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A recent report shows how costly bad data can be to the construction industry. In short, if construction CFOs aren't implementing a good data strategy, the lack of one could lead to serious financial consequences. Based on the data collected in this report, construction companies can benefit from the insights it revealed.
What is the cost of bad data?
On September 14, construction technology company Autodesk and management consulting firm FMI Corp. released a new report that studied the effects of bad data. Ultimately, the report concluded that bad data was behind $1.8 trillion in losses in 2020. Additionally, the study found that bad data could account for as much as 14% of otherwise avoidable rework — that's worth around $88 billion. Bad data included numbers that were incomplete, inaccurate, inconsistent, or untimely.
Among 3,900 international professionals in the construction industry who participated in the study, 55% stated that they had a formal data strategy in place to manage project data, while 30% disclosed that the majority of their data was bad and didn't provide any actionable insights. These numbers reveal the prevalence of bad data across the global construction industry.
The study's main conclusion was that while many companies are adopting technology in the construction industry, they can take steps to significantly increase ROI. If construction companies fail to implement a solid data strategy, the industry is likely to see far more losses that are otherwise preventable. The study also concluded that a large portion of bad data comes down to basic human error as opposed to intentional and malicious causes.
The benefits of a good data strategy
Implementing a solid data strategy is essential to avoid the pitfalls of bad data, it offers a layer of protection against economic and other types of damage that bad data can cause. According to the report, good data strategies enable CFOs and others to make more informed decisions. In fact, 12% of participants stated that they consistently standardize the methods they use to collect data, review the quality of their data, and generate reports around practices. Additionally, they make sure data is accessible to all relevant parties through a centralized solution.
The report further determined that for construction teams to perform at their best, managers and others need to be able to effectively manage and analyze the data they collect. Otherwise, bad data could lead to inefficient operations and inconsistent data across teams, contributing to disorganization and potential financial losses. Maintaining good data and practicing equally good data management will help maximize efficacy and profitability.
Enable your company to flourish
Construction companies benefit largely from good data strategies that eliminate the risks associated with bad data. This is why it's necessary for CFOs and other managers to work with vendors to decide on the best practices and solutions for data collection, management, and reporting. Taking the time to implement a solid strategy can help ensure your company gains a competitive edge while drastically increasing potential earnings.
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