Techno-Sadly: Construction Industry Remains Reluctant to Embrace IT

Use of information technology in home building lags far behind most other industries, hindering productivity and the ability to realize efficiencies

By Rich Binsacca, Editor-in-Chief | September 23, 2019

whether it's computer hardware or software, the home building industry's embrace of technology is still "under construction"

Even though technology potentially offers builders a business advantage via greater production efficiencies, customer satisfaction, and profitability, adoption continues to lag. (Photo: Fernando Arcos/ Pexels)

The building industry, and housing in particular, is not known for its acceptance and use of information technology (IT) to improve operations at any point along the development spectrum, from land deals to warranty calls. An oft-cited 2017 report by McKinsey Global Institute found construction lagging behind almost every industry in productivity, in large part due to its lack of IT sophistication, especially in the residential sector.

Our own research, in collaboration with Home Innovation Research Labs this past summer, as well as special questions added to the NAHB/Wells Fargo Housing Market Index earlier in the year, paints a similar picture of generally tepid interest and relatively low optimization of websites and integrated business software, much less popular social media platforms and nascent solutions like BIM and blockchain—all of which would help builders achieve greater production efficiencies, customer satisfaction, and profitability.

Housing’s reluctance to embrace IT can be traced, in part, to a lack of investment. More than half of all home builders, regardless of size, type, or location, spend 1% or less of their annual revenue on IT investments, namely computer software and mobile device applications, a figure that is roughly unchanged from previous years’ findings. The most recent ConTech report from JBKnowledge backs that up.

And while builders increasingly use smartphones as business tools, most remain unintegrated with the back office.

METHODOLOGY AND RESPONDENT INFORMATION: Survey credited to Home Innovation Research Labs was conducted in July 2019, with 306 home builders responding. Data from the NAHB/Wells Fargo Housing Market Index reflect 508 builder responses collected in March 2019.