According to Deloitte, there are five construction trends construction professionals need to watch in 2023, and depending on which construction sector you fall into, the trends may affect you differently. We’ll examine each construction trend today and explain how implementing a modern construction ERP—like Acumatica Construction within Acumatica’s comprehensive Cloud ERP solution—can help you overcome any challenges these trends may bring.
1. Industry Unrest and Increased Competition
High inflation, rising interest rates, supply chain disruptions and labor shortages continue to dog the construction industry. On top of this, increased competition and the cyclical upswings and downturns of each construction segment further foment industry unrest. Add in what Deloitte calls “substantial backlogs (specifically in energy-related construction and data centers),” and indications of an economic slowdown, and you have a number of circumstances challenging your ability to be efficient and profitable.
With a construction ERP solution, you have an industry-specific tool designed to help construction companies address these and other challenges by providing visibility into every aspect of your business, from costs, payroll, contracts and schedules to budgets, change orders and compliance. Data from every department streams into a centralized database, which provides a single source of truth that is accessible by every team member—whether they’re in the office, in the field or anywhere in between via web-enabled devices.
In terms of a potential slowing of the economy (e.g., a recession), construction software can help you mitigate its impact, something Sanket Akerkar, Chief Revenue Officer, Acumatica, addressed in “How to Prepare for a Recession with ERP.” In his post, he offers effective recession-beating strategies possible with an ERP solution, including:
- Cutting costs within your organization by identifying unprofitable sectors
- Paying off your debts and building up a cash reserve
- Ensuring you have access to short-term funding
- Broadening your marketing efforts to reach a wider audience
- Reducing your inventory to increase cash flow
- Informing your team through open communication about the plan for remaining solvent during economic hardships
As Sanket writes, “Knowing how to prepare for a recession, and understanding the importance of doing so before the recession happens, gives you a distinct advantage over competitors. While they frantically try to figure out how to respond to the economic crisis, you will remain calm knowing that your business—which is resting on a modern cloud-based ERP solution—is able to withstand the storm.”
2. Increased Margin Pressure
Deloitte’s engineering and construction outlook stems from its August 2022 survey of more than 100 US executives and other senior leaders. Based on their responses, the ongoing supply chain disruption is one of the biggest challenges they’ll face this year. The report authors note: “These disruptions have raised material costs, confined production, and restricted freight movement.”
Deloitte indicates that construction companies are turning to advanced technology, taking an ecosystem approach and focusing on supply chain management as ways to manage the ongoing supply chain concern and its effect on your bottom line. While these are excellent options, implementing advanced construction software can help you do all of this and more.
For example, project managers have visibility into what resources and materials they have on hand before a project starts, which ensures they have what they need, when they need it. Construction software also helps business leaders assess supply chain risks by providing complete, real-time data they can use to make informed decisions, diversify vendors, find varied distribution locations and tap into different labor teams.
3. Rethinking the Workforce
In addition to supply chain disruptions, workforce concerns (e.g., a tight labor market and exiting workers) were cited by 82% of the survey respondents as a major challenge for 2023. Some of the main labor issues stem from an aging workforce and competing with industries that are not physically taxing. Per the survey, 91% of those surveyed “agree that offering a flexible and agile workforce structure can help E&C companies to attract and retain talent.”
Offering flexibility and agility can attract and retain talent. But so can providing workers with a contemporary ERP solution that helps them streamline communication, automate workflows, collaborate with project alerts, store project drawings within a centralized solution, manage change orders easily and so much more.
The Deloitte authors note: “[T]echnology adoption and innovation could help attract employees with new skills and roles such as data scientists and retain workers by encouraging them to work with cutting-edge tools.”
4. Continued Investment in Emerging Technologies
Today’s construction professionals are leveraging emerging technologies and embracing the importance of undergoing a digital transformation in order to remain competitive in the digital world. Over half of the survey respondents would “likely invest” in artificial intelligence, digital twins, BIM, visual intelligence, the Internet of Things (IoT) devices, robotics, drones and other technologies this year.
Investing in construction ERP would fall into the emerging technologies category. Software built for the construction industry brings together financials, job cost accounting, project management, payroll, inventory, service management and more into a single platform. With visibility into business-wide operations, you can increase collaboration, streamline time-sensitive processes and increase project profitability.
In addition, you can:
- Track projects in real time
- Eliminate costly delays
- Access the ERP remotely from anywhere and at any time
5. Building Sustainably
The last of the 2023 construction trends centers around sustainability. Calls for building green have increased as customers focus more on climate change, the need to reduce waste and decrease energy usage. But Deloitte indicates that a “lack of integrated visibility in their processes and with subcontractors” makes setting and achieving such sustainable initiatives as well as remaining compliant with a complex network of reporting regulations, ratings and disclosure frameworks difficult.
Integrated visibility is an ERP solution’s superpower. With a 360° view of your entire organization, you can establish, monitor and ensure that you meet—and exceed—your sustainability priorities.
Navigate Volatility with NexTec Group and Acumatica
Ultimately, Deloitte says you and all construction professionals need to be prepared to navigate volatility. The authors also write: “Where companies invest, how they approach project delivery, and how they differentiate themselves in the market is important as the industry becomes more competitive in 2023.”
With nearly 30 years of experience, NexTec Group understands the importance of investing in the right software. We specialize in industry-specific technology that can help you manage your business, and we believe navigating volatility and differentiating yourself is possible with Acumatica’s construction software. Our expert consultants can help you implement Acumatica’s modern Cloud ERP solution, which will enable you to operate efficiently, establish strong customer relationships and ensure you complete your projects on time and within budget in the midst of 2023’s key construction trends.
To learn more about NexTec and Acumatica, contact our experts with any questions or to schedule a live product demo. We’d love to chat.