How an Effective Data Strategy Can Support Construction Companies During a Recession

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Working in construction requires careful planning, solid strategy, and expert execution. Being able to track finite details around a building site and use that information to make informed choices is a cornerstone of successful construction companies.

The construction industry has relied heavily on data analysis, even before the digitization of information. It provides a robust framework that allows CEOs and CFOs to make informed decisions and identify key industry trends

With a potential recession looming, we’ll be exploring how a strong data strategy can help construction companies improve efficiency, mitigate risk, and identify areas for growth.   

A Trend of Reluctance – Why Hesitant Digital Adoption Is a Bad Idea

construction crew member uploading project management data

It’s no secret that many construction companies are reluctant to adopt a digital data strategy, instead relying on more traditional methods of data analysis. This hesitation is not without reason, as many construction executives think the switch will be too costly.

In reality, this conclusion couldn’t be further from the truth. A robust digital data strategy provides significant advantages over a more traditional approach, such as:

  • Cost Savings: The ability to properly analyze data from past projects offers incredible opportunities to evaluate past trends, and project management elements, to better optimize future projects and create consistent and reliable cost-saving opportunities.

  • Risk Management: With the proper data in front of leadership, the business is better equipped to identify potential risks and take steps to mitigate them. For example, data can help to track material and labor costs, enabling a business to better manage its budgets and avoid project cost overruns.

While these aren’t the only benefits, these two in particular highlight why the failure to adopt a data strategy is counter-productive to optimized business operations.

What Are The Elements of a Successful Data Strategy? 

data scientist using their mobile app to review strategy

Implementing a digital data analytics strategy is no small feat. It requires a complete move towards paperless operations, technology to log and store that data, as well as specialized software tools to analyze the data in a meaningful and productive capacity.  This means almost every facet of how your construction business operates will be affected. Change management strategies are critical to ensure there is buy-in and adoption. 

Business process mapping workshops and opportunities for observation are very powerful tools to utilize while approaching your data strategy, because it may also require new roles to be included in your business’s overall workflow. Data analysts will be required to help make sense of the wealth of information, and form important connections between data points to provide avenues to act on that data throughout the entire organization.

How a Data Strategy Can Guide Construction Companies Through a Recession

ceo speaking with their team about finances

What’s great about starting now is, you may already have the tools, which will lower the overall cost of implementing your data strategy.  Starting with a simple data strategy assessment, you will likely identify areas where your data strategy is already in some phases of execution.  You are also likely to already find that you have the tools needed in place, they just may need optimizing.

If implemented correctly, an effective data strategy can help to track industry trends, the overall financial health of your company, and more.

Recessions require all businesses to think strategically about their costs, investments, priorities and new business pipelines. A robust data strategy will enable you to tackle that financial reality, primarily in two key areas:

  • Improved Decision-Making: Having access to accurate and real-time data allows companies to make informed decisions, such as how to allocate resources and which projects to pursue.  Visibility is key to being able to see what it is that can be changed.

  • Identifying New Opportunities: With a proper data strategy, companies can better evaluate the market as a whole, identifying new market opportunities and focusing on areas that have a high demand for construction.

Both of these points, combined with the cost savings and risk management improvements, provide construction companies with keener insights into their business that will play a pivotal role throughout an economic downturn.

How to Get Started

Implementing a data strategy can be difficult however, the benefits far outweigh any short-term growing pains that a business may incur.

The ability to make informed decisions, identify new opportunities throughout the market, effectively manage risk within your operations, and cut costs through in-depth project analysis, are all facets of an incredible capability that can help construction companies navigate a difficult economic downturn.

Contact Hartman Executive Advisors to learn more about developing an effective data strategy to drive and enable your business today and in the future.

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