A summary of Causeway’s presentation at the CIHT Annual Conference 2019…
At the 2019 Annual Conference, our EVP of Contract Solutions, James Atkinson, discussed the full extent of the productivity problem in the construction sector, exploring the significant opportunity digitisation presents for contractors to address this issue on the front line, where profits are truly won or lost.
James opened his presentation by recognising the importance of the construction sector, which represents 13% of the world’s global GDP and employs 7% of the global workforce. While the sector is responsible for building and operating the very structures in which we live and work, and on which we travel, it isn’t without its faults. In fact, the construction industry is fraught with challenges and inefficiencies.
The industry lags behind others, having only experienced a 1% increase in annual productivity growth in 20 years, which has resulted in a total $1.6 trillion productivity gap. Often, the sector’s projects are delivered late and over budget, generating slim profit margins. KPMG’s Global Construction survey outlined that 69% of projects exceeded budget from 2012-2015, and a total of 60% were delivered late; whilst the top UK 100 construction contractors only averaged a pre-tax profit margin of just 1.5%.
Whilst it is clear that the construction industry faces many challenges, the sector is also in a state of flux, as the rise of new technology and innovation disrupts the status quo. A digital revolution is on the horizon, seeing buzzwords such as artificial intelligence, robotics, autonomous vehicles and big data become ubiquitous. In fact, with so much change and disruption in the industry today, the digital revolution is also being coined the fourth industrial revolution, with emerging technologies promising to completely transform the way in which we work. However, despite 93% thinking technology will significantly change their business, KMPG reports that a staggering 52% of organisations are yet to develop a data or technology road map.
At Causeway, experience has taught us that this lack of road mapping is largely due to the difficulty organisations face when trying to navigate the digital space. With so many buzzwords and technological trends in the industry, it can be difficult to know which solutions will have the most meaningful impact on your business. That is why Causeway exists. We are the digital partner for construction, helping organisations navigate this ever-changing, fast-paced, digital space. We specialise in digitising the front line, because this is crucially where your profits are won or lost.
We are currently working with Kier, Eurovia, R&W and many others to digitise their front line, improving productivity and generating significant savings in both time and cost.
1 McKinsey Global Institute Analysis 2 McKinsey Global Institute Analysis 3 KPMG Global Construction Survey 2017 4 The Construction Index, “Construction pre-tax margins average 1.5%”, August 2017 5 KPMG Global Construction Survey 2017