91% construction companies spend less than 5% of annual turnover on technologies: Report

NEW DELHI: Over half of India’s construction companies including those involved in rail, road and housing projects, currently only spend 1-3% of their annual turnover on technologies, while one-third spend 3-5% according to a survey by international data corporation, a global market intelligence firm.

According to IDC, construction companies must work on creating a digital transformation technology roadmap.

In India, 35% are planning to establish this roadmap within the next 12 months, highlighting how it is a priority for construction companies in the country. However, 24% still have no plans to do so.

“IDC defines digital transformation as the application of 3rd platform technologies such as cloud, mobile, big data and social, coupled with organizational, operational and business model innovation to create new ways of operating and growing businesses,” the report said.

The study commissioned by Autodesk India, a subsidiary of Nasdaq listed Autodesk Inc, was done before covid and the Autodesk executive said demand for technology will increase post COVID-19.

“Covid will definitely speed up the process of companies going for technology. A lot of delay and cost overruns happen because of communication gap and with technology, that can be removed. At least 20% of the project cost can be saved, if companies move to digital,” said Sunil MK, the head of architecture, engineering and construction at Autodesk India, which offers software services in areas such as architecture, engineering and construction.

According to the report, only 3% of companies are well on their way to succeeding on their digital transformation journeys while over 70% of construction companies in India are only starting their journeys.

“The companies that had digital technologies in place, did not lose a single hour due to covid induced lockdown. As companies will prefer work from home in future, it is important to have digital tools to successfully do that,” said Sunil.

The report said that construction companies in India are looking into new technologies to accelerate their digital transformation, with project management, enterprise resource planning (ERP) and client relationship management (CRM) as the top planned software investments.

“The Indian government sees the need of technology in construction in response to the growing demand for housing, spurred by a fast- growing economy and urbanization.

While majority of India’s construction companies are at the early stages of digitalization, the industry anticipates acceleration in digital transformation,” the report said.

66% of construction companies in India said digital transformation is a key priority to drive much- needed changes to their processes, business models and/ or ecosystems.

“Through this, construction companies can ensure operational excellence and improved customer engagement by effectively managing risk, completing projects on time and on budget, improving workforce safety and, overall, support infrastructure growth across world economies,” it said.

In India, a lot of real estate companies are using technology mostly for the sale of product. Prop.vu, which is a cloud based, technology enabled solution and helps to create an integrated sales management and customer engagement platform for real estates said use of tech solutions are necessary at every stage.

91% construction companies spend less than 5% of annual turnover on technologies: Report 91% construction companies spend less than 5% of annual turnover on technologies: Report Reviewed by TechCO on 7/27/2020 Rating: 5

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