Harnessing the Data Advantage in Engineering and Construction
Recently FMI partnered with Autodesk to survey more than 3,900 industry leaders on how engineering and construction (E&C) companies can gain a competitive advantage by adopting a data strategy. The pressure to deliver projects on time and on budget is being compounded by record global labor shortages, supply chain issues and other constraints. And on top of all of that, companies are grappling with record amounts of data.
All this data is a boon to helping leaders make critical decisions, yet those surveyed indicated that without a formal management strategy using this data poses a significant risk. In the past three years, the volume of project data has doubled, compounding the need for construction companies to quickly formulate ways to manage it.
The consequences of not doing so can be costly. With construction accounting for 13.2% of global gross domestic product of $84.5 trillion, bad data may have cost the construction industry $1.84 trillion in 2020 due to poor decision making. Our study also found that the total cost of bad data for a contractor with $1 billion in annual revenue is $165 million.
Costly Reworks
The pace of making decisions in the field is accelerating, exacerbating the consequences of using bad data. Our calculations found $88.7 billion in rework costs associated with bad data. For a contractor with $1 billion in revenue, that’s $7.1 million in avoidable reworks connected to bad data.
As a result of the dramatic increase in technology adoption, a substantial amount of data is being generated throughout the project lifecycle. Unfortunately, more than 80% of all respondents describe at least 25% of their project data as unusable.
When asked to pinpoint the reason for their data challenges, our survey found that issues tended to be unique to each organization, meaning that having a real strategy for how to manage and implement “big data” is important.
Beyond Technology
It’s not enough to find and implement a technology solution. You need to have the right talent, tools and processes in place and a strategy for managing the change. Big data presents unique challenges for the E&C industry, and many organizations are either unprepared for or overwhelmed by the magnitude of information.
Understanding which data can be useful and how it translates into business intelligence, for example, requires strategic planning and a clear understanding of your organization’s overall goals and vision. Once you have a clear direction of what you want and need from your data, then you can begin to extract meaningful insights to help guide your organization. FMI’s strategy practice can help you develop a cohesive plan that will help you understand your organization’s needs and how you can leverage the data you’re collecting to make better decisions. Putting into place the right training, processes and tools now will set you up for long-term success.
