Insights

Technology Shopping for Spending-Wary Contractors

 

Many contrators have been forced to rearrange priorities and adapt or modify their projects to survive the COVID-19 crisis. Technological tools — some of which have only become available in recent years — are critical in the current environment. But new technology costs money, and your construction company may not have the funds to make major expenditures right now.

One solution is to go slow and incorporate technology spending into your longer-term strategic plan. By buying carefully now, you may be able to reap the benefits of the latest innovations and also emerge from the economic downturn in sound financial shape. Consider taking the following four steps.

1. Buy Only What You Need

If you're like a kid in a candy store when it comes to new tech gadgets, get a grip before placing any orders. In this time of financial uncertainty, it's important to resist the temptation to buy anything you don't need right now. For example, don't be tempted by products offering bells and whistles that really aren't essential to your work. Instead, make sure any purchases are directly tied to projects that are going forward and promise to be profitable.

Be sure you thoroughly investigate potential tech purchases for long-term use. Say that a drone model you're considering is about to be replaced by an upgraded model. Does it make sense to wait to buy until the new model is available? And always comparison shop. If they want your business badly enough, some vendors may be willing to negotiate price.

If you're not an expert on construction technology, don't go it alone. Discuss any potential purchase with the employees who will be using it. Will it really help them or just complicate their lives? If you're making a large purchase, consider engaging one of our IT consultants to assist you with choosing and implementing the optimal solution.

2. Manage Your Apps

"Application sprawl" is a term used to describe a common situation in which too many apps demand too many IT resources. Many construction businesses regularly use 100 or more apps — and add new ones without first justifying them.

Ask whether you really need all your apps. Some may be rooted in your company's history and endure as legacies, even though they aren't that effective. Review current apps and eliminate those that you no longer use. Doing so could result in savings as you reduce the demand on your IT system's resources. Some workers may object to the elimination of legacy products they already know how to use, but it's important to do what's best for your business over the long term.

3. Strike Better Deals

Currently, the tech marketplace favors buyers over sellers. Therefore, you're likely to have some leverage over vendors at the bargaining table. As more construction businesses fold during the continuing pandemic, the market could provide additional cost-saving opportunities for the survivors.

Generally, the larger the overall contract, the better your bargaining position will be. If your business is financially stable enough, you might be able to negotiate a discount in exchange for a long-term deal.

4. Seek Cover in the Cloud

Millions of employees have shifted to working from home and other offsite locations, and the benefits of the "cloud" have only become more obvious. But contractors who already use the cloud know that it's indispensable for scaling up to support work on multiple job sites or scaling down to save money when projects become scarcer.

Remember that the cloud is a pay-as-you-go utility. Over-extending services usually relates to their historical use; old habits can be hard to break. The best way to manage costs is to develop and disseminate a policy that defines cloud use. Also put in place processes that automatically turn off cloud functions when they aren't being used.

When buying cloud technology, break up the deliberation process into analyzing, negotiating and optimizing. This is about more than just the upfront price. You also want to consider support services offered by vendors.

You Can't Opt Out

Technology is part and parcel of your construction company's success — there's no way to opt out of it. But you can avoid overpaying for tech resources that will be underutilized. Think carefully about what you need before you go shopping, and don't hesitate to consult our construction experts for advice.

 

 

© Copyright 2020 Thomson Reuters
All rights reserved