Thrive With the Information Advantage
The speed, volume, and variety of digital data produced in the construction industry continue to advance as more technologies are used in the design, planning, and construction phases. The need for construction businesses to uncover insights from the vast universe of relevant project data is a mission-critical task for the industry to achieve better productivity and quality outcomes.
Within a construction atmosphere of ongoing profit and time pressures, skilled-labor shortages, material price volatility, and shifting project trends, a systematic, data-driven decision-making process offers the potential to capture growth and improve performance.
Acquiring, understanding, and applying data insights to decision-making is linked with improved business performance. This article aims to help trade contractors, general contractors, and building product manufacturers understand the advantages of data-driven decision-making. The need to use data as a key decision-making tool has never been more relevant.
Before the digital transformation in construction, making decisions was less reliable, proving difficult to pivot with up-to-date resources, and more challenging to gather a complete picture with large data sets for a sound decision. Data were available to guide some decisions, but not in a way that was easily accessible or allowed for a deep discovery of actionable insights like today. One way decision-making flourished was through gut instincts, intuition, and the experience of business owners or key decision-makers. This approach—traditional decision-making—relies on personal opinion or limited information.
Reaching conclusions exclusively or largely from traditional decision-making routes is inherently risky. There remains a place for these types of decisions where the individual or organization does not have supporting data, time, or resources to analyze them. Since they are prone to subjective judgment, personal biases, and limited information, these aspects can lead to various risks, including undesired outcomes, suboptimal choices, and missed opportunities.
The risks of undesirable outcomes from traditional decision-making are far-reaching. The lack of structured data analysis and evaluation approaches can result in limited accountability, inconsistent decision-making, and an overall lack of transparency. If you’ve ever asked the question, “Why did I ever select that project?”, you know the dismal feeling of poorly selected projects.
Other factors that round out a complete decision-making picture may include business strategy, management practices, management of human resources, and relationship development, among others. Traditional decision-making can be slow and inefficient, relying on manual processes that can also increase the likelihood of errors. These risks emphasize adopting data-driven, evidence-based, and collaborative approaches to decision-making. Coupled with access to a large set of evolving construction project data and the know-how to extract the data you need, the choice is clear—a data-driven decision-making route is advantageous.
Data-driven decision-making is a modern approach to decision-making that relies on the use of data and analytics to inform and guide decision-making processes. Research has confirmed the connection between data-driven decision-making and better performance and productivity. Companies that use data and analytics to differentiate themselves in an industry are more likely to outperform the competition.
Driving the Right Decision at the Right Time
The advantages of a data-driven decision mindset are guided by a central principle—improving the chances of making the right decision at the right time.
The term big data typically refers to large and complex data gathered from various internet sources, like social media, customer feedback, and internal operations. It is a term that has both positive and negative associations from that perspective. But in the preconstruction realm, the growth of digital-based plans has produced its own large and complex universe of data.
Analyzing preconstruction data, or preconstruction big data analysis, in a general sense, refers to the process of examining large and complex data sets to uncover hidden patterns, relationships, and other useful information that can be used to make informed decisions.
Five Advantages of Data-Driven Decision-Making
Data-driven decision-making is more effective than traditional decision-making because it relies on objective data rather than subjective opinions or intuition. In other words, effective use of data helps businesses stop guessing and start knowing with confidence. Data can provide valuable insights and patterns that can inform the decision-making process for everyone—from the independent trade contractor to a regional general contractor or multinational building product manufacturer.
Advantage 1: Objectivity
One advantage of data-driven decision-making is the ability to make informed decisions based on evidence rather than relying solely on traditional approaches. Gut feelings, for instance, may be influenced by individual opinions or biases, which can lead to poor outcomes. In contrast, data-driven decision-making involves the use of data to objectively evaluate different options with rational and fact-based decisions as a guide.
Information can be interpreted in different ways, and it can be challenging to uncover meaningful insights without introducing personal biases or subjective interpretations. A data-driven decision-making process aims to minimize the impact of misinterpretation by revealing insights based on facts.
