UK construction firms hampered by a lack of digital tools and innovation
New research of 250 senior procurement decision makers in UK construction firms reveals 31% are currently being impeded by a lack of digital tools and innovation.
When comparing the digital trajectories of other industries, from banking to travel, it’s clear construction has lagged behind. Just 1% of construction firms’ revenue is spent on technology, causing an over reliance on manual processes – halting progress and potential.
The research, commissioned by construction procurement platform YardLink, reveals senior procurement managers examine 11 different quotes before selecting a supplier, source nearly 170 pieces of equipment per project, and process 85 purchase orders per month.
However, the lack of digital tools available means 65% manage these processes using only basic spreadsheets, or pen and paper – creating inefficiencies that contribute to firms spending 44% (£7.4m per project) of their budget on the supply chain.
The research reveals further inefficiencies, including:
- In 30% of construction firms, CEOs and managing directors are still involved in purchasing decisions
- Firms are procuring equipment from suppliers located more than 60 miles away from site locations, adding to potential delays
Together, these inefficiencies have meant when senior procurement managers have gone over budget, they’ve done so by 46%. Moreover, 28% have experienced collection delays for equipment and/or services – driving frustration, project setbacks and inflating costs. These findings come at a time when 17% of the total number of insolvencies in July 2023 came from the construction sector, following high inflation and rising material prices.
Neeral Shah, Founder and CEO of YardLink, said: “Many of these inefficiencies actually represent opportunities for contractors and suppliers to work together to create a more prosperous future for the industry. It’s important to recognise that even small improvements could yield big returns. Yet, a mindset shift towards embracing technology will be key.”
Please find the full report here.
