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Why is the construction industry reluctant to adapt technology?
There has been a historical lack of investment in technology in the construction industry
What you need to know:
- The construction industry is one of the oldest in the world, alongside others such as mining, agriculture and steel.
- You would expect that such an ancient industry that has expanded through the years in a constantly changing world would be very quick to adapt to change.
- On the contrary, this sector is often accused of being stubbornly rigid and slow to embrace change.
Linus Wahome, an IT expert and the Founder of Manpro Systems LTD, joined the construction industry four years ago after noticing that quite a number of contractors were constantly busy running cash-flow-heavy businesses, yet complaining of low profitability and lack of money.
Though many contractors would have pinned the low profitability to the high cost of materials, diminishing profits in the industry or other unavoidable circumstances, Wahome saw a strong link with information management issues. Projects were managed manually, and by the time the contractors realised they were making losses, there was no way to recoup.
“The industry is very reactive on decision making because projects are managed manually. I think with technology, contractors can easily detect potential losses, delays and variances and therefore act in time to save money,” says Wahome.
With this knowledge, he designed Manpro, a tech solution tailored for the African construction market. The construction management system, Manpro, is an award-winning tool lauded for its ability to control cost.
The tool helps contractors avoid cost overruns through real-time tracking and reconciliation of actual construction costs, material usage and labour productivity with alerts on any potential deviation from estimates before they happen.
Shocking reception
“This being my first tech product for the construction industry and having deployed tech solutions in other industries such as the finance sector where technology is easily adopted, I expected a warm reception from construction stakeholders where the business case for the technology is very apparent, but I was wrong,” says Wahome, noting that perhaps this is because this industry is one of the oldest in the world, therefore certain things have been cast in stone.
In addition, decisions typically involve multiple stakeholders, which makes getting everyone on board quite challenging. The biggest excuse most contractors present is that technology is an extra cost, but they do not realise that they lose more without the right technology in place.
For instance, it is very difficult to curb the theft of materials and avoid ghost workers or idle labour when tracking things manually.
“The winners in this industry will be those who use technology to become more efficient in cost management and resource utilisation because then they can be competitive in their pricing,” argues Wahome.
Warming up?
But despite all these challenges, he notes that there are significant wins as the industry warms up to tech.
Vaola Amumpaire, is the founder of Wena, an online based construction and home improvement platform that offers its users a great experience in shopping, design, material estimates, connecting with peers and professionals for their projects in real-time.
Amumpaire was inspired to start this virtual platform after reading so many stories about how the Ugandans in the diaspora were losing millions to fraudsters after contracting them for construction projects.
“One of the extreme stories was about a man who killed his wife after coming home and finding that she squandered the money sent for construction while working in Somalia. I started thinking of way I could eliminate third parties which would solve all these problems,” Amumpaire recalls.
“I got my first order from a friend in 2019 and he bought a tape measure. Unfortunately the tape measure I posted in the photo was much more expensive than what I had quoted. But because I had already blundered, I had to offer a discount for me to make that sale which means I made a loss. It took time for me to be able to buy items at their prices and deliver them at a profit. I also learnt an important lesson that the pictures had to be exactly of what was on sale,” she says.
As a pioneer of selling construction materials online, Wena got a positive reception. This is because of the convenience and great prices offered, but just like any new things, some construction materials manufacturers do not understand it yet.
A user can access the services through the website or download their application where you can place orders and pay virtually. The platform also signs up both individual professionals and companies to make sure customers are connected with the right people.
“We get data from them and proof of what they do to avoid fraudsters. When there is some proof missing, the profile cannot be activated,” she explains about the vetting process to be listed on the platform.
So far the app has been used by more than 5000 and boasts of more than 600 vendors. These range from people that sell sand, stones, timber and others.
Wena has had its high sand lows. The lows include having to convince Ugandans that a transaction can fully be done online. Some customers place orders s and easily change their mind about it after preparation for its delivery has even started, leaving losses and disconnections.
“We can only hope that people will get an appreciation of the digital space and policies are put in place to secure digital businesses,” she says.
Vaola Amumpaire, is the founder of Wena, an e-commerce platform. Photo/Promise Twinamukye.
Chaotic informal sector
Just as Wahome, Alex Kamanga, Founder and CEO, Fundis Inc., also gained interest in the construction industry after noting glaring inefficiencies in this space.
Kamanga trained as a legal professional but later transitioned to entrepreneurship. His first business involved labour subcontracting, and entailed linking contractors with casual labourers, popularly known as fundis.
The inspiration to set up this business came from seeing big construction projects being contracted to foreign contractors between 2015 and 2016. He often wondered whether the informal fundis had a chance of surviving these changes, and along the way, he decided to try and formalise the informal construction sector, which accounts for the biggest percentage of labour in the industry.
“Fundis are hired and fired casually, which makes their professions, be it plumbing, painting, masonry, roofing or woodwork, unpredictable,” says Kamanga.
Being in the construction industry as a sub-contractor was like a lens that would help him further identify other shortcomings in the industry.
“I noticed that most were hired on site and the contractors or project managers did not have time to verify their expertise since they don’t show up with their CVs. Should they hire inexperienced workers, they will only realise this hours later, after wasting time and construction materials.”
But this is not the only shortcoming he observed.
“A technician can be contracted to work in Kileleshwa, when he lives in, say, Membley. This means they have missed lots of jobs simply because there is no platform that alerts them of projects near them,” observes Kamanga.
That is how his app, Fundis Inc, came about. He wanted to create a platform that addresses these shortcomings. The platform targets contractors, homeowners looking for specific technicians, and service providers relying on the informal construction sector.
The artisans are identified, trained, and certified and their credentials are captured under their profiles on the app, such that those looking to hire can make informed choices. As it turned out, those they approached were unwilling to pay for the solution. They realised then that the construction industry viewed those in tech with suspicion.
Explains Kamanga, “Some wondered whether we were just data mining to report to the tax collection authority. In addition, the industry is closed, with a lot of barriers to entry. I think it will take an ‘outsider’ to pinpoint challenges that slow down the industry’s growth, but unfortunately, the industry is not very welcoming.”
Though the commercial real estate sector and tier-one contractors with big projects have been very receptive to the platform so far, Kamanga notes that smaller contractors have been the hardest nut to crack, yet they are the most critical decision-makers.
The silver lining
There has been a historical lack of investment in technology in the construction industry. A recent report found a lack of training or staff to support the technology was driving much of the tech resistance found in the construction industry today. On the bright side, fundis, especially the younger crop, have been very receptive to the app.
Kamanga and his team have further focused on working with 18 to 35 years-olds, while creating more opportunities for young women, and providing digital literacy skills to the older folk, whom, he says, have an underappreciated wealth of skills and knowledge.
The app is not only providing a tech solution but is also bringing some order into the informal sector that has been disregarded for a long time.
Advice
Looking ahead, Alex Kamanga, Founder and CEO, Fundis Inc.says the construction and the larger property industry should be more open to technology.
Across the world, the construction industry is using digital technologies to increase efficiencies, boost productivity, drive down costs, and give workers back valuable time.
“It still baffles me that we have failed to efficiently digitise the land selling and buying industry. There is a lot technology has to offer. For instance, geo-tagging can help triangulate and locate parcels of land remotely.
Approvals for buildings can also be digitised easily. Buying property and building should not be as scary as it is now in,” he says.
