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.

 

Professional Builder Exclusive Research digital tools used for sales and marketing chart
The good news: Builders are leveraging both a personal touch (emails from individual accounts) and their greatest asset (website), but few are truly aware of the rules regarding texting and have only scratched the surface (and potential competitive advantage) of popular social media platforms to reach consumers.

 

 

Professional Builder Exclusive Research computer software expenditure chart
Why does housing lag behind other industries in its use of IT? Spending (or lack thereof) is a good place to start, as more than 40% invest less than 1% of their annual revenue for software and apps, with nearly 10% spending nothing.

 

 

Professional Builder Exclusive Research drone use chart
About 44% of home builders use drones, nearly double that of 2017, and even more (75%) among those with 100-plus housing starts, but they remain primarily a promotional tool.

 

Professional Builder Exclusive Research home builder software use chart

 

 

Professional Builder Exclusive Research chart on lack of software use
In fact, most builders use individual (non-integrated) software solutions for these and other tasks, but the fact that more than a third do not use any digital tools for scheduling and CRM (and nearly as many for purchasing) speaks to the industry’s persistent inefficiencies.

 

Professional Builder Exclusive Research builder hardware use chart
Mobile devices, including laptops, are becoming the hardware of choice among builders, pointing to a need to use (and integrate) mobile applications for smartphones and tablets with software back at the office.

 

Read more:

Data Driven Builders Leave the Guesswork Behind

Editor-in-Chief

Rich Binsacca is Professional Builder’s editor-in-chief. He has served as an editor and frequent contributor to several housing and building construction-related print and online publications, and has reported and written about all aspects of the industry since 1987.

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PB-Industry Data + Research,PB-Innovations,PB-Building Technology,PB-Business Management,PB-Construction,PB-Builders
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