Recent shifts in the economic and environmental landscape have posed significant risks to commercial builders. According to the IHS Markit PEG Engineering and Construction Cost Index (ECCI) report, construction costs reached an all-time high in March 2022. As commercial builders navigate a steady rise in labor and material costs as well as delays driven by continued supply-chain issues, they need to consider ways to innovate their operations, add value to their projects and reduce costs where possible.

For many commercial builders, reducing costs starts by acknowledging common risk exposures, flooding and fire threats, workers’ compensation claims and damage related to catastrophic events in certain areas where construction is booming, such as Florida, Texas and California. Left unnoticed, an electrical fire or burst water pipe could result in a several-million-dollar claim. "Internet of Things" devices, robotics, drones and more can help assess and report risk exposures related to a building in realtime, minimizing property damage and time lost on a project.

When considering innovative technology solutions, commercial builders should examine the following ways those solutions can lower the costs of a project:

Timely responses: Property damage presents an array of costs, including insurance claims and project delays. As mentioned above, damage to a property can quickly become a multimillion-dollar expense if the issue is not quickly identified and addressed. To address this, commercial builders can now install sensors throughout their jobsites to detect irregularities and notify personnel of problems such as water pipe issues, fires, vandalism and more.

Although the upfront costs of technology may not be insignificant, investments here can help ensure any damage to a construction site is contained and limited. To help incentivize the use of such technologies, some companies are looking toward more cost-effective solutions. Insight Risk, for example, offers a water damage solution at no cost to the builder to mitigate this risk exposure and demonstrate the value of such technology. In addition to mechanical and structural monitoring, Internet of Things devices can also assist with workplace safety by reporting falls, unsafe machinery practices and more, ensuring any injuries are limited and measures are taken to reduce safety threats.

Increased efficiency: Before project management software became available, construction companies manually managed documents, ordering, cost calculations and more. With the creation of project management software, companies can streamline these processes, in some cases automatically, and allocate their valuable time elsewhere. As software becomes more intuitive and more companies adopt it, project managers can work in a remote structure, increasing efficiencies across multiple projects. As stated in the HUB International 2022 Outlook on the construction industry: “[T]echnology stands to improve the industry’s productivity as much as 60%, delivering as much as $1.6 trillion annually in incremental value.”

Long-term solutions: Much of the technology used in construction also collects and stores data, which is a vital tool for not only short-term efficiency but proof of value in the long term. With years of data spanning several projects, a construction company can turn previous guesswork into data-backed science that clarifies worker productivity, equipment longevity and what risks they and their workers are exposed to. Armed with this nuanced data, builders can not only better manage workers and schedules but also plan for equipment repairs and replacements. At the same time, they can work with their insurer to implement risk-mitigation strategies that can help them secure lower insurance premiums—a major cost center for many builders. Additionally, having a wide range of data will help prove value to prospective clients with tangible evidence.

Builders are fast adopting Internet of Things devices and other technologies out of necessity. Even those who have been historically hesitant to embrace technology will soon find themselves with a choice to make. Investing in the right technology will be key to securing future work. What might seem like a costly nice-to-have today will likely become a competitive must-have in the near future—an advantage resulting in exponential savings as builders look for smart and meaningful ways to reduce costs.