The Importance of Data Analytics in the Construction Industry

The Importance of Data Analytics in the Construction Industry

March 29, 2024
The Importance of Data Analytics in the Construction Industry

Data analytics uses information from business operations or industry activities to find insights. Decision-makers can use these findings to inform their choices or assess the effectiveness of strategies they already have in place. 

In construction, analytics programs can assess data on performance, finances, or safety. The analysis can define areas for improvement. Also, it can measure the effectiveness of recent changes compared to old processes. For example, a construction company could measure work hours and quality for a new piece of equipment and compare it to similar data from previous equipment. 

Many construction firms are already adopting analytics. Research by KPMG found that 45% of construction companies already use basic analytics, and another 45% are in the process of adopting digital analytics tools. Meanwhile, 68% have already adopted or plan to use advanced analytics systems. 

Here is a closer look at this increasingly important aspect of construction. 

The Evolution of Construction Project Management

Traditionally, construction companies relied on phased execution. The project would move forward in well-defined steps, with the next stage beginning when the previous one was finished and approved. 

Also known as waterfall project management, this approach is very methodical. While it ensures that each stage is complete and creates some predictability to the process, it also introduces some potential drawbacks to the construction process. For instance, a delay during one stage can set back each subsequent stage, making it difficult to remain on schedule. Also, project flexibility is limited. Changes are unwelcome because they disrupt the remaining stages. 

Data analytics provides insights that can help streamline project management. For instance, software can read and analyze blueprints. It can produce estimates for materials and define dependencies, allowing construction managers to find the most efficient plan for the project. 

Also, collaborative, cloud-based software allows stakeholders and specialists to take part in project planning and receive updates in real time. These features support flexibility and give contractors the ability to adjust projects based on current data analysis. 

From Manual Processes to Digital Tools

Today’s project management approaches rely heavily on digital tools. These applications and software packages provide some important advantages to construction teams. 

Data analytics also offers insights to help improve safety and define potential risks for a project. These insights allow safety managers to build mitigation steps into the project planning. 

Key Applications of Data Analytics in Construction

Data analytics is an effective tool during project planning. However, automated data collection and analysis can continue to provide insights during construction, offering real-time updates using information from the job site, equipment, and the supply chain. 

Here is a closer look at how data analytics provides support during different stages of a project. 

Enhancing Project Planning With Construction Data Analytics

Data analytics is effective at predicting needs, timelines, and potential problems during planning. For instance, analytics software can compare current plans with historical data and pinpoint problem areas. It might assess current measurements, schedules, and other variables and see how these compare to past projects. 

Project planners can adjust their timelines or estimates based on these objective analyses. Also, they can use insights from historical data to plan for potential risks and make contingencies to respond to delays or other problems quickly. 

Streamlining Project Management Through Real-Time Data

Real-time data allows managers to fine-tune their plans as the project progresses. They can receive constant updates on job completion and resource and labor availability. Rather than being stuck with a plan, as they would be with waterfall project management, managers with real-time data can see problems before they arise and deal with them instead of accepting delays. 

Also, the construction process will produce its own data sets. Analytics software can add this information and assess current performance or make updates to cost and time forecasts. With the most up-to-date objective insights, project managers can make more informed decisions at any stage of the project. 

AI-Powered Estimation Tools

AI-powered construction software can help improve estimates for construction takeoffs. These tools make accurate measurements and calculations based on blueprints or building information models. The software also identifies the need for different materials. For instance, it can estimate mechanical, electrical, and plumbing materials based on blueprints. 

AI-powered estimation tools can streamline takeoff processes, but they can also improve collaboration. Cloud-based estimation software is accessible to contractors and subcontractors from any location. They can see the estimates and data and offer insights or corrections if needed. 

Estimating software can also count indirect costs, like equipment maintenance, administrative expenses, and insurance. These estimates give you an overall picture of project costs to accurately calculate return on investment and plan project budgets. 

How AI Enhances Cost Estimation in Construction

AI can enhance construction takeoff estimates by automatically calculating measurements and materials quantity needs based on blueprints or building information modeling (BIM) data. Not only does AI software reduce the time required for manual measurements and calculations, but it also reduces the chance of error. 

Accuracy is essential for all types of construction estimates, but it is especially important for bid estimates. Low bid estimates can reduce or eliminate profits, while high estimates reduce the chance of winning the project. 

Individual contractors can use takeoff software to measure their own costs for the project and ensure they can profit from their participation.

Finally, AI software can account for different building costs. It can automatically add permit costs or calculate labor expenses based on the local market. Also, calculations related to factors like the cost of contingency plans can help develop risk management strategies. 

Implementing Data Analytics in Your Construction Projects

Data analytics requires reliable data sources and an infrastructure to deliver information to the software. For instance, a company needs BIM software, project management platforms, or blueprints to provide the data for current and past projects. You also need a place to store data so that it is easily accessible when needed, such as a cloud-based storage solution. Meanwhile, for real-time data, it may be necessary to invest in Internet of Things (IoT) sensors.

In addition to the upfront costs of purchasing this new software, you need to ensure decision-makers understand how to use analytics reports. Some may be reluctant to adopt the insights into their decision-making processes. Others may not be aware of how to use data. 

With careful planning and investment in data infrastructure and training, you can ensure quality data and real-time insights while also training decision-makers to use analytics reports to inform their planning. 

According to the KPMG research, 90% of construction companies will soon rely on data analytics tools. The insights from this software can help streamline planning, reduce errors, provide flexibility, and offer real-time insights to inform decision-making during the project.

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