What are the obstacles to productivity in construction?

The study, conducted among 825 global construction decision-makers, shows that nearly half (41%) of all construction and engineering projects exceed both budgets and planned completion dates. Most projects (54%) also fail to meet planned margins.

There are too many unintegrated enterprise solutions

The study reveals that construction professionals use an average of nine separate software programs to manage their businesses and projects. This technology stack unnecessarily complicates their work and is a major obstacle to project and business efficiency.

Indeed, when these same people were asked what they would look for in their next enterprise resource planning (ERP) system, they favored flexibility: they want software solutions that allow them to add and remove features as their business evolves. In fact, 63% of them indicated they plan to update their ERP solution within the next two years.

Agility as a driver of growth

Looking more closely at the motivations of those looking for new ERP systems, the most frequently cited reason for re-evaluating their current system is the need to improve their agility to better grow and diversify their business (25%).

This directly aligns with respondents' long- and short-term initiatives: 39% of respondents consider business growth and market value to be the most important long-term priority. Meanwhile, 30% of respondents believe improving digital maturity and leveraging data more effectively are immediate priorities for their business.

With ambitious large-scale construction projects to modernize public infrastructure being planned or about to begin around the world, the future looks bright for the construction industry. However, to meet the demands of tomorrow, the sector must adapt today.

In construction and engineering, the proportion of off-site work is increasing. This industrialization is supported by digital transformation, which is generating standardized processes to enable more profitable projects to be completed in less time. By reducing the seasonal peaks typically observed in this sector and offering other options such as service, rental, and maintenance management, construction companies can open up new revenue streams.

Building the future

"The construction industry is in a unique position. With its resistance to change impacting results, traditional tools and processes are disappearing," says Kenny Ingram, Vice President, Construction & Engineering at IFS “In the study, construction companies themselves report that project delivery speed (35%) and on-budget performance (35%) are the main differentiators from the competition. It’s clear that without the right tools and processes, they will fall behind in the market. There’s a huge opportunity for this sector to leverage industrial AI in their operations as these companies take critical and expected steps to modernize their technology stack.”

At IFS, we pride ourselves on delivering more than just technology: we deliver real impact. The construction industry tends to take a wait-and-see approach to technology, wanting someone else to take the lead before implementing it themselves. Construction and engineering leaders who are more digitally mature than their competitors will have an advantage, but it's not just about having the right tools. Knowing how to implement them, how to use them, and how to make the most of the data flowing through your business will be the deciding factors. This is how we help our clients become leaders in their field.

Study methodology:

Censuswide surveyed 825 senior decision-makers at construction and engineering firms in the UK, US, France, Benelux, the Nordics, Australia and the Middle East in October 2024.