Benefits and Challenges of Technology Adoption for Construction Owners

Unpacking the Risks, Rewards, Roadblocks and Added Value of Adopting Technology Solutions Today

Read Part 1 of this white paper series: The State of Digital Transformation for Construction Owners.

Large owner organizations (those generating a minimum of $100M in annual construction revenue) are increasingly deploying a wide range of construction technology solutions to digitally enable their key project processes. In partnership with Dodge Construction Network, an industry-leading source of information across the commercial construction ecosystem, Avicado surveyed over 100 large owners to get a read on the state of digital transformation today.

In this white paper we’ll unpack what owners are really saying about their experience with construction technology so far, what’s working best, and whether they feel they’re achieving the full potential value available from their technology. Using data, we’ll also take a closer look at the myriad challenges owners face that limit their ability to optimize that value, focusing on four categories: organizational, technology-related, data-related and business value-related.

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Table of Contents

Level of Value Reported by Owners

From the four statements shown in the chart to the right, owners were asked to select the one that best describes the degree to which their organization is optimizing (i.e. receiving the potentially available value from) its technology. 

Nearly 60% of the owners who use PMIS technology for some or all of the eight processes studied reported “high” or “very high” value from technology.

The eight processes we looked at in the study were:

  1. Portfolio/Project Planning
  2. Cost/Budget Management
  3. Contract/PO Management
  4. Document Management
  5. Bid Management
  6. Reporting/Performance Analysis
  7. Scheduling
  8. Close Out/Handover 

Top Benefits of Technology Solutions, According to Owners

We asked owners to identify the degree to which they believe their use of technology has contributed directly to various types of project improvements.

Here’s where owners reported the biggest benefits:

  1. Completing projects within budget
  2. Maintaining project quality (i.e. not sacrificing quality due to schedule and/or budget problems)
  3. Staying on schedule
  4. User satisfaction with completed projects
  5. Reducing unplanned changes/rework during construction

Notably, when it comes to building owners versus civil owners, more of the building owners reported “high” or “very high” improvements using a PMIS (an average of 70%) compared to the civil owners (who reported an average of 50%). This indicates an urgent need to boost the civil sector’s overall experience with their construction technology, especially in light of the ambitious infrastructure investment currently underway across the U.S. 

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How Owners Are Achieving the Highest Value From Their Technology

Though owners have clearly made great strides when it comes to adopting technology and reaping its many benefits, only 13% said they are currently achieving “very high” value and fully optimizing their construction technology investments.

We wanted to know more about this group of over-achievers, so we asked them: What are the biggest factors contributing to the “very high” level of value you’re gaining from your technology solutions? The following factors were cited by 50% or more of them:

  1. We have dedicated IT resources focused on optimizing technology for our company.
  2. We use outside technology consultants.
  3. We receive good vendor support.
  4. We make the technology part of standardized company processes.
  5. We have a well-developed process for adopting, piloting and implementing construction technology.

Additional factors did play a role in owners achieving “very high” levels of value from their technology solutions, though to a lesser degree. The following factors were cited by less than 50% of the owners:

  1. We invest in adequate training.
  2. We have an adequate budget.
  3. We have a well-developed process for assessing technology needs and comparing them to available technology solutions.
  4. We develop a business plan for every technology adoption.
  5. We have senior management buy-in re: the strategic importance of technology.
  6. We have extensive integrations between solutions.

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Key Takeaway: Owners Who Deploy Technology for More of Their Key Processes Report Better Outcomes

Remember those eight key business processes we talked about earlier? As it turns out, the more processes owners digitize, the better the overall outcome. In other words, the more engaged organizations are with their technologies, the more benefits they’ll see and the more value they’ll gain.

The chart above breaks down the five main benefits of adopting technology in a different way. Here, the findings are divided by the degree of technology engagement. Four of the five benefit categories show better outcomes among owners who are more deeply engaged with construction technology (i.e. use it for five or more of the eight processes studied). From this view, it’s reasonable to expect that owners’ outcomes will improve as they progress on their digital journeys by managing more key processes with technology solutions. 

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Top Challenges of Technology Solutions, According to Owners

Organizational

A lack of senior management support and poor technology implementation are the top organizational challenges owners face in their adoption of construction technology, with nearly 50% of owners identifying each as a challenging factor. A lack of qualified users is the next most troublesome (around 35% identified this challenge). Encouragingly, user resistance is the least problematic challenge in this category (around 20%).

Technology Solution-Related

Interoperability is a common theme here. The most frequent challenge in this category is a lack of flexibility in current solutions (cited by nearly 40% of owners). This is a strong message to technology providers about the need for improved functionality.

Owners also clearly struggle with integration between solutions and accessing data that gets “locked” in them (more than 35% cited these as challenges). Owner demand for technology is clear since the need for more solutions is frequently designated as a top challenge in this category (around 35%).

Fortunately, less than 40% of owners are currently experiencing any one of these challenges, and only about a quarter cite a lack of available solutions or the complexity of their current solutions as issues.

Data-Related

Incomplete data is the most serious challenge in this category, cited by more than 40% of owners. Five of the seven challenges studied here relate to data quality (i.e., accuracy, completeness, consistency across projects, fragmentation and timeliness). Incomplete data is both the most frequent and the most challenging of them all.

Of note, data completeness correlates strongly with company size, since over half (53%) of smaller organizations (less than 500 employees) report it compared to only 21% of larger ones. About a third cite difficulty exchanging data with other team members, which aligns with our technology-related findings. 

Business Value-Related

Insufficient integration (nearly 40%) and analytical capabilities (around 35%) impact the business value of technology. Four of the seven factors in this category relate to poor integration –  (with facility management, capital management, other non-capital asset-related internal departments and the labor required for double data entry when working with any other system that is not integrated).

Three ways in which current technology is insufficient for effective analysis (process improvement insights, historical comparisons and portfolio management) round out this category. All of these need to be improved to gain more senior management support for technology, identified as the top organizational challenge. 

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Key Takeaway: The Challenges of Civil Owners Versus Building Owners 

Though both sectors touch on common themes, civil owners and building owners have different pain points and priorities when it comes to the benefits and challenges of technology adoption.

Civil owners struggle most with a lack of flexibility in their current solutions, a challenge that does not rank among the top for building owners. This may suggest that many of the current solutions were created for use on building projects and are difficult to modify for civil work.

Or perhaps there is greater variation among civil owners in how they manage their projects, thereby requiring unique customizations for each organization or even the different projects one organization is working on. That activity would quickly surface any shortcomings in a solution’s inherent flexibility.

Building owners, for their part, seem to be asking for more and better internal processes for implementing their technologies. Better integration with other organizational functions is also a high priority for building owners versus civil owners, supporting previous findings that building owners are further along in their digital transformations and seeking out more nuanced solutions. 

Both sectors rank “Lack of senior management support for technology” as a top challenge. Ultimately, our survey suggests that owners would benefit most by driving engagement with more technology solutions across their business processes, as well as fostering a better-supported, digital-forward culture. 

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