Every new year brings resolutions, predictions, and anticipation of what lies ahead. Last year was a strong year for construction. The industry saw the largest increase in construction starts since the economic downturn. Companies began exploring how to grow with an unbalanced project opportunity and labor load. More work means more profit in 2017, right?
Not necessarily. Recently, a small subcontractor shared their experience with a one-year growth in revenues of five million dollars but saw their margins fall 17%. More work, more revenue, more headaches, and less profit. Speaking with contractors you will hear stories of unprecedented growth and backlogs following 2016. One constant for the high-growth, high-profit companies is the use of technology.
The subcontractor who shared their growth and the growth’s impact on their margins grew largely in an uncontrolled manner. Construction companies can help control growth using technology. This is evident in the focus on getting their bid accepted, at the right number, without errors, outlined by the 2016 Construction Technology Adoption survey.
The sample size was 1,600 construction professionals. The survey results showed more than 50 percent attributed revenue growth and profitability to software technology. When asked about which key business factors were improved by construction software, 74 percent ranked “minimizing errors and rework” as very important. “Increasing estimating production” was second most important at 73 percent, and “increasing the bid/win ratio” was the third most important business improvement at 70.6 percent.
Pre-construction cost estimating is one of the most important functions of a company’s profitability growth, and it is one of the easiest processes to apply technology. It’s predicted that 2017 is going to provide opportunities to bid more, perhaps it’s time to ensure your company has the correct tools to outperform the competition. Find out where your company stands in technology adoption and discover how you can make this year your greatest year yet.
Download the full report here.
