Major capital projects generate an enormous amount of data – tens of thousands of paper documents from dozens of different companies throughout their life cycle. While the information contained in those documents is critical to project success, much of it remains hidden due to an inability to efficiently share the right data with the right people at the right time. Utilizing blockchain-powered smart contracts, however, the construction industry has the ability to transform projects from a document-centered approach that impairs visibility and speed to a data-centered approach that is visible to all stakeholders in real time.

Today’s projects remain heavily dependent on the manual transfer of data and information, much still document-based, between project stakeholders with very little having been digitized (and PDF scans don’t count). Oftentimes, stakeholders have questions about project status, production timeline and budget, but lack easy access to these answers. One organization may have established good visibility into their own data, but they can’t see over or through the other organization’s moats or walls.

Between various tracking and reporting mechanisms used by different team members and the clumsy transfer of information among systems, productivity suffers and valuable data is neither captured nor analyzed. The result is broken handoffs, errors and omissions, extended lead times and unexpected bottlenecks. As these challenges multiply, they create barriers that many projects struggle to overcome.

How can smart contracts help to eliminate these obstacles? Take the example that occurs on just about every construction project today: erecting structural steel.

First, identify the specification for the steel, the status of the design and how much steel (by size and shape) is required based on the drawings. Has the order been placed with the supplier? What is the quantity of material that was ordered and when will it be delivered to the site? There are dozens of questions that come up over the course of the project – questions regarding delivery, invoices, labor crew, tools and equipment, timelines, installation status, inspections and more.

On many projects today, the answers to these questions are not readily available to project stakeholders as they happen. The information is typically captured in one software program by one company (often with manual input) then aggregated, reviewed, corrected and “massaged” before some of it is eventually shared internally or externally through a report. It may be published to a dashboard or emailed as a link or attachment to those that need the information.

For companies in “Excel Hell,” there is a way out. Enterprise project systems that leverage workflow and integrations can improve the timeliness, integrity and value of data capture, analysis and reporting. While they do relieve some pain points within companies, however, they do not address the walls of disparate project systems or the moat of project contracts that most projects cannot overcome. Distributed ledger technology, on the other hand, deployed through project- or asset-based blockchains (facilitated by smart contracts) can automatically capture and report all this information in real time to all project stakeholders.

The steel that moves through this project-driven supply chain is a resource that can be tracked, reported and controlled using blockchains and smart contracts. Blockchains are able to capture where the steel is at any point in time, identify who has care, custody and control, and record the state that the steel is in without the barriers imposed by disparate systems and traditional contracts. The democratization of project data means relevant information is available to all those who need to see it – when they need to see it.

When it comes to incorporating blockchain technology in construction, the results can be transformative – from streamlined materials management and reduced overhead costs to increased forecast accuracy and scenario planning. Benefits accrue up and down the supply chain, from automated status updates, accelerated schedules and just-in-time planning and inventory management to dispute resolution, reduced waste and quality controls.

Smart contracts allow contractors to bridge the data gaps that currently exist in projects of all scopes. The opportunity is there to eliminate clunky and missing data handoffs, creating supply chains that are more effective and efficient. Looking past controlling project documentation and considering the inherent value of the data held by all stakeholders, it becomes clear that a technology enabling the sharing of crucial data in real time is worth serious consideration.