Benefits of Modern Procurement Methods, Data, and Digital Technology in the UK’s Construction Industry

The construction industry is an integral part of most economies around the world. In the UK alone, it contributes approximately 7% of the entire GDP of the nation and employs millions of people. Despite its importance and size, the industry has long been dominated by traditional project delivery and procurement methods, leading to inefficiencies, delays, and cost overruns.

In recent years, there has been a growing recognition that modern procurement methods, utilizing data and digital technology, can significantly improve the industry's performance. Let’s explore the potential benefits of these modern approaches and how they can help unlock the potential of the UK’s construction industry.

Overview of the UK construction sector

The UK’s construction industry employs over 2 million people and is a major contributor to the UK’s exports too. The sector is made up of many firms, from large multinationals to smaller local contractors. It is divided into several sub-sectors, including residential, commercial, industrial, and civil engineering.

The industry has been significantly affected by the Covid-19 pandemic, with many firms having to take drastic measures to stay afloat. Despite this, it is expected to grow over the coming years, with the government’s focus on infrastructure projects, such as the HS2 railway line and the expansion of Heathrow Airport.

5 Reasons why the UK’s construction industry needs to be transformed

Below are the five main reasons why the country’s construction industry should follow today’s innovations:

1. For safety improvement

Despite improvements over recent decades, the building sector is the third most dangerous industry in the UK. It must be transformed to enhance safety through better working practices and standards.

2. Reduce environmental impact

The construction industry in the UK is one of the most polluting sectors of the economy. Making use of today’s efficient and sustainable building practices can help reduce environmental impacts.

3. Improve efficiency

The construction industry is one of the least efficient in the world, often plagued by long delays, high costs, and in many cases, poor quality of work.

4. Boost productivity

The UK’s construction field is constantly working to develop itself and boost productivity through better project management, technology, and more skilled workers.

5. Fill in skill gaps

The building sector is facing a skills shortage - it needs to increase the number of skilled workers and improve training and career development opportunities.

Modern procurement methods in the construction field

Modern methods of procurement in the building sector are becoming increasingly popular and are driven by the need to reduce project costs and time. The most common modern procurement methods are:

• Design and build - is a procurement route whereby the contractor designs and builds the project while the client provides all the necessary information.
• Construction management - involves the client appointing a construction manager to oversee the whole process, from design to completion.
• Partnering - is composed of the client and contractor working together, sharing risks and rewards, to achieve a successful outcome.
• Framework agreements - the client sets up an agreement with a contractor who will carry out all their construction projects over a specific period.

All these methods have advantages and disadvantages, and the most suitable one should be chosen depending on the specific requirements of a project.

Benefits of modern procurement techniques

Here are the leading benefits of utilizing modern procurement methods in the construction sector:

1. Improved cost control

Modern procurement techniques can help construction companies better monitor and control their costs, which is always a positive for effective project management.

2. Increased efficiency

These procurement systems allow quicker responses and immediate changes in a construction project, leading to faster completion.

3. Better coordination

Current procurement techniques provide better coordination between all stakeholders in a construction project, leading to better communication and collaboration.

4. Enhanced safety

Utilizing modern procurement systems can ensure that safety measures are adequately implemented and enforced, leading to fewer construction accidents and injuries.

5. Reduced environmental impact

Modern procurement techniques can reduce the environmental impact of construction projects, specifically by reducing waste and improving energy efficiency.

Examples of effective procurement methods

Below are some examples of effective procurement methods in the construction industry.

1. Subcontractor vetting

Carefully vetting and assessing subcontractors to ensure they are qualified, dependable, and able to deliver quality work on time and within budget.

2. Bid management

Organizations can consolidate bids from multiple vendors to ensure cost savings and the best value for money.

3. Strategic sourcing

Developing and executing a comprehensive procurement strategy that involves researching suppliers and leveraging competitive pricing to drive cost savings.

4. Pre-qualifying contractors

Gathering detailed information from contractors to qualify them before allowing them to bid on projects.

5. Negotiating contracts

Negotiating terms with suppliers to ensure the best possible deal is reached.

6. Supplier relationship management

Establishing and maintaining long-term relationships with suppliers to ensure a steady supply of materials at competitive prices.

Widespread use of data and digital technology in construction

Data and digital technology are becoming increasingly commonplace in the building sector. This emerging trend leads to heightened efficiency and accuracy in construction projects and a greater understanding of the project lifecycle.

Access to critical data and digital technology can improve communication between project stakeholders, manage resources, and boost safety. With the help of digital systems, companies can easily track progress, pinpoint improvement areas, and uncover optimization opportunities.

As the industry continues to embrace technological innovations, construction firms can augment their projects and achieve increased success.

Advantages of using data and digital technology

The use of digital technology in construction offers numerous benefits including:

• Improved project efficiency
• Reduced costs
• Project accuracy
• Better access to project data

Data and digital technology can be used to streamline processes, improve collaboration between teams, and reduce the time it takes to complete projects. Digital tech can be used to track and monitor construction progress in real-time and to identify potential problems before they become costly delays. Moreover, technology can be used to create a more accurate, automated inventory tracking system, allowing for more efficient use of resources.

Examples of how data and digital technology can be used in construction

Here’s how data and digital technology can be leveraged in the construction sector:

1. Automated Survey Technology

Using automated survey technology such as drones and laser scanners can help to quickly and accurately measure and map building sites, generating more accurate data for further planning.

2. Virtual Reality

Virtual reality can be used to visualize construction plans and projects, helping identify potential problems before they occur.

3. Artificial Intelligence

Artificial intelligence can be used to interpret data and generate detailed reports on the progress of construction projects, helping to pinpoint areas of inefficiency or potential issues.

4. Cloud Computing

Cloud computing can be used to store and share data, allowing for better collaboration between contractors, architects, and other stakeholders.

5. Wearable Technology

Wearable technology such as augmented reality glasses can be used to provide workers with real-time data, allowing them to make faster decisions and improve overall productivity.

Modern procurement methods, data, and digital technology in the UK’s construction sector - in a nutshell

Modern methods of procurement and the widespread use of data and digital technology have the potential to completely transform the productivity and efficiency of the construction industry, whether that’s in the context of the UK or worldwide.

By implementing new processes like prefabrication, modularization, and Building Information Modelling (BIM), construction companies can maximize efficiency and reduce costs.

Using artificial intelligence (AI) and machine learning can help identify and solve problems on job sites, and with these new tools, the industry can create a more efficient and cost-effective way of building that will ultimately benefit both companies and clients.

How IFS and Boomi can support the UK construction industry in 2023

In 2023, the UK construction industry will undoubtedly face several challenges, from changes in regulations to the need to innovate and increase efficiency. To help them meet these challenges, IFS and Boomi software solutions can be tremendously impactful and beneficial.

IFS is a comprehensive software solution for managing entire construction project lifecycles, from planning to completion. It can aid construction companies in improving efficiency, tracking, reporting, and collaboration, as well as providing deeper insight into a project. This helps ensure that projects are completed on time and within budget while enabling building firms to manage their resources better.

Boomi is a cloud-based platform that enables businesses to integrate data quickly and easily from different systems. The platform can help improve the flow of information between various stakeholders, such as contractors, architects, and subcontractors, by allowing them to access and share data in real-time. It streamlines processes and reduces manual data entry, improving efficiency and cost savings.

Together, IFS and Boomi can help provide the UK construction industry with the tools, technology, and insights needed to remain competitive in 2023. Contact RutterKey Solutions today via the form below to find out more about how we can support the transformation of your construction organization through IFS, Boomi, or combined software implementations and upgrades using both software platforms.