent construction process, and a consistent way of closing all projects. Well, your team and the people you hired didn't spend the time doing that. So, you've invested a lot of money, but unfortunately, the tool is not going to give you the reward you need because they didn't look at the right thing.
And I don't think it's easy to blame somebody for not doing that work. But again, I think that's new to our businesses. We need to start with what's the business process we're going to put in place? How do we use technology, move it forward, and then make sure it happens?
Then I think to people outside of the construction industry, that's second nature. But for us in our business, it's not. So, I spent all this money on this software, it doesn't solve all my problems. Well, software doesn't solve the problems, it helps facilitate the process. We've got to back up and say, what do we really do? How do we use the system? And then how to make sure it works? Because it's easy to put in place and be done.
For construction leaders rolling out the basics of new technology adoption, what are the steps you would recommend they take from the jump?
I would say get your hardhat out and your work boots on and go spend time with the site super, who's overseeing your construction site or project. He or she knows everything about what causes delays, waste, risk, and if you can put in a tool or technologies that help identify or reduce those. That's the first step.
So, for us a safe workplace is number one. Our Procore system has a safety inspection tool. We had one before, and we compared them and we tested them. We went, ‘the Procore tool is very, very good, but the one we had is even better.’ It's even easier and takes away the dumb work from people on site. We said, we're going to keep using that safety tool, and we're going to make an integration into Procore. That's always been the decision.
I think that's the right thing to say. Is it easier for the guys to use this tool? Yes. Then, let's use that. Can it integrate through? Yes. Okay. Us in the back end—the finance guys and systems guys—make the integration work, rather than trying to find a tool and work things around.
The other thing I would say is if you're going to put a technology in place, and for a finance guy it's hard for me to say, we come second. IT system guys and finance guys tend to hang together. And finance guys, usually because they write the check for the system, get to determine what happens or not. And unfortunately, I've seen too often in other industries and construction included, where the decision is made to benefit the finance guy and the operations guy has to pay. I wouldn't say it always happens. But we tried very hard, and we continue to try hard. Say if something results in rework or extra work on site, and we could change around with the finance guys doing more work—that's what we're doing instead.
So as an exchange, it's a very, very simple example. We said a project manager shouldn't have to worry about sales tax when they issue a purchase contract. Again, these are operations people, make it say you only had to worry about before tax. We, the finance people, will deal with the taxes and all that stuff later. We'll deal with payments, We'll deal with people that have questions on their invoice. Come talk to us. That's not your job. Make sure that boxes allow them to get all the things they need to build stuff, but then have it sit over here.
So, I think those are the two big things: Understand what this site needs and make sure the system helps them with that.
What do you think construction organizations are focusing on incorrectly when they're trying to adopt new technology?
I think for a lot of construction people, they have run their business for years as it feels right (in their chest). What may feel right here, may not be the biggest payoff to improve your business.
I’ll go back to the gentleman who showed me his Procore. “It doesn't feel right.” Well, what doesn't feel right about it? “Well, it just seems like it takes a lot of time, and they're not getting things done faster.” No doubt. That's the business management. And that comes from 40 years of working on a site and walking around saying this feels like they're not progressing far enough along. I totally respect that. But if you're trying to enhance your business, you have to be able to look at and say what business process here isn't functioning as I expect, or maybe it needs to be done differently.
For the full conversation and more insight from Kevin, check out the podcast: https://www.quickbase.com/age-of-agility