Construction is an industry in disruption. Over the next decade, the industry will digitize, eliminating hundreds of billions in waste and capturing hundreds of billions in new productivity. Margins for surviving companies are expected to more than double.
To do this, the industry must take on some immense worksite execution problems—because worksites are where 80% of project spending occurs. The ripest opportunities include:
Change orders, rework, and wait time
Change orders and rework account for up to 20% of project costs. Wait time is estimated as high as 35% of site labor costs. Because of these issues, cutting the time and improving the quality of change order development and execution, cutting Requests for Information (RFIs), accelerating plan changes, and slashing wait times for inspections, engineering reviews, etc., can make a big difference.
About 40% of invoices are not paid in full. Improving evidence of performance with better organized earned revenue reporting and compliance reporting would give opportunities to slash the 5% litigation and compliance costs, accelerate payments by as much as 30 days, and assure payments.
For most construction companies, solving labor cost challenges could nearly double profitability. How? By eliminating the immense labor costs created by lack of effective feedback, compounded by improperly assigned staff (up to 6% of total labor costs), and multiplied by lack of labor accountability. And, these are only the largest issues.
The market must deliver solutions to contain and eliminate these issues. The IntelliSpeX team sees these issues as being solved through two principle thrusts.
1) Virtual Access
Change orders, rework, engineering reviews, as-built questions, requests for information, and feedback (to carpenters, plumbers, electricians, HVAC technicians, and others) requires access to site personnel. Virtual access would mean that scarce resources among the construction trades can provide answers without visiting the construction site, leaving the construction trailer, or spending precious time of the most valuable engineers and inspectors traveling to the site.
More importantly, virtual access would prevent teams from waiting at the site for these skilled trades to reach the worksite. It’s become a modern joke watching construction workers wait around while one or two do the work. The real damage is when entire teams wait for these skills.
2) Evidence of Performance
We need to provide a record that every stakeholder trusts to work remotely from the site. We have to tag the data, capture every change, and never delete the history with the who, what, when, where, and how. All that information creates irrefutable proof of completed work (Evidence of Performance).
Virtual access that brings skills and decision makers to the site can slash delays at construction sites. We can accelerate project schedules. We can gain positive control of the effort. At the same time, we can eliminate billing inefficiencies and remove distrust from the equation. Labor hours will be factual and not exaggerated. Feedback will be enhanced and quality will rise. Trillions of dollars of waste will be cut, and even larger value gained from productivity enhancements. Work processes will be upended while elevating the industry’s perceived effectiveness to the highest levels seen since the 1960s.