Today’s technology can greatly enhance risk management capabilities, enabling construction firms to navigate uncertainties with greater confidence. By leveraging advances in artificial intelligence (AI) and data analytics, companies can proactively identify, assess and mitigate risks, increasing the likelihood of project success and long-term growth. As the industry continues to embrace technology, the synergy between innovation and risk management will become even more critical for construction companies to remain resilient and competitive in this ever-evolving landscape.
Some of the most common challenges that plague the construction industry can be addressed and improved with proper use of the right technology. Here are four key areas where tech can dramatically help your business:
1. Project delays and claims: The use of AI, in the form of predictive analytics and machine learning, can provide owners with warning signs to help them anticipate and work around delays caused by weather, labor shortages, supply chain disruptions, or design changes. Utilizing this type of AI, construction managers can plan ahead, optimize schedules, and adjust resources accordingly.
Interior water damage, for example, is a frequent cause of project delays for contractors worldwide, and a driving factor in the rising cost of related claims. However, the use of advanced AI/sensor-based technology enables companies to minimize and/or prevent future damage and delays. Those firms who have implemented these technologies also find additional savings through reduced deductibles and better pricing in the Builders Risk marketplace.
2. Cost overruns: Proactive budget management based on cost escalation predictions can help avoid unexpected expenses and keep projects within their financial scope. By using data-driven tools, construction managers can more effectively track and control costs, monitor cash flow, and identify potential savings or risks.
Data analytics can be used to transform an organization. By providing real-time insights, contractors are enabled to make data-based decisions at a much faster pace than has historically been possible. This, in turn, can help keep insurance costs to a minimum, provide a more accurate reflection of the job to help eliminate costly project extensions and also allow organizations to reduce waste and increase sustainability.
3. Safety: The use of today’s smart devices, such as sensors, drones, and wearable technologies, allows construction managers to monitor site conditions, detect hazards, and alert workers in real time. This enables timely intervention and swift action that can reduce or prevent injuries and save lives, while also lowering insurance claims. For example, ‘smart’ hard hats can do more than keep workers safe from falling objects; they can also track their location, measure heat and health indicators, and provide direct communication to the jobsite.
4. Communication gaps: Utilizing a collaborative, cloud-based communication platform can minimize disputes and enhance teamwork by ensuring all parties are simultaneously updated and on the same page throughout the project. With this type of software, construction managers can share information, documents, and feedback with stakeholders, contractors, and clients, while streamlining workflows and approvals. This can improve efficiency, quality, and customer satisfaction.
Key considerations
Change of any type – despite the potential benefits – brings its own set of challenges, and there are important issues to be addressed before implementing any new technology.
Cost is often the first consideration. However, as the industry evolves it is evident that technology is a long-term investment that must be recognized as an integral part of the company to not only thrive, but survive, in this digital age. The powerful insights it provides will be key to proactively addressing operational issues and remaining competitive in the marketplace.
Training is as fundamentally important in technology as it is in the field. To ensure successful implementation, all relevant employees must be trained to properly utilize the technology and analyze the data provided, to its fullest extent. Nothing can turn a long-term investment into a cash-drain as quickly as a lack of training and/or buy-in from employees.
Data privacy is a serious and significant concern that must be addressed in a world where cyberattacks are on the rise and becoming more sophisticated. Be sure to take the proper steps to protect all the data that will be provided by any new technology, as it is a crucial component of your overall risk management plan. Having the proper coverage for cyberattacks is also important, as is knowing that your insurance carriers provide both front-end and back-end support in the event of a claim.
By embracing the actionable insights derived from the data these new technologies provide, construction companies can optimize operations, increase efficiencies, drive innovation, mitigate and reduce the total cost of risk, and ultimately, enable informed decision making that leads to long-term, sustainable success.
