A Framework for Data Transparency in Construction
Construction is a fragmented industry. Increasingly complicated supply chains and build programmes can make understanding what is happening at each stage a difficult task.
Internal data from one stage of a project can hold much greater value when exchanged with other operations. Capturing data in this way will provide more insight into the performance of the built environment. This should lead to a reduction in waste, both in time and money.
This article looks at why and how data transparency across the construction supply chain can transform your operations.
- Challenges with data transparency in construction
- Benefits of data transparency in construction
- Where to start? Asking the right questions about data
- Building financial data transparency
- Building project data transparency
- What does data transparency cost?
- How to roll out data transparency
- Protecting your data and disaster recovery
Challenges with achieving data sharing in construction
Construction projects are not built up of separate linear activities. It is an interconnected network of activities that all affect one another's success. A culture of transparency will only be possible with a shift in mindset
Breaking down the industry's siloed mindset starts with tackling these challenges:
- Competitiveness – Often companies view data as a competitive tool rather than a resource to share. Building trust in others to exchange equally helpful information will help to beat the prisoner’s dilemma.
- Privacy and governance – Different sized companies have various levels of resources and regulations. Smaller companies may struggle to put together sharing agreements but are still vital to the industry. Whereas larger companies may have the resource but have higher regulatory requirements.
- Standardisation – Every construction site and project is different. This can hamper the quality of data being shared as it will come in varying detail and formats. What information is needed at each stage and how should it be presented?
- Infrastructure – Paper-based processes and Excel spreadsheets create barriers in communication. Digital tools will help with accessibility and ensure that everyone has the most up-to-date information.
- Resistance to change – People are used to working a certain way so data sharing is a change that will come with resistance. Learn how to overcome resistance in 4 steps.
- Data skills – The quality of data depends on how it is input into the system. Data literacy is not part of everyone’s skillset and training may be necessary.
Benefits of data sharing in construction
96% of data goes unused in the engineering and construction industry. 90% of the data generated is unstructured.
Harnessing the potential of this data would lead to many benefits for the sector:
- Efficiency – Sharing data would diminish duplicated workload and rework. Resulting in faster, higher quality project completions, saving money and improving company reputations.
- Better informed decisions – Decision-makers with access to a wider pool of trade knowledge gain a deeper understanding of the industry.
- Greater accountability – External pressures and competition from other teams drive a higher quality of work.
- Enhanced safety – Greater visibility over all operations and plant will improve safety at site level. Data gathered on materials and building safety will improve infrastructure overall.
- Sustainability – Collecting information on carbon emissions and waste at each stage will drive better sustainability practices.
So, if you are a business or team leader in construction and trying to make the best of your data, read on.
Where to start? Asking the right questions about data
The first thing to do is to determine what data you have, the data you need and what your existing processes are for sharing and analysing data.
This is an important step towards building data trust. It will show you the gaps you have and reveal any process issues you have within the business.
You need to have a clear understanding of what you want the data for. Why are you collecting it? Is there a specific problem you are trying to solve? These questions will give you a clearer view on whether the data you have collected is fit for purpose.
To ensure robust data collection and analysis, you must set explicit and measurable objectives. With estimating data this might feel difficult on the face of it, but it is possible to set some broad standards. These might include:
- Using a Tender Price Index (where available) for an independent view on costs
- Modelling all costs against previous jobs for benchmark purposes
- Including Gross Internal Area (GIA) and Net Internal Area (NIA) measurements for jobs to help model project parameters
- Defining who has responsibility for data collection and quality
- Documenting notes on where costs deviate from expectations, for example, ‘we negotiated a better materials price directly with a supplier’
This allows you to define your approach to how your business will use the data. It also lets you filter out unnecessary data that does not fulfil your needs. The aim is to create absolute clarity around the data you use regularly within the business.
You can also work through the above process in reverse. For example, you may be generating data as part of another requirement but not using it. This could provide ideas that lead to gains elsewhere in your business.
It is also worth noting that there is a cultural change happening with data. Transparency and openness are higher up people’s agendas. As this perception change takes place at a societal level, people will expect their workplace to follow suit.
