In the construction industry, we’re often thinking about risk and how we can mitigate it. The last two years of the COVID-19 pandemic have propelled ongoing issues into a heightened state, and left many organisations big and small struggling to meet project requirements, secure supplies and pay contractors and subcontractors on time.
At Payapps we’re focused on how we can support people in offices and on the ground to do what they need to do, with minimal risk and maximum benefit. What we’ve come to discover is the power of collaboration between all stakeholders, underpinned by having a single source of truth. For the competitive contractor, digital technology solutions can provide the means to having a single repository of information and enable greater transparency and collaboration between all parties.
It’s fair to say that the pandemic has made existing issues around supply costs, supply chain shortages and the usual challenges associated with building projects much more pressing.
In New South Wales and Victoria, spending in the industry fell almost 20% and employment fell by a combined total of approximately 350,000. (CommBank) When looking at costs, timber, board and joinery rose 3.9% in 2Q21 to be up by 6.4% over the year (ABS via JLL). Electrical equipment also increased 4.4% in 2Q20, while other metal products increased by 4% over the year. Overall, the shutdown of construction in Greater Sydney during the pandemic outbreak and lockdowns impacted more than 250,000 workers and was forecast to cost the NSW economy alone $1.4 billion. (SMH)
Even prior to COVID-19, stats show that 53% of project managers experience underperformance in one or more projects every year, and only 25% of projects were delivered within 10% of the original deadline. (KPMG via BulderSpace) On the upside, the construction industry generates more than $360 billion in revenue, accounting for around 9% of Australia’s Gross Domestic Product, (AISC) and we’re starting to see a resurgence in activity in the sector as lockdowns ease and projects are brought back up to speed.
We know abuilding boom is going to take place in both the residential housing market and larger infrastructure projects right across the country. We also know there will be ongoing challenges as we move into this new phase of growth.
We expect supply chain calendars and resourcing challenges to continue. We also expect that labour and labour costs will increase, due to the fact that there are less skilled workers in the country and ongoing talent shortages due to extended border closures.
Another ongoing challenge that was apparent before COVID-19 is the continued dependence on traditional tools. A lot of operators still rely on the likes of Microsoft Word, handwritten documents and Microsoft Excel. While these tools may have made sense for smaller projects or firms, with the growing complexing and size of projects, and increasing demands from different stakeholders, they just don’t cut it anymore.
Moving forward the organisations and leaders that are able to embrace change and adopt new solutions will be those that establish a competitive edge and ultimately find success even in the face of uncertainty. Those organisations willing to work with all stakeholders, and adopt digital tools to aid this, will be more efficient and successful. Collaboration and software-as-a-service solutions will be game changers in not only improving productivity but reducing risk.
Historically, inaccurate information has led to expensive disputes and increased risk for all parties. To change this, organisations must be willing to invest in solutions that provide a platform for shared information, and engage early to establish the way both builder and subcontractor will work together.
Information and data holds the key to collaboration. From day one there has to be a willingness and a spirit to adopt change and do things differently, but having a single source of truth will go a long way to establish a culture of transparency, trust and collaboration.
At Payapps, we firmly believe in the importance and power of having one one set of data, and that this is established and agreed upon by all parties to utilise for their projects and and programs. This ensures there's nothing hidden, nothing secret and nothing inaccurate being shared between parties.
Excellent digital technologies and tools have been coming to the fore to help support not only the provision but the enablement of this single source of truth. These tools can additionally help with predicting and forecasting costs, and reduce the amount of disputes that could have taken place due to pricing discrepancies. As a result, organisations are able to accelerate the growth of projects and make sure they’re delivered on time.
Our construction industry is facing numerous challenges as well as huge opportunities for growth. Some challenges such as supply chain issues or talent shortages were exacerbated by the pandemic, but some, such as dependence on traditional tools, have been simmering away for years and are now becoming unavoidable.
In this uncertain time collaboration is crucial. Adopting a mindset of growth and understanding that working alongside all stakeholders with shared information and a single source of truth will lead to greater productivity, efficiency and success, as well as reduced risk and disputes. The organisations that are able to adapt and step up to the plate will be rewarded now and into the future.