Are Construction Firms Investing Enough in Technology?
According to Gartner, Construction companies with under $250M in revenue spend 1.6% of revenue on Information Technology. Construction companies with $10B in revenue on average only spend 1.1% on IT (1.6% - 1.1%). The construction industry is dead last in IT spend compared to 14 other industries measured by Gartner with National Government (10.8% - 7.9%) and Banking (7.3% - 6.2%) leading the way in IT investments.
This, is really bad. Perhaps there are better benchmarks, but I suspect that other industry IT financial benchmarks have similar rankings.
For companies that are struggling through the construction recession, under spending in IT may be a bad shortsighted strategy. According to Gartner's analysis of a report from the Bureau of Labor Statistics, 70% of U.S. productivity growth comes from IT. So under investing in IT for extended periods of time can put firms at a disadvantage against competition and may introduce risk if IT systems are operating passed end of life. Gartner also reports that 30% of net income is affected by IT economies of scale, so technologies optimized across the workforce may also improve profitability.