The Future of Construction: How Tech is Changing the Industry

Join Wade and Stephen as they explore how technology is revolutionizing the construction industry. 

Discover how innovations like BIM, drones, and automation are reducing costs, improving project management, and increasing profitability. Learn why so few contractors are adopting these tools and how they can overcome the barriers to implementing new technology. 

Packed with statistics and insights, this episode offers actionable advice for contractors looking to work smarter and more efficiently.

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Topics we cover in this episode include:

• 00:32 The Impact of Technology on Construction
• 01:00 Adoption Challenges and Benefits
• 02:56 Innovative Technologies in Construction
• 05:27 Real-World Examples and Case Studies
• 10:11 Future Trends and Predictions
• 19:45 Overcoming Barriers to Technology Adoption

LINKS

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Wade Carpenter, CPA, CGMA | CarpenterCPAs.com
Stephen Brown, Bonding Expert | SuretyAnswers.com

Transcript

[00:00:00] Wade: Did you know that up to 35 percent of a construction project's time is wasted due to inefficiencies? Or that construction productivity has grown at just 1 percent annually, while global economy moves at nearly three times that pace? Now, imagine if technology could change that. What if the right tools could cut costs, streamline projects, and put more money in your pocket? Welcome to the Contractor Success Forum. I'm Wade Carpenter with Carpenter Company CPAs. With me, my co host Stephen Brown with McDaniel Whitley Bonding and Insurance.

And today we're diving into how technology is transforming construction. Helping contractors work smarter, not harder, and we'll break down the innovations like BIM, drones, automations, etc. And more importantly, how they're actually impacting the bottom line. So Stephen, to start us off, you work with contractors all the time, every day. Do you think most of them are embracing this tech? 

[00:01:00] Stephen: 

It's amazing, you know, some factual data from a Dodge report with Liberty Mutual showed that only 10 percent of the commercial contractors out there are utilizing, Some of the most simple technology that we're going to discuss today.

Why is that? Because I think there's some effort to learn it. Maybe there's some fear involved, and maybe there's not an understanding of what that can do for you. And another thing, our customers that are using technology, there's always more technology that you can implement and use better. To me, you are the ultimate guru in implementing technology. It's almost like all the technology that wasn't forced on me from Microsoft upgrades has come through you or Rob, another one of my techie friends. you have a real gift for explaining the technology and how you implemented it. And how useful it is. And also being available with dumb questions while I'm trying to implement it myself.

So, thank you for that.

[00:01:59] Wade: Well, like I said, I think we had some good conversations already come out. And what we did with this one, we took a deep dive into researching some of the technology that's out there for contractors today. Really getting some statistics about how well they're adopting some of this technology and how it could be impacting their bottom line. Contractors are often, you know, maybe they're not tech savvy. You don't have to know everything. You can get some help on this stuff. 

Some of the statistics we're going to throw out today, I think, hopefully will change some minds. Maybe you go look into some of the things that we're talking about.  

[00:02:40] Stephen: You shouldn't just implement technology because you have to, you have no choice. You ought to implement it based on these statistics. Wade, this is great information. I'm really looking forward to diving into this with you.

I mean, I just thought we would throw out some of the things that we came up with and then just discuss it. Technology in the construction industry, if we look at, the innovations that are coming out of construction, there was a study from 2016, and we can probably a lot of these citations in the show notes, but only 1 of revenue is spent on research and development in the construction industry. What we're finding is a lot of people are not eager to adopt this stuff or try to do things differently. Some of the things I really wanted to go into is the technology looking at whoever's working in a company, like this is the owners, you got estimators or whatever, and I often operate on different systems, separate systems that are not integrated together. I mean, just even estimating. One person does it on Excel. One person uses some kind of software they had online or something like that. But a lot of this technology is not rocket science and the things we're talking about is not rocket science. It's just getting people on the playing field. Yeah, I get that. As we were talking about it, there's so many different categories of technology for a contractor. You know, there's the technology that helps you with your design work. Technology that might help you sell a project to an owner. Technology that helps minimize human error.

Technology that helps you do repetitive tasks more quickly, saving time and cost. Technology that's available to simplyhelp you read and analyze a contract. Unbelievably simple and effective. How do o you want to start, Wade?

[00:04:26] Wade: I think we talk in general, and then I'm just going to throw some of these things out because these things like BIM, using drones and, you know, project management platforms, those kinds of things. There is a study that we also saw that came out about 2020 that more of the midsize contractors are starting adopt this technology. And we've already had episodes where we've talked about just using drones..You know, drones can, survey your, project construction site. I've had people doing, security and, keeping track of things on their,with drones. It's amazing some of the cost savings.

I had a company that specialized in construction, security, and it was amazing what they're doing, like infrared cameras and all this stuff. And not having a physical security guard on, you know, not having to pay for that wage. And it's saving quite a bit of money. So I'm just starting throwing some stuff out. What do you think?

