Construction financial executives are increasingly using deep analytics to find new opportunities, evolve their strategies, and develop their company cultures. The most forward-thinking leaders see new narratives forming from this analysis and have found ways to incorporate them into their team management.

Companies that embrace data as a source of decision-making will outlive those that do not.

This article will demonstrate how data technology can help to better manage materials, labor, and supply chain issues, as well as give contractors a clearer picture of what is going well (or poorly) in their projects.

Before Technology

Managing material costs and labor efficiency relies on financial transparency, multiple supplier relationships, and sound long-distance supply chain management practices.

Traditionally, these have been managed through long-held relationships, manager and estimator intuition, multiple Excel files, and good negotiation. However, in today’s data-centric economy, contractors have an opportunity to extract even more savings and profitability from their supply chains.

Utilizing Data Technology

Data technologies such as blockchain, robotic accounting, artificial intelligence (AI), and machine learning can help to analyze large amounts of data at scale in a way that no human could replicate. As a result, estimators can find more savings on materials, controllers can have more accurate predictions of labor hours needed to install them, and CFOs can enjoy a considerable decrease in overhead costs.

Blockchain

Blockchain is not a computer program; similar to generally accepted accounting principles (GAAP) and Hypertext Transfer Protocol (HTTP), it is simply a protocol or a way to store data in a more secure format. This data format makes it easier to comply with accounting standards and best practices, particularly when there are multiple parties involved. Think of blockchain as a set of rules that apply to how data is stored.

This data technology minimizes the miscommunication in construction by creating an immutable ledger where each block represents a specific event or transaction in the construction process. In doing this, it creates transparency in the materials used and produces a living, breathing digital ledger of every material and action performed in a building.

Robotic Accounting & AI

Once that data exists, it’s important to manage and analyze it. Data about your materials and labor lives in everything – from the manufacturer and supplier of the material to its installation. Robotic accounting (i.e., workflow automation) and AI give contractors the tools to capture all of that information.

Automated workflows accomplish two major things: First, they remove double data entry. Employees no longer have to spend all of their time ensuring data is entered within multiple systems, particularly when it comes to processing expense reports, payroll, and job initiation workflows. Second, automated workflows begin to build more seamless data pipelines. As contractors move closer to enabling AI in their companies and projects, it is essential to have flows of data moving into and out of your systems in real time.

With more data being consumed at scale, it becomes too overwhelming for any human to make sense of it. Instead, contractors will be able to start detecting patterns and forming insights using AI. It is then up to leadership to share this data at the right time with the right people. At the end of the day, the goal for AI should be to help contractors make better decisions more quickly.