Iceberg Economics: The hidden costs of manual work in construction

Learn more about the hidden cost of manual work and how AI applications can free your team up and boost margins.

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“To avoid the pitfalls of manual work and the hidden costs lurking beneath the surface, construction companies must embrace automation and efficiency.”

One of the most important places to start on the AI journey is by automating manual work that takes place in a business today. Automation may not garner the attention that predictive AI or generative AI is awarded, but it is far and away the most economical implementation of AI today. Eliminating manual work has a cascading effect in your business: when humans are no longer required to perform rote tasks, it frees teams up to plan better and find opportunities to improve margins. A compelling perspective to consider the influence of automation on a business is to employ the imagery of an iceberg as a visualization aid.

Tip of the iceberg: When companies rely too heavily on manual work processes, they're essentially operating at the tip of the iceberg. It's akin to flying blind, with insufficient visibility into the depths of their operations. This often leads to a frantic scramble of hunting and gathering for information, exacerbated by a shortage of manpower. The consequences of this approach are dire: an overwhelming sense of throwing bodies at problems, resulting in wasted hours, bloated overheads, and employee dissatisfaction.

Middle of the iceberg: In the midst of this chaos, throwing bodies at problems only serves to mask underlying issues. There's little time for proactive problem-solving, and solutions are often sought only after the damage is done. Consequently, crucial issues slip through the cracks, leading to costly mistakes, missed opportunities, and a skewed sense of priorities. This reactive approach exposes the company to risks, fuels internal confusion, and ultimately leaves customers dissatisfied.

The deepest depths: As the iceberg descends into its deepest depths, the true impact of manual work becomes starkly evident. Costly mistakes begin to erode the company's fee, eating away at profitability and stability. With fee erosion comes the ripple effect of unpredictable cash flow and an unknown working capital, leaving the company vulnerable to financial turbulence. Suddenly, saying no to potentially lucrative opportunities becomes a painful necessity, leading to shareholder dissatisfaction and eroding confidence in the company's ability to deliver results.

Embracing Automation and Efficiency

To avoid the pitfalls of manual work and the hidden costs lurking beneath the surface, construction companies must embrace automation and efficiency. By investing in technology solutions that streamline processes, automate repetitive tasks, and provide real-time insights, companies can gain greater visibility into their operations and proactively address challenges before they escalate. By navigating the iceberg with foresight and strategic decision-making, companies can steer towards smoother waters, ensuring sustainable growth and profitability in the competitive construction industry.

Perhaps you've encountered this narrative before, leading you to invest in software solutions to address these challenges. Yet, despite your efforts, you may have found yourself disillusioned by first and second-generation software that seemed to exacerbate rather than alleviate the problem.

This underscores a critical truth: these issues cannot be remedied solely by implementing a better accounting system or deploying a flashy dashboard. What's needed is a holistic approach that enhances orchestration within the business, empowering you to do more of what you do, but faster, more cost-effectively, and with greater data-driven insights. The solution lies in leveraging technology to augment your capabilities without the need to expand your workforce with armies of accountants, analysts, and engineers.

This is the pivotal juncture at which the construction industry finds itself. It's not just about adopting new tools—it's about fundamentally transforming the way we operate, leveraging automation and intelligence to navigate the complexities of modern construction projects with agility and precision. Only by embracing this paradigm shift can construction companies chart a course towards sustainable growth and long-term success in an increasingly competitive landscape.