Three critical factors for successful digital transformation in construction

Construction is sometimes thought of as a traditional industry that doesn’t need technology — just grit and hard work. But grit and hard work are no longer enough now that the industry is increasingly turning towards tech, despite the stereotype, with many firms undertaking digital transformation to unlock new capabilities and efficiencies. And it’s having a profound effect: a 2023 report by RICS found that 62% of respondents who have already adopted technology say that digitalisation has driven improvements in cost estimation, prediction, planning and control.

Adopting digital technologies can help firms to be more efficient and profitable, as well as enhance their productivity. These are some of the many good reasons to embark on a digital transformation journey, but that doesn’t mean it’s easy. McKinsey research shows that a staggering 72% of transformations fail, with the top two reasons for failure cited as resistance from employees (39%) and lack of management support for the change (33%).

With this in mind, let’s look at three critical factors that can make or break your digital transformation journey.

1. Understanding the problem

The more specific you can be about the problem at hand and the desired outcomes of adopting a tech solution, the better. For example, a company experiencing slow communication between site and office can tackle that problem with technology that speeds up communication through messaging tools. A construction firm that experiences wasted money through rework can target this expenditure with technology that allows everyone to access the most accurate, up-to-date information so they can avoid mistakes caused by misinformation or outdated documents.

For better outcomes, first identify the areas that are holding your business back and interrogate every aspect of the problem so you can understand it. Then begin to brainstorm and research potential solutions. For transformations to work, there needs to be a clear strategy everyone can align behind.

2. A strong change management function

As noted in the McKinsey report, which highlighted that a lack of effective change management contributed to a third of transformation failures, it’s important to establish a clear change management function to see through the process of transformation. That means identifying change champions who are the guardians of transformation and are committed to seeing it succeed.

Boston Consulting Group recommends that businesses should “clarify unit leaders’ roles in the transformation and start to equip those leaders for the journey to come”. You need to identify who your change champions are at the start of the process. But it’s just as important that you continually upskill them so they can adapt with the business.

Once you’ve identified your stakeholders and change champions, an effective communication strategy is a key part of change management. Being able to clearly communicate the intentions, process and technology underpinning your transformation helps everyone to understand how things are changing and how it will affect their day-to-day work. This includes delivering important information and documentation to all necessary parties in a timely manner, and in a way that is accessible and engaging.

Another essential requirement for successful change management is measurement. Creating a structured change management process, with feedback mechanisms and metrics that you can track, will help to add clarity and momentum to your transformation effort. Construction technology can help you to gather this data in a central location so it’s easier to track, and even add timestamps for clarity around timelines. This data can then flow into analytics tools, such as Power BI dashboards, to help you to get more insights and make data-driven decisions.

3. A focus on your people

Your people are the biggest factor in whether a transformation is successful or not. As previously highlighted, employees can be resistant to change, which can make things difficult when you want to roll out new technology as part of a transformation. Since these are the people who will be using the new technology, it’s critical that you get (and keep) them onboard throughout the transformation process. One way that companies can approach this is to match people with differing levels of change or technology appetite, for example matching a change sceptic with a change enthusiast, or digital natives with late adopters. Together, teams of people who think differently can often help each other see the technology from new angles and reach a common understanding.

Find meaningful ways to ensure adoption, such as skills-based training, education and offering incentives, maybe competition prizes or other rewards. Communication is another significant factor here: maintaining strong lines of communication between teams, the board and the change management function will help to ensure that all parties are on the same page and that any feedback or issues are discussed, addressed and resolved. Input from those on the front line should never be dismissed, even if it’s negative — all feedback is useful here.

Transforming construction for a profitable future

Transformation can be complex, and even intimidating, but it doesn’t need to be an insurmountable hurdle. Get these three areas of focus right, and you’ll set yourself up to make transformation your solution, not another challenge.

Once you’ve adopted the right tech, you can benefit from increased productivity. Respondents to a Procore survey reported that using the Procore platform enables their project teams to manage 48% more construction volume per person.

Are you thinking about digitally transforming your business? Get Procore’s Construction Management Software Buyers Guide for detailed, step-by-step guidance to help you make informed software choices.