Digital transformation: the key to long-term survival

We’re still a very paper-based industry: McKinsey ranks construction third from bottom in terms of digitisation, so we are ripe for change. But we are a sector of 300,000 businesses, 99% of which are SMEs in supply chains averaging four to five levels deep – convincing the market to change therefore requires greater effort, more time and prolonged investment.

The construction industry is operating with margins of 2-3% at best, so some companies risk losing an entire year’s worth of profits on just one bad job. It’s a tough, cash-strapped operating environment.

In a flat economy, one of the best ways to increase profitability is to review your internal processes and ask: “Can we centralise, digitise and automate these?”

Don’t look at it in terms of having to go and buy a software module; instead, view it as making an investment that will enhance your business. Digitisation provides a means of protecting the cash in an organisation, by introducing economies of scale and cost-efficiencies. Whether you’re a client, a Tier 1 supplier or an SME subcontractor, the important thing is to take those vital first steps towards digitisation.

Back in 2003, I joined a team of solicitors. I said to my new boss: “Can we get rid of all the books? They are just a comfort blanket.” We were regularly purchasing the latest volume of a legal tome that cost £450 each time and effectively was out of date as soon as it had been printed. Back then I was the next generation and didn’t intend to stay more than 24 months in the job, but being given the freedom to innovate and transform empowered me and engendered the loyalty to stay.

We stopped purchasing traditional books and took out a digital subscription to a multi-faceted searchable knowledge portal instead. It was a cheaper, static cost that meant we could always rely on the information being up-to-date and never mislaid. As blind people, we engineer solutions to problems as part of daily life – my business case for digital within the wider team was therefore based on the selfish need to access the inaccessible.

Although it was obvious why I would welcome the new digital approach, the wider team also saw immediate efficiencies because it gave them instant access to higher amounts of reliable, realtime, accurate information from which to draw their expertise and productivity, and from which I had previously been excluded.

It was a similar story in my last organisation. Back in 2015 they finally replaced the person whose job it was to administer the manual holiday record system in one location. The costs associated with that task dropped from a circa £30,000 human cost to a £3,000 annual software subscription to an online HR management system that covered multiple locations. It was a small step on the journey towards digital transformation, but a very important one in terms of advocating digital transformation to our community.

Digitisation isn’t all about reducing headcount, though. It’s also about freeing people from mundane and often frustrating, manual tasks, so that they can focus instead on more productive activities instead, which in turn can boost job satisfaction and wellbeing. 

And that’s something worth bearing in mind. Let’s face it, an environment that wouldn’t allow me the tools to succeed and fulfil my ambition was never going to be able to keep me. And the same is true of today’s talented, diverse, tech-savvy young professionals – they will expect a certain level of inclusion and digitisation wherever they work. We take it for granted that they will just come in and fill the slots, but if we fail to digitise our processes, they will turn and walk away from the construction sector.