One of the key benefits of data-driven decision-making is that it can provide objective insights. When decisions are based on facts rather than subjective opinions, assumptions, or plain wild guesses, decision-makers are more likely to make informed and accurate choices. For example, Construct Connect Project Intelligence will identify projects that best fit a contractor’s business with personalized recommendations automatically matched and scored based on preferences. The objectively produced output eliminates guesses or assumptions because the results are solely based on data.
Advantage 2: Accuracy
Data-driven decision-making involves collecting, analyzing, and interpreting data and uncovering new information to help steer the choices you make. Identifying potentially profitable projects from a field of hundreds or thousands of potential matches is time and money prohibitive without the software tools and data available at your fingertips.
Your preferences for project type, location, and size can be defined, and search results can be presented in a matter of minutes or less. Consider just the number of road and bridge projects in the planning stage at any moment in North America. A data-driven decision-making process and systematic analysis of the results can reduce the risk of making decisions based on incomplete or inaccurate information, leading to more reliable outcomes.
Data-driven decisions improve the accuracy and speed of decision-making by using data to inform decisions, which decision-makers can use to reduce the risk of errors and make decisions more quickly. On-Screen Takeoff, for instance, and the add-on feature of the artificial intelligence-powered Takeoff Boost™, elevate the speed of producing takeoffs. Takeoff Boost automatically performs measurements 15× faster than with On-Screen Takeoff alone. The results are more efficiently produced takeoff data, which allows trades and contractors to focus on what matters most—analyzing the data, optimizing pricing, and winning more bids.
Advantage 3: Uncovering Insights and Trends
Data-driven decision-making helps users identify patterns, trends, and associations in data that may not be immediately apparent through intuition or experience. This can reveal valuable insights and lead to more effective strategies to win profitable projects using up-to-date information. Trend identification is also helpful in anticipating the needed construction skills and building product demand by location, building type, or project size.
Data-driven decision-making can identify patterns and trends that may not be immediately apparent. The preconstruction data world is vast, complex, and accelerating in size. Armed with access to project information such as ConstructConnect Project Intelligence, decision-makers can identify patterns and trends among the vast universe of data, that can help them make better decisions.
For example, a general contractor may define search criteria matches with predetermined areas known to be favorable to their skills, past project successes, and availability in their project pipeline. Search criteria for project-matching criteria may include project type, geographical location, project size, private versus public projects, and inclusion requirements. Pinpoint precision and the ability to access and analyze large sets of relevant project data provide a route to better performance through data-based decision-making.
Advantage 4: Better Risk Management
Finally, data analysis can help decision-makers identify, evaluate, and respond to risks associated with different options on a given project. With data-driven insights, decision-makers can make more informed decisions about the potential risks and benefits of a project. For instance, a building product manufacturer may use data from ConstructConnect Analyze to identify and evaluate the risks associated with a competitor’s product.
A thorough examination of the competitor’s product with the manufacturer’s own can reveal risk insights that an architect, owner, or general contractor values, providing the chance to make product recommendations and increase opportunities to be specified and sold. Besides a reduced risk for the build team, the building product manufacturer can enjoy improved sales results.
Advantage 5: Continuous Improvement
Monitoring and evaluating the outcomes of decisions that are based on data and using that information to refine and improve future decisions offers businesses a pathway for continuous improvement. Having based a decision on data, general contractors, for example, can learn from the successes of past projects to help understand what has been effective and what has not. Best practices can then be established to help ensure consistency in choosing which projects to bid on and accept, and how to get better from experiences that were not optimal for the contractor or the bottom line.
Data-driven decision-making provides a systematic and evidence-based approach to decision-making, leading to more effective outcomes, improved business performance, and better decision quality. Data-driven decision-making is a complement to other factors, such as expert judgment and industry experience, to make well-rounded choices.
Get the Most From Every Preconstruction Decision
ConstructConnect software solutions offer access to projects and deliver the tools and support to put preconstruction data to work for your business. Trade contractors, general contractors, and building product manufacturers use our software to identify new opportunities early and keep the project pipeline full.
Insights can be gained from the data we collect, store, and manage that would otherwise be impossible to uncover. By personalizing your search to meet the needs and preferences of your business, you have the resources at your fingertips to perform your best with data-driven decisions. Ultimately, analyzing data to make more informed decisions offers a broader view of how you choose to work, and get the most performance from every preconstruction decision.