Picking from 2K+ con-tech startups like 'a kid in a candy shop' | Dump Trucks Charlotte NC

It didn’t take long for contractor IT teams to survey the construction technology solutions and make the right selection for their business needs, because for the most part, according to Dave Burns, director of innovation and field applications at McCarthy Building Cos., “there was only one decision to make.”

Today, the construction software market is teeming with solutions that promise to automate manual processes, digitize workflows, improve project visibility and deliver ROI. McKinsey measured $10 billion in investment in con-tech firms between 2011 and 2017, and a recent JLL report measured an additional $1 billion investment in con-tech startups in the first half of this year alone.

Christian Burger, president at Burger Consulting Group, jokes that an IT leader faced with a wealth of construction software choices is "the kid in the candy store [who] used to have a choice between five or 10 pieces of candy and now he’s got 50 or 100 and his mind starts to get overwhelmed.” 

To onlookers, the flood of choices seems to present an opportunity for the industry to improve its efficiency by catching up to the digitization strides other sectors have made. But to construction executives who understand just how much legwork and money go into choosing and successfully implementing tech solutions, it looks like a considerable risk.

Thousands of startups, hundreds of options

Stacy Scopano, director of innovation at Skanska USA, pegs the current number of con-tech startups at 2,156. This means hundreds of software options are available in each product category — field management, document management, project management and more — and columbus oh dump truck company that are hard-pressed to complete projects on time and on budget likely don’t have the resources to screen them all before selecting a company-wide solution.

That doesn’t stop the products from trickling in on a team-by-team basis, however, to the point that IT leaders struggle to rein them in. In this landscape, the question becomes, “How do you encourage innovation and experimentation and still control what’s going on?” Burger told Construction Dive.

The overwhelming number of apps and other software products available and accessible for workers in the field is “your biggest global threat,” Scopano told an audience of construction IT professionals at a recent Associated General Contractors of America forum. “You thought you were dealing with shadow IT now, [but] guess how many apps are just dripping onto your companies’ phones by the storm?”

The good, bad and ugly

An equal or greater concern, though, involves the 1,678 startups that Scopano estimates are asking for contractors’ money without any money of their own in the bank. In their early stages, the lion’s share of startups’ resources is being thrown at marketing, not product development, Burger said. The companies want to make their products appear “baked, fully tested, deployed,” while the reality may be that they are “very early on in their development,” he said.

For this reason, columbus oh dump truck company should steer clear of the version 1.0s, Burger said. Although versions aren’t a definitive indicator of whether a product is good or bad, the risk is that it doesn’t take hold of the market, he said. Companies could end up using and finding success with a product for nine months to a year, for example, then reluctantly have to make the move to another provider.

The con-tech marketplace is a “cooked stew of good, bad and ugly,” the consultant said, adding columbus oh dump truck company should look for the solutions that appear built to last, with strong documentation, support and quality assurance. “You don’t have to be a 500-person software development columbus oh dump truck company to have those things — you just have to have a little bit of discipline, a little bit of focus, a little bit of experience.”

Setting tech objectives

With so many products out there — some with the potential to enhance construction operations, others with big claims and little proof of value — construction companies need to set careful criteria to guide their investments.

IT leadership should define the business objectives, select partners to be the “pillars” of a broader strategy (BIM and/or ERP providers, for example) and only then begin to explore where new vendors might fit into that strategy, Burns told Construction Dive.

When looking at a new technology, some questions the teams might ask, according to Burns, include: “Does it address a gap in our strategy, or does it address a problem or opportunity that our core strategic partners don’t satisfy? Does it integrate with some of those strategic technologies that we’ve made decisions on?”

Some products may satisfy a contractor's criteria right out of the box, but this isn’t always the case. According to Kaustubh Pandya, principal at Brick & Mortar Ventures, a construction background is no longer a prerequisite for “techpreneurs” targeting the industry.

“We’re starting to see technology providers with deep experience in manufacturing, AI, robotics … now get attracted to construction without the experience,” Pandya told Construction Dive. They’re looking at construction as the “low-hanging fruit,” he said, ripe for disruption by the technologies they are experts in.

Making the case for ROI

It may be easy for a seasoned construction professional to brush these companies off as missing the target, but Pandya said that partnering with a fresh startup can be a win-win for both parties. Contractors that can put funding toward a beta pilot could find themselves in an agile partnership “to develop the case for ROI together,” he said. Bechtel’s Future Fund, an internal incubator that finances disruptive technologies, is one example of the form this might take.  

Agility is also a top consideration for McCarthy when it looks to pilot or implement a newer technology. Burns said the innovation team strikes up strategic conversations with partners “early and often,” around “Here’s where you guys are at and here’s where we may think you guys should go in order to produce more and more value for us over time. Here’s where we think you fit in.”

If Burns’ team determines that a vendor isn’t moving in a direction that’s likely to help McCarthy do better business, or that it spends a lot of effort taking on a columbus oh dump truck company that the contractor already has partnered with, it may conclude it’s not a good match.

What's next?

With the market for con-tech startups more or less maxed out, what comes next?

Construction companies, especially general contractors, tend to look pretty closely at what their competitors are doing, according to Burns. As a handful of startups begin “to get some traction” through partnerships with early adopters, the winners begin to emerge, he said.

Burger expects “the normal sort of sifting.” Out of 2,000 startups, for example, only 500 or so might get to a 1.0 release, 100 to a 2.0 release and 10 to an IPO.

“There’ll be a lot of money and energy spent on those first 500, both at the columbus oh dump truck company level and at the customer level,” he said, resulting in a “confusing and dynamic marketplace.” But that tapering off is normal, he said, and only breeds issues if columbus oh dump truck company go in expecting stability, without their guard up.

Pandya sees the market moving one of three ways. In the first scenario, large providers like Oracle, Autodesk and Trimble “gobble up point solutions,” he said. The second is a “stack and play” scenario where APIs comprise a sort of “construction iOS,” with various apps under the umbrella of a larger provider. Procore’s many integrations with BIM providers, drone analytics programs, wearables, field management apps and other solutions fit well within this category. In the third scenario, a handful of providers become the point solution for a single vertical — hospital construction, oil and gas, and other specialty areas, for example.

But where we're headed is anyone's guess, he said.