[00:05:22] Stephen: It boggles my mind, all the things that are available to help contractors. I was in a meeting, at a customer's office and the discussion was with their new tech hire. this kid was the techiest person you ever met with an engineering, mindset. And they had a bunch of project managers sitting around and they were just talking to, um,what's one thing that's most frustrating that you do day in and day out that you could use some help?

One of them say, well, you know, I get stuff stolen, you know, I can't account for my inventory. Another one I'll say just, you know, I'm repetitively picking this pipe up and putting it here a lot of times I have to move it two or three times. But whatever the situation was during this conversation, the owner of the construction company was taking notes about every complaint that everyone had, deciding what he thought was most important, and categorizing, saying to the tech person, hey, what can you do to help? You got any ideas? 

Oh yeah. That's no problem at all. All right. Well. I want by tomorrow an idea of the cost and how long it'll take you to implement it. And then they check it up and follow up that it's done. But it was a really effective meeting, and that tech person really came up with some things that didn't even exist out there in the tech world, you know, off the shelf.

[00:06:40] Wade: Great. Well, I was just going to throw some of these technologies out there, and we've already mentioned BIM, which stands for Building Information Modeling. According to a study by Deloitte back in 2017, using Building Information Modeling can actually reduce overall project costs by up to 10 percent. That was amazing to me. But, you know, if contractors can learn to like, hey, we bid our project, but not give that 10% away, that goes a long way to building more profitable business. I thought that was an amazing statistic.

[00:07:18] Stephen: It is. and you can say, well, BIM's been around so long that, that's a given, and it's not.It's not a given that our listeners are using BIM. it's such a great model that helps in communication, sales, estimating, it's one of those fantastic game changers, if you're not implementing it, that's what I hear.

And it's been around for a while.

[00:07:43] Wade: Right. Well, you know, it's getting better and better with AI and that kind of stuff. Another study I looked at was these cloud platforms and project management and scheduling is getting so much better. Even back in 2019, there was a study by KPMG that said that, you know, getting a good project management solution, it can basically, they said they were reporting cost savings of two to 3 percent on total project value in that. So that's another place that we don't realize that if we're managing the projects better, that's a great way to save some more money and increase your profitability.

[00:08:24] Stephen: I think we told our listeners at the beginning of this podcast about the statistics we had to back up the comments and the stuff adds up. it's real and it's making a huge impact.

[00:08:35] Wade: Okay. I'm gonna throw a couple more out here.There was a study strangely by Goldman Sachs back in 2018, which I don't know what Goldman Sachs really has to do with construction. But they did a survey and they found that you can cut up to 50 of your cost using drones to do things like site survey and progress tracking and safety inspections. Can cut those types of costs by up to 50%. As well as saving a a considerable amount of time.There's augmented reality, the virtual reality,and these 3d immersive objects, whatever.In doing this research, I had seen somestudies about like helping, say your client visualize the job. And how they were using that to reduce change orders and lost time and those kinds of things. I know a lot of our contractors like change orders and they jack the prices up, but if you're in an industry where you've got like a less sophisticated owner, a lot of times they're going back and forth on change orders and it just, the job seems to drone on. 

The study I was looking at, if you're using like artificial or augmented reality or virtual reality, they said that up to 30% fewer design related change orders came out of that. AndAnd that was a 2019 study I looked at.

[00:09:54] Stephen: Isn't that the truth? We were talking about just simply meeting and communicating before the job at the design phase, how much talking to a subcontractor before you complete your design work and the design stage, how much that saves you. And potential change orders and savings and a better project.

I think we talked about this before the podcast, but you know, robotics and automation on the jobsite. We talked about AI automationbefore, but thinking about robotic bricklaying or 3d printed, those things are actually happening nowadays. It's amazing, but there was another study and, you know, basically this automation, the robotic bricklaying, that kind of stuff has the potential to improve labor productivity by as much as 200 percent for certain tasks. And I know you had gone down the road of saving somebody's back and saving workers Yeah, those robots that lay bricks. There's no back to be injured. I even saw recently, I, I forget who it was. I think it, I want to say it was Komatsu had a, underwater bulldozer. It was electric powered and it had a huge antenna. And it ran underwater and, the operator, like an operator of a drone, literally operated it underwater with cameras.

It had sensing devices because sometimes you're down there stirring up muck and you can't see where you're going. Literally, to be able to do site work underwater, the first thing that popped into my head was getting it out to our,fishing hole where we're trying to build a trophy fishing lake. How much fun it would be to have that thing to make it deeper and how much fun it'd be to operate.

But anyway, this technology is just absolutely amazing. The construction industry that used to be so demanding physically on your body and on the workforce is just getting, if there's any way to do it easier, smarter, better, the technology's out there, isn't it?

