Bulldozing Technology Adoption Barriers: How Construction Companies Can Thrive Amidst Volatility

The construction industry is experiencing an era of labor shortages, continued supply chain issues (particularly with some electrical equipment), contractor backlogs, and industry experts project little or no overall growth in the sector for the next two years, according to the most recent year-end report from CBRE. However, Deloitte reports that some industries, such as manufacturing, transportation infrastructure, and clean energy infrastructure, could see growth due to recent legislation. In this economic climate, many U.S. construction companies are examining their resources and practices to determine how they can grow and meet the challenges ahead.

How can your construction business reach the next level?

 Experts have identified several primary areas of focus for construction companies that are eager for growth:

• Improved communication, including better methods of tracking conversations about projects
• Winning more business by demonstrating greater value or expertise than the competition, which helps win more bids and more business throughout the year
• Retaining and developing employees amidst persistent labor shortages 
• Technology innovation, the often necessary but overlooked key factor that can help address the areas above 

What barriers might be keeping your construction company from adopting new technology?

Once you understand the features your teams need in a modern Enterprise Resource Planning (ERP) system, you should address common questions such as:

• What are the costs of not implementing new technology to our business in the coming years?
• Does the new ERP we are interested in powerful enough and flexible enough for our current and future needs?
• Is the new ERP compatible with our existing tech stack?

These questions themselves, however, aren’t often the actual barriers that keep your company from adopting new technology. The common barriers amongst construction companies for new technology are often financial, cultural, and technically related.

“When choosing a new ERP, be sure to interview not just the financial team, but everyone who will be using the system—from shipping and receiving to sales and marketing.”

Financial Barriers

Initial Costs: Quite possibly the biggest barrier when it comes to new technology is the initial cost. While you may not need to purchase additional hardware, the monthly fees, implementation, and short-term strain can be a big concern for smaller companies. But for all those concerns about resources, many studies show that technology is often the biggest factor for small and mid-sized businesses to stay competitive, and even compete with larger more established companies.

Budget Constraints: Many businesses operate with tight budgets and have limited financial flexibility. This is particularly true for small businesses or those in industries facing economic pressures. Budget constraints can limit a company’s ability to handle the ongoing costs of investing in new technology.

Uncertain ROI: When making any investment for your business, how can you guarantee that the investment will show tangible benefits? There are few guarantees in business, but investing in technology and your people has been a tried-and-true successful formula for decades. More importantly, having unified cloud ERP solutions has shown to have substantial ROI compared to other alternatives.

Cultural Barriers

Resistance to Change: Sometimes it’s human nature, sometimes there are other dynamics going on, but regardless of the circumstances, many businesses run into resistance from their staff when they try to introduce a new tool. Many teams feel as if they may already be at capacity or learning a new tool doesn’t make sense in their current workflow. But the benefits of a modern ERP far outweigh any resistance in the long-term both in efficiency, ROI, and collaboration.

Lack of Leadership Support: It can be easy for business leaders to see a problem (i.e., their tech stack) and want to apply a quick solution. Too often leadership may want a new technology that will benefit their business, but it’s not just about the tool or the problem that can cause barriers, it’s the lack of support through the entire process of implementing new technology. Teams need more than an edict to adapt to a new system, they need support and context as to why the new technology will benefit them as well in the long run.

Fear of Disruption: There is no doubt some comfort in the status quo if a company is operating efficiently. But sadly, many companies are not working efficiently and there are many aspects of a business that leadership may be blind to—and therefore these issues are not being addressed. Concerns over increased workloads, learning curves, change in communication, and fear of the unknown are valid and should be addressed internally. However, one constant in business is change, and the companies that choose to stay where they are often multiply their problems or become outdated very quickly out of fear.

Technical Barriers

Business Operations Complexities: Many businesses have intricate and unique operational processes that have been developed over years or even decades. Introducing new technology into these established processes can be challenging and disruptive. One factor to consider is that business operations are always being developed. By providing your teams with custom solutions and communicating with those across the organization, you can overcome these complexities.

Lack of Technical Expertise: For many businesses, it can be rare to have the necessary in-house technical expertise to evaluate, implement, and maintain new technology. This can create a dependency on external consultants and service providers. Successful implementations don’t necessarily need a very tech savvy employee group, but having a champion of the product and implementation has shown to net positive results.

Compatibility Issues: New technology often needs to be integrated with existing systems and infrastructure. Compatibility issues can arise, making it difficult to achieve seamless integration. This is the reason why older systems that do not seamlessly integrate with a single source of truth make reporting and data sharing much more cumbersome without a modern cloud ERP.

The benefits of a modern ERP

Not only is your ERP the heart of business operations for many construction companies, it’s also the one application most of your team will use to perform daily tasks, communicate, analyze and share data, and much more. If your company is looking for increased productivity and accuracy from an ERP, then it’s time to create a list of must-haves for a platform. Below are common requirements mentioned by customers as they explore how a modern ERP can help them meet their business goals.

• Increased flexibility and scalability
• Features for all departments in one solution, which can help increase collaboration between departments such as Accounting, Finance, HR, Inventory, Project Management, Customer Service, Transportation, Purchasing, and Sales
• Fully remote software, including mobile device access and capabilities, that can be accessed anywhere by remote working teams
• Seamless integration with other software
• Robust project management and job costing capabilities, so you don’t need another construction project management tool

When choosing a new construction ERP software, be sure to interview not just the financial team, but everyone who will be using the system—from shipping and receiving to sales and marketing. Together, your teams can determine the features and functions that are necessary, those that would be nice to have, and those that will be required in the near future.

A modern construction ERP implementation success story

HOJ Innovations is a multifaceted organization that has seven facilities in Utah and Idaho with approximately 200 employees. When they needed to replace their older, heavily customized ERP, they engaged Net at Work to help them handle the implementation of a modern construction ERP. 

After investigating multiple ERPs, HOJ Innovations chose Acumatica for its robust, cloud-based platform, extensive core functionality, and ability to be customized for the company’s unique and varied requirements. (Few ERP applications, for example, include functionality as diverse as customer relationship management, project management, and field services. This allowed them to bring their entire diverse operation under one digital roof.)

Acumatica’s broad functionality is proving to be an ideal foundation for the company’s current and future needs. HOJ Innovations’ improvements so far include:

• Reduced monthly close time by 50%
• Increased order to cash cycle by more than two weeks
• Rapid ROI expected from timesaving efficiencies, reduced licensing and development costs
• Customization capabilities allow the business to adapt to changes

The process of identifying current pain points, inefficiencies, or manual processes that could be automated can be both challenging and frustrating. But modern construction ERP solutions can help your construction company thrive by streamlining tasks and reports, automating processes, and connecting your business units like never before.