The impact of technology in the construction industry has seen the industry reap good fruits as the application of technology advances. This has raised the question of whether technology in construction is a cost or an investment. Contractors are making huge gains in safety, quality, productivity and efficiency by investing in grading, payload and compaction technologies, telematics, safety systems and more. In this article, we offer an in-depth analysis of the impact of technology in the construction industry and why you should consider it as an investment not a cost.
Acquisition Costs
As a contractor, you need to do an assessment of the financial impact of acquiring the desired piece of technology, especially how this will shape your balance sheet. For a start, begin with calculating the purchase price or lease payment for the technology you’re evaluating then add in the labor costs associated with evaluating different products, reviewing multiple proposals and making a final selection. For a technology to be effective, we recommend that you go for a technology that offers more monetary benefit than the acquisition cost.
Deployment Costs
The technology purchased needs to be implemented in order to be useful. Deployment costs are costs you accrue as you roll out the technology to users installation, configuration, training. For a technology to be an investment, we recommend a cheaper alternative to install and run.
Maintenance and Administration Costs
These are the costs of keeping the new technology running and profitable for your firm. Included in the calculation are the cost of warranties, support contracts, licensing agreements, future upgrades and IT support staff. A particular technology will only be an investment if it costs less to keep running and functional.
Risk Management Costs
All new advanced technology comes with new challenges including the risks associated with using the particular technology in your firm. These risks need to be mitigated in order to ensure smooth running. The cost of mitigating these risks is one more factor to consider.
Conclusion
Technology offers a safer, more accurate and reliable alternative to the traditional methods of doing construction work. We recommend considering the above factors in assessing whether a certain technology is an investment or a cost.
References: Lorman, ForConstruction, BlogCapterra