[00:11:52] Wade: Well, I think that's a good point and, you know, that was one of the other pain points that we were doing some research on, is the labor turnover and getting labor in. I've never heard of underwater bulldozers, but I guess you hearsomething new every day.

[00:12:07] Stephen: Yeah, it was fascinating, to see that in the office. Wow. What do they come up with next? You know, another thing, Wade, just briefly, we've talked about this before, about the GPS systems on grading equipment. For land leveling, for grading, every aspect of that literally built into the machines with GPS.

We had a claim

that it was, a little under 3 million dollar claim of a contractor customer doing a subdivision, did the grading site work according to the plans of the engineer, and engineer had not inspected properly.

And there was a little bit of fault on our contractor, but once, once the house has started getting built, they had a monster rain and realized, the whole subdivision was literally worthless. Of course, lawsuits start flying. Everybody gets sued. The engineer had made some miscalculations.

But after all was said and done, there were a couple of houses that had to be demoed. Everything had to be torn up, drainage, rebuilt, everything. 

How much of that went against the engineer? Well, the full amount of their error and omissions coveragewas paid, and it still wasn't enough. This is just how bad it was. So technology could have prevented that, Wade.

[00:13:27] Wade: Yeah, and I do remember that case study and you telling me about that as well. 

Let me finish going through a couple more of these.

There was one here I wanted to sort of get your take on. Our good buddy Rob Williams and his father were in this business, they were building houses at the time, and trying to do prefab, or modular construction many years back. You're probably more familiar with what he was doing. The technology is reducing the on site labor, eliminating weather delays, material waste. 

And by doing this modular type, you know, prefab construction, there was a study done by McKinsey and Company that said, you know, that you can accelerate your project timeline by between 20 and 50 percent, and reduce overall costs by 20 percent.

[00:14:17] Stephen: I remember Rob and his father having a trust manufacturing division where, you know, they were getting into the modular construction, prefabbing stuff to go in there and in units based on different house plans. They were really efficient at doing it and kind of pioneers at the time that that was kind of new at the time.

It cost them a lot of money before they started realizing a profit.

[00:14:43] Wade: I think that went back to the whole thing of contractors not really investing in R& D. I thought that was rather innovative of them. 

Next category I had was data analysis and using AI to be able to do some of the data analysis that you may have needed to get some math genius to figure out just a few years ago.

Some of the data analytics is mitigating risk, optimizing schedules, more of like real time project resource management. There was a study by Autodesk and, , another company, , back in 21, that said that using data analysis like this could cause a 40 percent reduction in safety incidents, which I know you probably want to key in on, plus a 15 percent improvement in on time delivery on a project. What's your thoughts?

[00:15:31] Stephen: I believe every bit of it. I've seen it happen over and over again. You know, just a simple use of what they call telematics in vehicles, dash cams, software that will shut down employees' cell phones so they can't text and drive. Just some simple stuff like that has just absolutely worked miracles, in the simplest possible way.

[00:15:54] Wade: I had a whole idea like, how can technology improve a contractor's life? And obviously, some of these digital tools I talk about all the time can reduce rework or speeding up billing cycles. The idea to be more profitable, if you can get that cash flow in the door, that's, we preach that all the time. There were some studies by The Construction Financial Management Association, a lot of this AI stuff leads to real time tracking of labor and equipment, and that can minimize overtime. Any thoughts on these? 

[00:16:27] Stephen: So many of them have to do with giving you, as owner or management of a company, an extra set of eyes and ears. And if you can automate that, then you're reducing losses due to human error, aren't you?  

[00:16:41] Wade: Well, here's another one I think you probably key in on too, but, you know, increased safety, reduced insurance costs by using wearables, which I believe they're talking about things like braces and things like that to help mobility. Help with worker fatigue. And what the study said is, 5 to 10 percent decrease in workers comp premiums from that. And I don't know if you can expand on that. I don't probably have a good definition of what a wearable would be.

[00:17:10] Stephen: Oh, well, wearables are everything from--

[00:17:12] Wade: Knee braces, back braces, that kind of stuff?

[00:17:15] Stephen: These braces and, this clothing that help you, be more effective with your lifting and regular movements. It just gives you support to that. 

And, yes, the main thing that the workers comp carriers are looking for, discounts are that technologically speaking, you have that technology in place to reduce workers claims. And I have so many customers say, how much discount am I going to get, Brown, on that?

I say, well, how much does it cost you when someone gets hurt? Let's just forget about the insurance paying for it. Let's talk about the fact that person that's not getting the work done, that's got to be replaced and someone else is taking them to the doctor or the hospital. Let's just talk about that, beside the workers comp costs.

But telematics, implementing that on your vehicles, I'm seeing 10 percent savings from a lot of carriers out there. That's some big money. 

