One of the primary reasons experts cite for why construction lags in tech adoption is a lack of robust data collection and analysis. Especially with pandemic-related shutdowns and business uncertainty, contractors need to make informed, data-based decisions.
During a recent webinar sponsored by ProNovos, a construction management and analytics platform, construction and data experts discussed how contractors can get started using analytics on current projects, and how to leverage older project data as well.
Part of what makes individual project data collection so important is that every contractor is going to be in a different situation, pre-, mid- and post-pandemic, said Bruce Orr, chief data scientist for ProNovos.
A contractor can look at a potential project and predict and accurately how much it will cost and how long it will take by looking at similar projects, Orr and the other webinar presenters said. Having an understanding of previous projects’ data is key, because even when a project doesn’t follow what was predicted, having data makes it easier to discover why.
In order to get to predictive analytics, a contractor must first use diagnostic tools, said John Killingsworth, assistant professor at Colorado State University. Diagnostic analytics is the evaluation of simple questions, such as why some jobs are more profitable than others or why some projects take longer to complete, he said.
Having a data czar or using analytic software is important, said Wick Zimmerman, CEO of Outside the Lines, Inc., a California-based specialty contractor. Being able to press a button and see the health of a business based on the correct data collected is far easier than manipulating the data on your own, he said.
Once there is an accurate prediction of how much a project will cost or how long it will take, a contractor can ask the basic “how” question. Orr broke down prescriptive analytics, which he described as his favorite type of analytics, because it takes all data collected and establishes a go-no-go outline for a contractor.
Using data from previous projects and knowledge of project delivery methods, contractors can accurately see how a project would likely turn out with different parameters. What Orr called “a simple model” based on previous work could develop into a reliable resource to ensure a contractor is not taking unnecessary risks.
Graphing revenues and profits
A challenge facing many contractors due to the coronavirus is knowing when to keep employees on the payroll and when to implement layoffs. The calculated decision is relatively easy to see, Killingsworth said. By graphing revenue and profit, along with fixed costs, over time, companies can see how much continuing with a full team would eat into profits and how long that would be sustainable. If a contractor needs to reduce staff to ensure the company can remain afloat, Killingsworth said the basic graph could at least help a firm ensure the smallest number of layoffs to achieve that.
The good news about construction lagging behind in data analytics, according to Bryce Wisan, a partner at CPA firm Eide Bailly, is that it gives contractors the advantage of seeing other industries’ successes and failures, providing construction managers an insight into best practices. Wisan said the “winners” post-pandemic will be contractors that leverage the tsunami of data to help sustain and grow their operations.
Plus, data observation is passive, Zimmerman said. Collecting data and analyzing it is work initially, but having a software or specific worker doing data analysis allows decisionmakers remain informed and make the best choices based on years of information.