There are three levers of the construction industry: Man, Machine and Money. Understanding how these three interrelate and impact one another is like constantly asking yourself which came first, the chicken or the egg.
But this isn’t the 1990’s. Thanks to technology, we are finally able to draw more meaningful insights between the three. We may even be able to answer that age old question!
Integrating data across every facet of a business isn’t just about sharing information, it’s about integrating data to create new information. New insights. Specialised software can process and analyse data at a pace and volume the human mind will never be able to, so it makes sense to make effective use of it for our businesses as well.
Many businesses have been stuck in the tradition of analysing Man, analysing Machine and analysing Money. But what if we could pool all the information together and draw connections between the three?
Many construction companies are still not fully leveraging the power of software technology within their business. Some of the most typical functions are still being overlooked and treated as reports, rather than insights.
Take payroll for instance. In yesteryear, payroll involved a payslip and related simply to costs. In our world today, payroll is far more complex. When analysed against Machine and Money, it can provide insights, not just a report of Man.
Payroll exists on three levels; cost, budget, and accounting. Once the data is integrated across these three platforms, we can transform a simple payslip into intelligence that tells us who was doing what, where they were doing it and for how long. And so, we start to see not just the interplay between Man, Machine, and Money, but the insights of how a subtle difference in one at a certain time of day, can affect the others.
Imagine the understanding you can create for your business:
- Do you have the right labour skills on the job on the right day?
- Do you have too many labour resources in one area and not enough elsewhere?
- Where they productive? If not, why not?
- Does it matter what time of day it is?
Knowing this can help you make provisions for that cost.
Labour is the largest variable in construction. So much so, you could argue it changes every hour. With 40-60% of construction costs being labour, you can’t afford not to generate these insights. It’s like turning a black and white movie into technicolour.
Now, you’ve transformed your site, consider the impact for your management team. These insights can enable your management team to make smarter business decisions, and create better business outcomes.
The role of the commercial manager suddenly changes. Instead of interrogating costs after they have occurred, he is able to be on-site assessing productivity in real-time and making instant changes that generate higher efficiencies on a day-to-day basis. Equally, the procurement manager is able to carefully monitor volumes purchased and ensure that no unnecessary wastage occurs.
But whilst Man, Machine and Money are interrelated parts that greatly affect the success of a construction project, we’re also starting to redefine the roles of these three players.
For instance, the term Machine should no longer be confined to the construction machinery on-site, it should include software and technology at HQ – or in the palm of your commercial managers hand.
Thanks to technology and software, automation, activity tracking, data analytics and reporting can relieve man of menial tasks. Consequently, man becomes more useful and productive, and is able to apply his human intelligence to strategic decision-making. Now consider the impact on money (or earned value budgeting) when man is more valuable per hour.
The reality is, every business is now a software business. This is the start of transforming the construction industry and drawing much more meaningful links between Man, Machine, and Money. Isn’t it about time the industry as a whole, started catching up and realising the huge advantages of specialised software and data analytics.