While contractors, including contract glaziers, are still hesitant to use technology to manage risk, technology use is being implemented by many firms, according to the recent report, “Using Technology to Improve Risk Management in Construction,” by Dodge Data & Analytics and Triax Technologies.
Use of Technology to Manage Risk
Contractors also rated the level of engagement their firms have of applying technology for six risk management practices:
- Employee training (59% reporting high/very high levels of engagement);
- Safety incident documentation (47%);
- Job hazard analysis (46%);
- Worker certification (44%);
- Emergency preparedness (35%); and
- Real-time site monitoring (36%).
Approach to Budgeting for New Technology
Implementing new technology can require major investments by contractors. When asked how they approach budgeting for new technology to help mitigate project risk, contractors reported:
- They absorb costs in expectation of long-term gains (44%);
- They pass on the costs (32%);
- The tie it to replacement of an existing system (13%); or
- They dedicate an innovation budget (10%).
According to the report, absorbing the costs in the expectation of long-term gains can place pressure on contractors to see a quickly return on investment (ROI), rather than seeing these investments as supporting longer-term business goals.
Likely Impact of IoT Technology on Risk
According to the report, the increasing use of sensors on jobsites is ushering the construction industry into the age of the Internet of Things (IoT). Contractors surveyed were asked how IoT could be applied to help mitigate risk. The five types of risk with the greatest potential for which IoT can best improve contractors’ project risk performance are:
- Occupational risks (73%);
- Risks to the public/non-workers (58%);
- Property damage risks (55%);
- Construction defects (49%); and
- Financial risks (49%).
However, few contractors expect IoT technology to impact their contractual risks or risks due to natural disasters.
“Contractors are often a skeptical audience, keeping a close eye on the bottom line,” says Steve Jones, senior director of industry insights research at Dodge Data & Analytics. “But when they see something that will improve their projects and their profitability, they embrace it. Their enthusiasm for IoT technologies suggests that we may see the project jobsite become much smarter in the next few years.”
Factors Impacting Use of New Technology
The most important factors considered when evaluating technology reported by contractors are ease of use, costs, training and support available, and quantified ROI.
When it comes to the most important capabilities encouraging adopting of technology for risk mitigation, contractors reported wanting to be able to negotiate lower insurance premiums, recover lost time away from work and win more work due to their safety record.
Lack of verifiable ROI, lack of internal resources to implement, privacy concerns and safety concerns were reported as being the top barriers to decision-maker buy-in on new technologies for project risk mitigation.
“While ROI is not a very influential factor in the consideration of new technology, the lack of verifiable ROI is considered a major obstacle when trying to get decision-makers’ buy-on on technology. Sixty-one percent consider this a top barrier,” reads the report.
For the contractor study Dodge surveyed 80 general contractors, construction managers or design-builders and 55 specialty trade contractors from November 11-28, 2018. Of the respondents, 47 were from small companies (2017 annual revenues of less than $10 million); 47 were from midsized companies (2017 annual revenues of $10 million to less than $100 million); and 41 were from large companies (annual revenues of $100 million or more).