I recently came across an interesting report that less than half of construction finance data is centralized—and quite honestly, it doesn’t surprise me. However, what is promising is the amount of individuals that recognize the potential impact of AI (artificial intelligence) and automation.
Now, before we dig into the numbers, I do want to mention a caveat. The report was conducted by Rabbet—which is a provider of a construction-finance platform. I always pause when a survey is done by a technology provider because clearly one of the company’s objectives is to sell more software, but in this case the numbers do line up with what we are seeing and hearing from those in the construction industry.
The company surveyed commercial lending executives and real estate developers with portfolios ranging from under $10 million to more than $1 billion.
Here’s the challenge: Currently none of the developers believe their lender’s process is fully streamlined or efficient. None. Zero. Further, 42% report that the current process is slow and frustrating. Even more, only 48% of data used for construction draws is centralized in a system—meaning the other half is stuck in spreadsheets, PDFs, and emails.
Here’s what is encouraging: 70% of lenders agree that aspects of the draw process can be automated and 67% of developers think automation will expedite the process.
Reading in between the lines, the big takeaway here is this: Construction data is still stuck in antiquated processes. This is true for finance data, but it is also true for project management, estimating, and the list goes on and on. Very few construction business processes are fully automated. But—and this is a big but—construction professionals recognize that the opportunity exists to tap into AI.
So the question now becomes how. How does the industry take that next big step and move from mostly spreadsheets and PDFs to centralized and integrated systems that share data across all project stakeholders? I think the first step is to talk about the challenges. What is holding the industry back? Is it lack of integration? Is it company—or perhaps industrywide—culture? The industry recognizes we need more intelligent technology in our business operations, and yet, taking that leap seems to be a big hurdle. What needs to happen next?
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