by Kenny Ingram
According to PwC, 81% of CFOs in construction are considering cost reductions in response to the COVID-19 crisis and are urging construction organizations to demand visibility from vendors and contractors in their supply chain.
As we enter a post-pandemic era of construction, project teams need to keep project risk front of mind. Construction contractors will be required to work differently, build differently, and help project owners mitigate the risk of unforeseen disruptions.
Challengers Poised to Strike
PwC figures show that 71% of contractors are concerned with financial impacts of the pandemic. Large companies involved in major projects will struggle to adapt quickly, so construction challengers can unseat market leaders by offering faster, high quality delivery at a more competitive cost. This could mean adopting fast-paced modular, offsite or pre-fabricated project delivery methods while streamlining and automating project and subcontractor management steps at the back end.
- Turn risk into a strategic advantage. Actively managing risk to avoid surprises and delays is key for contractors post-pandemic. What contractors, engineering companies, clients, and asset owners need to determine, though, is how they can design and build assets around risks. Will a 5% increase in construction costs make a structure more resistant to wildfires like those that recently devastated Australia and California? Contractors must have the tools to help project owners identify and plan around these risks.
- Safety is a key differentiator. The COVID-19 pandemic will have implications for construction beyond work safety measures. Contractors should help project owners evaluate the desirability of things like the Position Document on Airborne and Infectious Diseases.
It may prove cost-effective for institutional environments to adopt air purification tactics or other building technologies such as ultraviolet air and surface treatment. Regardless, contractors must be able to consult intelligently with their clients based on risks that are identified, monetized, and amortized over the useful lifecycle of that asset they are building.
- Become indispensable with full lifecycle support. Project owners and engineering firms should explore new, repetitive annual revenue sources such as facilities and maintenance contracting supported with a facilities or field service management approach.
These advanced practitioners will need to engage in collaborative asset lifecycle management processes with their project and asset owner as they will share responsibility for the design, operate, and maintain phases of the asset.
Software Helps Strike while the Iron is Hot
As contractors expand into service and facilities management and offsite construction models, they will need more from their supporting software. The next generation of contractors needs to be agile hybrid businesses that are construction contractors, manufacturers and service businesses, and to operate effectively, contractors need a flexible and capable software solution.
With focus on adapting operations to exploit new opportunities, as well as managing risk, improving productivity and margins and growing revenue streams, contractors can put themselves in a strong position for post-pandemic success.
Kenny Ingram is vice president of engineering, construction & infrastructure at IFS.