Out With The Old, In With The New
To say the construction industry has experienced unprecedented challenges in the past few years is an understatement. From material price volatility and scarcity, the ongoing search for desperately needed skilled labor to soaring energy costs and growing fears of an economic downturn due to rising interest rates – all of these factors have bedeviled the industry, testing general contractors as never before.
To reduce the impact of these combined challenges, the construction industry is leaving behind the days of Excel sheets and Post-it notes and embracing digital transformation to increase productivity and competitiveness. According to a recent survey conducted by PlanHub, 91% of general contractors and 82% of subcontractors plan to or are considering implementing new technology in 2023.
The pandemic and continued economic headwinds have accelerated the industry’s embrace of construction technology (ConTech). Between 2014 and 2021, investment in ConTech platforms totaled $29.5 billion. These systems have quickly become a key component in every project’s life cycle, from the design phase through post-construction.
New projects are the lifeblood of a healthy construction business, and general contractors are constantly looking for tools that provide a constant stream of quality new leads. Thankfully, there are now better options for general contractors to gain access to not-yet advertised or open-for-bidding commercial construction projects that provide complete contact information to connect them with decision-makers.
The Crossroads of Technology and The Pre/Design Phase
Before submitting bids or beginning any physical work, commercial projects go through a design phase. This phase is one of the most pivotal points in a project. During this time, general contractors are building their backlog of projects that they still need to complete or bill.
This backlog serves as a crucial measurement of the work they have been contracted to complete and is key to tracking the success of their business. The additional significance of backlogs includes:
- Financial stability: A healthy backlog of projects provides general contractors with a level of financial stability by spreading their workload across multiple projects, reducing the impact of any project’s delays or cancellations. Established backlogs also ensure that general contractors have a steady income stream and cash flow to cover expenses and invest in future growth.
- Forecasting: Backlogs help contractors more accurately forecast their future workload and revenue. Better forecasting allows them to efficiently plan and allocate resources such as staff, materials, and necessary equipment.
- Competitive edge: A strong backlog can give a contractor a competitive advantage when bidding on future projects, as it demonstrates their capability and experience to potential clients.
Finding quality projects takes a significant amount of time, and time is a luxury most general contractors don’t enjoy. According to the Associated Builders and Contractor (ABC) February report, the average project backlog is 9.2 months, over a month higher than in February 2022.
Digital transformation can maximize opportunities and build a fuller pipeline. Lead finding platforms developed by and created for general contractors are now helping general contractors scout projects still in the early stages of development. These projects may have never come across the general contractor’s path because they are private.
The benefits of a lead solution do not end with finding projects general contractors can add to their backlog. It also provides them with detailed information and the ability to connect with several key figures in a project’s life cycle, including the architects, developers, owners, subcontractors, and suppliers. These connections benefit general contractors in the short term by being considered when projects become available and, over time, by building meaningful and fruitful relationships for future project consideration.
Greater Backlog Terms, Less Stress
Construction professionals are confident and optimistic. They see challenges and find ways to overcome them. That’s why, despite vexing challenges like the skilled labor shortage and material price inflation, PlanHub’s State of the Industry Report found that 82% of general contractors plan to grow their business this year.
To turn those goals into reality, general contractors must take advantage of digital transformation and utilize new tools that build their pipeline and help them quickly find and win the best projects.
Ro Bhatia is the CEO of PlanHub, the leading cloud-based preconstruction platform that enables general contractors, subcontractors, and suppliers to connect and collaborate on construction projects across the U.S. PlanHub was created by contractors for contractors to simplify the construction bidding process.