Business Intelligence can improve strategic decisions, enhance operational processes and assist in optimising the supply chain, which are major wins for construction companies looking for a competitive edge. With the right data available, construction firms can make smarter decisions that help drive efficiencies and productivity whilst ensuring compliance is met. The practice of using this data consistently within an organisation inspires change, and increases efficiencies, and eradicates hurdles.
To successfully implement Business Intelligence within construction, businesses must have two things: software, like an ERP system, and valid data. Without the right data or no data, Business Intelligence won’t work and construction firms won’t be able to reap the benefits. From cost control to subcontractor management to overheads and safety, Business Intelligence can be used to make informed decisions within every aspect of construction.
What is Business Intelligence in Construction?
Business Intelligence is the process of collating, harvesting and analysing data to make key decisions within a construction project as well as internal changes within a construction business. Essentially, it uses important data to make intelligent business decisions.
For firms to harness the power of Business Intelligence they need access to the right data at the right time and from a reliable database with good quality data. Business Intelligence can’t be implemented if no relevant data exists.
With Business Intelligence increasing in demand by 41%, construction companies are more eager than ever to harness its benefits to make smarter decisions within a project. That’s where full project management systems, with dashboard reporting, such as ERP systems, come in. In fact, good software, like an ERP system, is vital for Business Intelligence. After all, it can offer the following things for construction firms:
- data visibility through dashboard reporting
- a way to keep data in a single source of truth
- storage of relevant and reliable data in a central location
- a system to standardise data, making it easier to compare
- data automation and collection
- data reporting and predictive analysis
Unfortunately, only 8% of engineering and construction firms utilise these systems to their advantage, meaning around 92% are missing out on vital opportunities.
Construction companies can reap significant benefits from Business Intelligence practices. Some of these include:
- Cost control: companies can use Business Intelligence to track and analyse project costs and identify areas where costs can be saved.
- Safety: construction firms can track and analyse safety data using Business Intelligence to help identify potential risks or hazards and to inform safety improvement plans.
- Subcontractor management: construction businesses can track and analyse subcontractor performance whilst measuring potential problems they may face, such as licence or insurance expiration.
How Does Business Intelligence Work in Construction?
As a concept, Business Intelligence combines data with software, enabling construction companies to make smarter choices in the way they work. It’s worth noting that Business Intelligence can only work with the following elements in place:
- Data in construction that is relevant and can be measured
- Business analytics and accompanying software
- Data mining with clear metrics for measurement
- Data visualisation, such as graphics, reports or charts
- Data tools and infrastructure, including databases that nurture data
- Data best practices, such as monitoring data health
Business Intelligence can help firms achieve their goals. It can also assist construction firms in establishing new objectives, such as working towards Net Zero targets as efficiently as possible. Business Intelligence gives firms the advantage of making informed decisions based on data and facts. Done right, it could see firms viably competing for more high-profile projects.
Gather Raw Data
Business Intelligence relies on data to work. Therefore, if data isn’t available or can’t be collected, construction firms won’t be able to tap into it to make informed decisions. As a first rule, construction businesses need to ensure there are ways to measure business activity, KPIs and other performance targets before they attempt to collect the data. This data should also serve a purpose, such as meeting business objectives or understanding a project’s performance.
Process, Interpret and Store the Data
Once raw data has been gathered, it needs to be processed in a way that makes it readable and presentable. Processed data might look like a graph, stored in a document or presented as a pie chart, for example. This enables the data to be interpreted by computers and software so it can be analysed. What’s more, other users and stakeholders can access the data in a readable format, allowing them to analyse, filter and understand the data that’s been collected.
Data analysis is one of the most crucial aspects of Business Intelligence. Without it, firms can’t decipher their next steps or key decisions that must be made to meet their goals and business objectives. Many companies now refer to this as big data, or smart data, which is changing how business is done across all industries. For example, construction firms and other industries have seen better strategic decisions being made as well as greater control over operations thanks to Business Intelligence.
Determine Next Steps
Business Intelligence empowers construction firms to decide their next steps based on the data they have collected and harvested. This is where many construction companies can maintain a competitive edge within their industry. Big data can help inform strategies, such as potential opportunities for increased revenue or improved operational efficiencies. These insights prove invaluable and enable construction firms to remain viable competition for rivals.
What Are the Benefits of Business Intelligence?
Done right, Business Intelligence yields significant benefits for construction firms, especially those who can take the data they’ve collated to make smarter business decisions. With a single source of truth to house relevant data, ways to nurture data quality and opportunities for dashboard reporting, ERP systems allow businesses to exploit the benefits Business Intelligence offers.
With the Building Safety Act and Net Zero targets in full swing, every decision construction firms must make will require hard evidence and data to back them up. As compliance is a huge factor for construction firms to consider, every decision is likely to be scrutinised to ensure it meets industry regulations. Where Net Zero targets are concerned, firms that fail to demonstrate compliance with sustainability objectives may also miss out on high-profile government projects worth more than £5 million p/a.
As Business Intelligence involves using data to make smarter decisions, this data can easily be utilised for compliance purposes. For example, under the Building Safety Act, construction firms must document all decisions and changes made in line with the Golden Thread requirements. An ERP system enables compliance targets to be tracked but also acts as a single source of truth.
Assists Strategic Planning
Around 69% of businesses using big data claim that Business Intelligence enables better strategic decisions. Within the construction industry, this can range from risk management in the supply chain to suitable subcontractors on the next build. By using data in this way, firms can even predict potential risks that could occur on a project, taking steps to mitigate these. For example, subcontractor data enables firms to track performance, costings, overheads and even insurance expiration dates. As such, construction companies can avoid using contractors with insurance that’s about to expire and can select those with exceptional performance instead.
Informs Future KPIs
As KPIs are a method for measuring performance, Business Intelligence can inform what future KPIs should look like with actionable insight. Not only can they help construction firms understand their particular pain points, but they also help companies see what’s working well and where future investment may be required. This enables firms to keep achieving and progressing, rather than hitting the same targets each year. Where sustainability targets are concerned, it also helps construction businesses to measure how they’re performing towards Net Zero goals.
With an ERP system to support your Business Intelligence process, you’ll benefit from a single database that enables your organisation a holistic view of relevant information. Immediately, stakeholders have access to the information they need to make informed decisions and identify any missed or new opportunities. Likewise, data collected can also help solve issues around productivity and efficiency.
With ample data to measure and various indicators to track, construction companies can use Business Intelligence to establish certain benchmarks. As well as understanding how their competitors are performing, construction firms can compare their performance figures against direct market competition.
What’s more, construction businesses are also able to set benchmarks based on previous targets. For example, firms can compare historical data with current, real-time data to set meaningful targets for their organisation.
Need an ERP System to Help Deliver Business Intelligence at Your Construction Company?
Construction firms that want to harness the power of Business Intelligence will need an ERP system, like RedSky’s, to help guide them. An ERP system ensures construction companies can work from a single source of truth, presenting data in a visually appealing and readable format.
A Business Analytics module only enhances the data collection, analysis and visualisation process. Users can access the information they need at the touch of a button, viewing all data in a formatted dashboard-style.
What’s more, using software like RedSky’s ERP system eradicates any data silos and enables automation to occur, particularly around data entry and reporting. If you’re interested in the benefits Business Intelligence can offer your construction firm, request a demo today.