What Are the Challenges Facing the Construction Industry?
According to the latest UN projections, the global population is predicted to hit 9.7 billion in 2050, which means the need for construction labour has never been greater. Yet, while labour productivity has increased 100% in other trades, the past 50 years has seen the construction industry’s labour productivity remain stagnant.
Why Are Productivity Levels So Low?
So, why are productivity levels so low in construction? Well, major challenges include the delivery capacities to cater for the high demand, and the capabilities to achieve delivery with quality and timely completion of projects, in order to avoid cost escalation.
Financial risks arise due to factors such as rising costs of raw material and labour, and project margins being tight. Managing labour workforce, material and equipment productively is therefore a very important aspect for construction companies.
In order to succeed, construction business owners must:
- Deploy a robust planning tool to enable rapid and reliable financial forecasting and gain deeper insight into the business performance of their construction projects to help increase business agility.
- Reduce month-end financial closing time and enable simultaneous closings across all sites to enhance the ability of managers to evaluate risks and make better decisions for construction projects.
Thankfully, this is where technological developments lend a helping hand…
Investing in EPM Software
With new technological opportunities to address challenges, such as shrinking profit margins and stagnant productivity, construction companies can take advantage of emerging technologies to help stay ahead of the competition.
Digitisation of the construction industry is beginning to change the way in which businesses operate, with Enterprise Performance Management (EPM) software providing efficient functionalities such as profitability analysis, project forecasting, and workforce planning. Such services mean construction companies can gain the financial support they need by instantly evaluating the monetary impact of changes in key business drivers, such as fluctuating labour and material costs.
Oracle Planning and Budgeting Cloud Service
Implementing a Cloud based EPM solution, such as Oracle Planning and Budgeting Cloud Service (PBCS) can help avoid the juggling of multiple spreadsheets and the vast opportunity for manual error, while speeding up business processes and helping to simplify them.
Oracle PBCS has many key benefits and features that the construction industry can leverage, these include;
- A centralised system where everyone can work together more effectively within an online workspace, meaning staff can keep current on project performance, whether on-site or at the office.
- Fast adoption with no capital infrastructure or investment required
- A first rate planning and forecasting functionality that connects operational assumptions to financial outcomes
- Flexible deployment to simplify technology choices and meet changing business needs
- The benefit of built-in tools and the option to build planning models using existing excel worksheets, helping to accelerate implementation time
World-Class Planning with the Simplicity of the Cloud
The beauty of using EPM software with Cloud technology are the many opportunities it presents by enabling quick adoption of a planning and budgeting solution with no infrastructure investments, practically no learning curve and adaptable deployment options.
So, if you’re looking to drive reliable outcomes and improve margins significantly, a cloud based planning system is a great solution, helping to solve many of the challenges found in the construction industry.