And on workers comp, wearables, a lot of companies have switched from the hardhats to the helmets. Thank You very much. And also all the other safety gear that's involved with wearables. Also it's the tech that's involved to keep your hands free and continue to communicate, that's considered a wearable.

[00:18:25] Wade: Talked about like work life balance. Some of the stuff that I did in that other research was like the pain points and burnout for contractors. But, you know, trying to keep up with everything we know sun up to sun down and then some sometimes. And we already did a recent episode already on this, automation of things like administrative tasks can lead to fewer late night, you know, working up bids and stuff like that. 

So helping build predictable scheduling. And the point of the other episode that we did on that was the fact that I think 2025, AI and automation are coming together to a point where they are actually very useful and can save some time and money. 

[00:19:07] Stephen: You're exactly right. It's just t absolutely mind boggling to me, the things that are on the horizon and the things that are coming up. And a lot of times folks would stop implementing technology because they would say, well, it's going to be obsolete in a couple of years anyway. 

And those kinds of software programs are dead in my opinion. They don't exist anymore. Everything else is tied into something that already works. And the technology just makes it better, you know, more efficient. Even AI can write code now to allow you to develop a software of what you need. So how much easier is everything to implement?

I wonder.

[00:19:45] Wade: You know, one of the things I wanted to talk about was like, if you're trying to adopt some of this technology, how can we overcome some of the barriers to getting into it? And a lot of contractors think about this upfront investment in hardware or software training and all this stuff. But, you know, sometimes you can see, like automation is a great example. You may spend a little bit of time and money, but what can it save you as far as time and money going down the road? And getting somebody or even hiring somebody that can do that, I think is a great investment.

[00:20:21] Stephen: And not having technology really hurts your ability to attract a new or younger workforce.

[00:20:27] Wade: Well, like I said, again, some of the other things, you know, if you've got a skills gap. As you were just saying, you don't necessarily have to have, I mean, there are software out there that actually can write the code for you and create your own systems. And a lot of times they are a little intimidating when you don't know something, but get on YouTube and there's plenty of people out there talking about how to do this thing.

A lot of contractors are just resisting change. They've been doing the thing the same way, their culture, they're entrenched in the practice they've always done. And just remember if you're leading a construction company, it's got to come from the top.

[00:21:06] Stephen: Right. It's got to come from the top, and flow down, and you got to be humble and remember how hard it was for you to learn what you learned to do what you do so easily now. There was a learning curve. It took effort. It took concerted effort to learn your trade, to be good at what you're doing. And you just simply apply that same effort to this technology.

I mean, that's the way I like to think about it. It's all your attitude about embracing it, isn't it?  

[00:21:35] Wade: Let me throw out a couple of more just rapid fire. Cause I love my statistics. I'm a geeky bean counter.

Looking at the potential future impact. You know, there was a study by McKinsey again, that said like full scale digitization could save 700 billion to 1. 2 trillion annually. That's amazing. Obviously that's across the entire construction industry. 

There was a study that said robust project management tools could cut cost overruns by 15 to 25 percent. Better data management can cut in half rework costs.

Using the AI, robotics, BIM, that kind of stuff, could increase productivity in the industry by 50 percent. And last one I got on here was sustainability. And some of stuff like prefab construction, data analytics, that could reduce material waste by 20 to 30%. So I thought those were some good statistics to keep in mind.

[00:22:34] Stephen: I think most average listeners of ours would hear that and go, yeah, I can get that. I can visualize that. These statistics, they're sexy. I get it, Wade. You know, it doesn't take a engineer or an accountant's mindset to appreciate what small changes in technology can mean to big profits.

[00:22:52] Wade: Well, I think that's a good takeaway from this whole episode. And. If any of these statistics did resonate with you, maybe it's time to take a different look at what you've been doing in your business. If you're not as profitable, if you're not bringing home the money you want to bring home, that's just another way, possibly to get some more profit out of your jobs. So any other closing thoughts?

[00:23:14] Stephen: As always, your specific industry trade shows are going to have folks promoting the latest technology in your particular trade. That and your trade publications, information you receive, and that's a valuable source. But what I wanted to bring back again was just that meeting where they simply had a tech person there that knew what capabilities were.

And they stated the problems. The owner prioritized what he thought the problems were, and literally gave them orders of when and how he wanted to see something going along those lines to get that technology to decide whether to do it. Everybody agreed on it. I kind of ducked out of that meeting and wished I could have stayed another month to see how everything worked out.

[00:24:01] Wade: Well, I know we geeked out on a bunch of statistics this episode and I hope you stayed till the end. We appreciate it. We'd love to hear some thoughts, comments, where you think the industry is going. Put them in the comments below. We'd love to hear it as well as any thoughts on future episodes.

Always happy to entertain thoughts on that. If you would, as always, like, share, subscribe, do all that stuff that they always ask you to do. We appreciate you being here. We will see you on the next show.