Cam Rule, the Downtime Assassin, explains how construction businesses are leaving profits on the table by overlooking a key aspect of their business – their IT.
Technology can provide a remarkable return on investment for your construction business.
But to access a good ROI on your IT, you need to address some common mistakes. Ask yourself these two questions…
- Do you currently conduct, or employ a third party provider to carry out, an annual capability and efficiency audit on your IT systems?
- Do you know the precise time when you should update your hardware or software to maximise profits and minimise inefficiencies?
I’ve worked with reputable construction companies that were letting their clients down, missing deadlines and spending big dollars on extra labour due to inefficiencies in their IT systems and hardware. Sure, they were making profits… but they were leaving money on the table.
So how can you use IT to maximise your profits?
Firstly, I recommend that all construction companies look for a technology partner, preferably someone with a construction tech background, to do an annual capability and efficiency audit. I find it always leads to HUGE ROI through reducing daily business inefficiencies. Well-oiled IT systems also improve the customer experience, and happy customers are more likely to lead to repeat work, or even referrals.
A current client of mine is a great example of this. He owns a Civil and Commercial Construction business. He’s been at it for 30 years and has constructed some impressive buildings in regional Australia. However, his knowledge of IT was minimal – after all, he is a builder at heart and IT was not in his wheelhouse.
It was hard to believe he was operating a multi-million-dollar company while still using a paper-based system. This outdated system was costing him tens of thousands of dollars per project and to top it off, he lived with the constant stress that his systems would fail, that he would deliver a project late and he would even be up for liquidated damages. Talk about stress.
My client knew he needed to evolve, but IT change seemed overwhelming. He did have a current contract in place with an IT provider, but they were the “call us if something breaks and we’ll rush over to help” kind of reactive IT provider. Band-Aid solutions will never help you maximise your profit margins.
After reaching out to me, within a matter of days I identified a project management system that would allow for quick adoption and save him tens of thousands per project. I helped take the business from an old school system to an innovative organisation that embraces change. The best part? The new systems were implemented at a fraction of the cost of the extra profits gained. If your provider is not currently carrying out an annual IT capability and efficiency audit, then ask them to right now.
How about computer hardware? Is there a way to get a great ROI on those devices we rely on so heavily? The answer is ridiculously simple. No matter what type of computer, they all share the same statistic.
This is the secret to getting a good ROI on computer hardware: You must replace them every four years.
Of course, computers must suit the role. Salespeople and executives might need an ultralight notebook because they travel so much. Supervisors and others on site will likely use a tablet, as they are walking around all the time. The statistic remains the same, however.
In 2020, Intel did an in depth study and found that the age of the device can greatly impact productivity and the need for IT resources after four years.
After four years using the same computer, people spend up to three days a year waiting for it to boot up or load web pages, which is the tip of the iceberg.
Older computers require more IT support, such as repairs. And of course, employees generally will try to troubleshoot their devices themselves, which impacts productivity.
So, how much will an old computer cost you? At a minimum $2000 per year by just working out how much you pay your employees to be sitting there doing nothing. Add another $1000 for lost productivity due to repairs, and another $500 for extra IT support and repairs. You would be looking at $3500 easily. A reasonable computer would cost about $2000 to replace that old one. It’s a no-brainer, right?
However, many people don’t want to waste money on a new computer until they are completely broken. They don’t realise that every time an old computer is turned on, they are losing money.
To maximise your ROI on computer hardware, replace them every four years. Your return on investment will wane after four years due to more downtime from slowness, more repairs, and more reliance on IT support.
When you choose your IT service provider, make sure they understand the importance of a four-year refresh cycle, so you don’t lose money due to old hardware.
Of course, there are many more ways to profit from your technology in your construction business, these examples are two easy wins with maximum impact.
After all, profits are best in your pocket, not left on the table.