Digital Transformation and the Construction Industry: Combating Challenges and Realizing Benefits

This article is part of series focused on the benefits, challenges and impact of digital transformation on the construction industry and how companies can embrace change.

Today, we live in a world where nearly every step of the construction process can be supported by digital technology. Dodge Construction Network (Dodge) conducted a survey with 537 specialty trade contractors based on three key issues impacting their businesses: profitability, workforce, and technology.  

While it may it seem obvious, the survey respondents concluded that both workforce and technology had a direct correlation to profitability, specifically, trouble with either may typically lead to lower margin jobs.  A few specific factors leading to this low profit margin include the lack of skilled labor available (i.e., labor shortage), overtime required to meet deadlines leading to excess costs, and labor productivity, planning and allocation challenges.  

The global construction industry is facing a well-known critical shortage of skilled workers that impacts specialty contractor’s projects and corresponding financial performance.

Per the Dodge survey 41% of specialty contractors report that more than half of their projects are being negatively impacted by labor issues. The main elements of the projects impacted are the ability to respond to future bids, project costs, and project delays. One strategy to counter the negative impacts of labor issues for small to medium construction companies is to invest in technology to improve productivity.

One example provided within the Dodge survey related to technology aiding the billing and collection processes.  The survey stated that the average collection time for trade contractors is 48 days from the billing date.  

One of the main factors contributing to delays included incorrect or slow data entry.  Each invoice requires standardized billing forms, supporting documentation, and appropriate approvals.  If any information is missing or inaccurate it will cause a delay due to the payment being re-routed through the billing workflow.  

By investing in technology and automation to improve the accuracy of data moving throughout the organization, this will optimize workflows, allowing companies to reduce the administrative time spent invoicing, while also potentially decreasing the time between billing and cash collection for invoiced work. 

Benefits include improved cash flow, better visibility for cash management, and earlier identification of unpaid invoices (which could indicate a dispute or potential legal matter).

Owners can play a pivotal role in the construction industry to encourage better digital connections between players.  The Dodge survey stated 54% of owners have a high or very high engagement with technology that enables integrated digital workflows.

Some stated benefits of owners having a high engagement with integrated software solutions included increased efficiency of internal processes, better informed decision making, improved quality, improved cost predictability, improved ability to predict and mitigate risk, and reductions in change orders throughout the contract.

While there are certainly benefits to be gained through the use of digital workflows and technology, it’s necessary to consider the challenges related to the implementation and adoption of such technologies.

If you have any questions on how digital transformation may benefit your organization, please contact our team at [email protected] or visit

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About Schneider Downs Digital Transformation

The Schneider Downs Digital Transformation team leverages technological innovations and our business expertise to develop strategic transformative solutions that drive business process improvement for organizations of all sizes.

To learn more, visit our dedicated Digital Transformation page.

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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

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