The following content is sponsored by GCPay.
The use of specialty trade contractors is more important than ever as construction projects become more complex, schedules are tighter than ever, and contractors’ internal resources are stretched increasingly thin.
GCPay recently worked with Dodge Construction Network to discover some insight into understanding how subcontractor management has evolved into a digital, automated process much like other aspects of construction. Over 50 GCs in the commercial construction space participated in the research study and provided the following insights.
Because it is so critical, subcontractor management is a prime candidate for digital transformation to replace traditional manual and paper-based processes with technology solutions that improve efficiency and support better-informed decision-making.
Commercially sold solutions in general, and commercial platforms in particular, are widely deployed for some of these functions, but the findings suggest that their multifunctionality is not being fully utilized. The opportunity is particularly strong for improving accounting and finance processes.
Among the 12 subcontractor management processes included in the study:
- Change Orders
- Applications for Payment
- General Subcontractor Management
- Lien Waivers
- Electronic Payment
- Payment of Subcontractors
- Occupational Safety & Health Administration (OSHA) Compliance
- Subcontractor Documentation
- Tier Vendor Management
- Certificates of Compliance
The six accounting and finance processes less frequently utilize commercial platforms and point solutions than those used for contract management.
In addition, fewer than half of contractors, on average, integrate accounting/finance solutions with other organizational processes.
The top four processes with growth expected in the use of a commercial solution are already among the most established for technology use, suggesting that the benefits of automating these processes are clear. However, the findings also indicate that contractors would benefit from a better understanding of the value of automating some of their other processes, especially OSHA compliance and reporting and tier vendor management, which have the lowest level of automation currently and also fall in the lowest tier for future growth.
Importantly, the findings reveal that the contractors who automate most of these practices are the ones experiencing the largest number of benefits.
GCPay also gained intel on what general contractors are looking to do in the next 12 months regarding digitizing or implementing technology to automate additional construction management processes
The chart below shows which processes contractors, who haven’t already, target for automation over the next 12 months. Insurance validation is still a maturing process, so this planned adoption by 25% of current non-users will make a meaningful impact and would advance this process to the established category. The other four processes are already in the established category. This incremental adoption further reinforces their value and will move them toward near ubiquity across the industry.
General contractors have a unique fraternity and enjoy learning from and helping their peers. This is what encouraged GCPay to initiate a market study so others can learn from what many GC’s are doing, or plan on doing, regarding incorporating technology to help streamline and automate remaining manual processes that still exist. Most areas of construction have evolved with technology, so don’t let subcontractor management remain antiquated. For more detailed intel from this market study, feel free to go to Dodge Construction Network Market Study 2023 | GCPay.