How to make construction estimates more accurate in six steps >
Building financial data transparency
When it comes to cost data, there may be some commercial sensitivities. However, you don’t need to keep it in silos.
Consider what data you can share. How will it help partners and collaborators to deliver better project outcomes together?
This could include more transparency around labour rates or material costs. The larger the project, the more data that is available. This allows for greater trend analysis, which can reveal possible savings and efficiencies.
When it comes to the internal side, there should be no excuse. Open data principles should be in place, such as:
- Make data available to all
- Keep data up-to-date and comprehensive
- Ensure it is easy to use
- Make it easy to compare across multiple programs and formats
Making data available in this way leads to greater accountability. This drives improvements in business performance, revealing potential routes for innovation and growth.
Ideas and improvements can come from all levels of the business. Allowing access to the rich amounts of data available will help everyone work together much more effectively.
It is important to note at this point that as a business you should be focusing on primary data. This is under your control. If you have generated it and understand where it has come from, it leads to greater data integrity. It is much easier to trust something that you know.
Building project data transparency
Estimators and quantity surveyors have to work with more than cost data. They need to bring together multiple packages of information covering the whole project, from drawings and specifications to sub-contractor information.
Of course, costs are a major part of all the above. If there is failure in the way that this information is stored, tracked, compared and analysed, it causes problems.
Many parts of this data gathering also involve judgment calls and making assumptions. Some of this is about managing expectations, with contingency added to projects. Labour and materials costs often fluctuate. There is always the chance that something unexpected will happen on-site, affecting build time and cost.
If the person or team responsible for the build process is not managing it properly, it puts strain on supply chain trust. People must be held accountable for the data they produce.
How much does data transparency cost?
Cost data should not cost the business. With any new process or approach, there is inevitably a concern about investment.
How much time and money will it take to bring data to the forefront of the business? The answer is not as long or as much as you might think.
Many software solutions are based in the cloud. Comprehensive training materials and technical support are available, making cloud solutions simple to roll out.
The bigger cost comes from poor data management. Getting accurate data in place is critical for making decisions about projects. Accurate data helps maintain financial viability and avoid costly mistakes and overruns.
If, for example, you cannot effectively manage cashflow, you may have issues paying for labour on time. If quotations aren’t easy to compare you may end up spending too much on materials.
If you do not use information from a business management perspective, then you may be making decisions based on “gut feel” or assumptions. This may work for the odd decision, but is not a long-term strategy.
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How to roll out data transparency
That said, data is not just numbers in spreadsheets. There is a place for insight and experience, especially in cost estimating.
Understanding real-world influences on construction will hold you in good stead.
With that in mind, involve your teams in the process of determining data use and reporting. Afterall, they will be the ones managing it on a day-to-day basis. You will need their buy-in to ensure data quality as bad inputs lead to bad outputs.
You also need to invest time in making data look easy to understand and attractive. Dashboards and infographics will make data much easier to use and more accessible. People respond better to a good user experience. Employees will appreciate anything that helps them to comprehend data, allowing them to get the information they need quickly.
Build transparency in your supply chain, find out about the business health dashboard.
Protecting your data and disaster recovery
Protecting data is especially important the more open it becomes. A crucial step in building data transparency is putting security measures in place.
Backing up data should be the minimum standard. Ideally, this should be to the cloud using a Backup as a Service (BaaS) provider. This offers more stability, is more accessible and is managed more frequently.
An additional layer available to businesses is Disaster Recovery as a Service (DRaaS). This helps organisations get back up and running as quickly as possible. It means that people can work from anywhere in the event of a crisis and still have the resources they need. And, because the data is synchronised regularly, it will be up-to-date.
Data and systems are essential for the modern business. If they fail, there is a period of downtime. The impacts often include productivity issues, loss of earnings, and reputational damage. Even financial sanctions and fines can sometimes be a factor.
When it comes to cost data, that can mean your audit trail, your benchmarks, one of the key pieces of intellectual property your business has, or the loss of essential information about your staff or subcontractors you employ.
It is a critical issue to consider as part of your wider software and system strategy. It would be a shame to spend all your effort getting the right processes and systems in place, only to fail to protect them. If disaster strikes, you will have to go back to square one.
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