The Slow Digital Wave in Construction
The construction industry is slowly embracing digital technologies like artificial intelligence (AI), Building Information Modeling (BIM), and digital twins. These technologies help create safer job sites, faster workflows, and seamless collaboration. Large, multinational Engineering, Procurement, and Construction (EPC) firms are leading the charge, but smaller firms are lagging behind.
The Reality for Small Construction Firms
Despite making up most of the U.S. construction labor force, small construction firms are slow to adopt new technologies. For example, 63% of home builders and two-thirds of specialty trade contractors generate less than $1 million in annual revenue. Only 15% of construction firms have more than 1,000 employees. Small EPCs remain at a disadvantage without embracing digital tools, missing out on key growth opportunities. According to the KPMG CIO Survey 2020, digital leaders outperform competitors by 12% in operational efficiency, 14% in customer experience, and 11% in employee experience.
Challenges in Tech Adoption for Small EPCs
Lack of IT Support
Small contractors often lack in-house tech and IT support. More than half of U.S. contractors spend less than 2% of corporate revenue on IT. Without IT staff, installing, running, and maintaining new digital tools becomes a challenge. The absence of internal advocates for new technologies makes their implementation even harder.
Cost Concerns
The high cost of new technologies deters small businesses, which typically operate on thin margins. The construction industry's bidding structure incentivizes keeping costs low, relying on familiar, cheaper options when proposing new projects.
Human Nature
Most small EPCs have operated on the same analog systems for years. Change is difficult, and leadership is unlikely to overhaul systems without an immediate need. They prefer sticking to tried-and-true methods, even if outdated.
Opportunities for Tech Adoption Among Small EPCs
Digital Deliverables
Clients increasingly request digital deliverables such as design drawings, proposals, and project reports. The energy industry, for instance, is rapidly going digital, requiring contractors to keep up. Small EPCs can benefit by adopting digital tools to meet client demands and improve workflow efficiency.
Scaled-Down Solutions
Affordable, easy-to-install, and easy-to-use scaled-down digital solutions can help small EPCs transition to digital workflows. These solutions do not require extensive training or in-house IT support. Anyone can launch these solutions, making digital transformation accessible to all.
Awareness and Education
The industry needs better awareness and education about available technologies. Small contractors must take the initiative to discover solutions that will help them remain competitive. Educational efforts can bridge the knowledge gap, enabling small EPCs to stay competitive.
Conclusion
Digitalization levels the playing field for both large and small firms. Small construction firms must adopt advanced technologies to keep clients happy, improve workflows, and maintain their competitive edge. The right digital tools can transform small EPCs, ensuring they remain relevant in the fast-paced construction industry.
