The construction industry, an inevitable pillar of infrastructural development and a nation’s economy, has been facing a significant standstill worldwide from past several years.
As a contractor, you’re no stranger to the chaos in this industry, from budget blowouts to labor shortages, making it a constant challenge to stay on top of projects and maintain a profitable bottom line.
Despite industry’s promising growth prospects, driven by rising demand and desire for convenient lifestyle, its volatile and uncertain nature poses significant challenges for leaders to survive and thrive.
Hence, for sustainable business growth, it is essential to identify and understand the root causes.
Why Construction Industry Facing a Major Setback?
Challenge 1: Budget Overruns
In the beginning of every project, budgets are meticulously estimated, yet these estimates often fall short by the time the project is completed.
Numerous factors, such as price fluctuations, labor wages, structure changes, market shifts, inflation, and even material theft, contribute to this problem.
Currently, every 7 out of 10 contractors experience budget overruns, still there is no systematic tracking of how much the budget is overspent and what specific factors contributed to the overrun.
Hence, adopting advanced software is necessary to seamlessly track every expense, identify and manage the factors leading to budget overruns.
Challenge 2: Small Mistakes, Huge Losses
In construction, even minor errors can lead to substantial losses and safety concerns that can sink your project in no time. For example, using the wrong aggregate size in concrete can compromise structural integrity.
Avoiding such catastrophic errors requires meticulous planning, seamless communication, and coordination across all levels of management.
Challenge 3: Project Status (Where Are We Really?)
Managing multiple tasks simultaneously makes it quite difficult to track the accurate progress of the construction project.
Because often, there is no clear & proper record of how much work has been completed, which tasks are taking longer than expected, which team has finished their tasks, what part of project is ongoing and where we are lagging behind.
Implementing project management software that updates the status in real-time can streamline this process and reduce errors.
Challenge 4: Delay
Delays in construction projects are often caused by factors such as material shortages, labor unavailability, market shifts, and irregular payments.
All these issues are unforeseen but can be handled on time with accurate inventory tracking, proper planning, and efficient time management.
The industry must leverage inventory management systems that provide timely updates on stock and detail project planning to avoid such delays.
Challenge 5: Non-Cooperation and Communication Breakdown
Miscommunication between office and site employees leads to project delays and other issues.
Situation may escalate and create unethical work environment due to Non-cooperation between office and site employees. Such lack of coordination arises from poor management and organization.
Thus, implementing software that provide clear communication channels with regular updates between office and site teams can help mitigate such issues.
Challenge 6: Technological Darkness
Technology has made a tremendous advancement, we now have access to faster, more efficient and cost-effective solution that requires minimal men-power, making it an exciting time for innovation and development.
However, in the industry, a major portion of contractors remain unaware of the latest technology due to their overwhelming workload.
They should invest in advanced software available in the market to increase their productivity and stay ahead of competitors.
But question remains how a contractor can be update on latest technology? Well, by attending trade shows pertinent to their business or by following our articles.
Challenge 7: Labor Shortage
Laborers are considered the backbone of every project; their availability can either make or break your project.
Tracking the availability and allocation of every labor in every department from every agency or subcontractor seems to be a tedious and time-consuming task.
Thus, It’s advisable to implement labor management software to optimize resource allocation and track labor hours.
Challenge 8: Irregular Payments
Many contractors face delayed payments, which disrupt cash flow and hinder further project activities.
It may seem like a minor issue, but it can have a major impact overall, resulting in potential financial loss.
Challenge 9: Traditional Methods
Despite the introduction of advanced technology, many subcontractors and agencies rely on traditional methods for accounting and project management.
It adversely affects main contractors, as there are chances of tampered bills and inaccurate calculations.
It’s high time to ditch traditional methods for modern software to improve overall efficiency and reduce the risk of errors.
Challenge 10: External Factors
Stay informed regarding legal regulations, market situations, quality standards, competitors, and due diligence for strategic planning and smooth execution of construction business.
Don’t let these challenges hold you back; understanding and addressing them can totally transform your business and profitability.
So, be wise & witty and grow your construction business effortlessly.