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Construction industry’s digital transformation

The construction industry has been in the spotlight for a while, from Making Tax Digital to Net Zero Targets, the industry has been a focal point for the UK government. As the third biggest industry, it’s easy to see why there’s an even greater emphasis on it.

This intensified approach means processes, procedures and paper trails are becoming increasingly scrutinised, leading to a higher demand for procedural refinement. As a result, construction firms are now being held accountable, by increasing efforts to encourage accurate environmental reports, ensure transparency around tax records and minimise the number of disputes. For firms with disparate spreadsheets and non-existent paper trails, it’s time to take charge and adapt.

According to advice published by ERP construction software experts, RedSky, investing in digital systems is one way for firms to stay ahead of the competition. In fact, it’s likely to offer construction businesses an element of future-proofing, especially as more focus is placed on them and similar industries. Firms that fail to adopt a compliant software solution risk losing out on projects to their competitors.

What can going paperless do for construction firms?

  • Improve communication and remove inefficient systems
  • Prepare firms for regulation and legislation changes
  • Allow firms to compete for higher-priced contracts
  • Keep businesses accountable for tax and environmental impacts

Improved communication

The majority of construction firms oversee a highly complex network of suppliers, contractors, and employees all with differing requirements. Due to the nature of many construction projects, ensuring cohesion between all parties and operations is vital. Going paperless can enhance communication, especially where external contractors or third-party support is involved. In fact, around 91% of companies that adopted some form of workflow automation reported that they gained greater visibility around operational processes.

Staying up to date with legislation

For construction firms investing in compliant automation software takes away some of the complications when new legislation or regulations are introduced. For ERP systems, it’s in the software provider’s best interests to ensure that regular updates keep their clients compliant. Whilst there is still an onus on a firm to ensure they fully adhere to new legislation, software providers should also ensure any automated processes accurately reflect new changes.

Compete for high-priced contracts, achieve Carbon Net Zero Targets and comply with tax regulations

Additionally, digitised and automated systems are likely to increase a firm’s potential when bidding for higher-priced and high-profile contracts. As well as the ability to conduct real-time analysis of data, software also enables businesses to keep a digital trail of all expenditures and decisions. This is going to be essential as part of the UK Government’s Carbon Net Zero Targets for the industry.

Reducing carbon emissions will become a much bigger focus during all stages of construction projects. Firms competing to win government contracts priced over £5 million p/a in value, will need to comply with PPN 06/21 and submit an emissions report during the tendering process. Keeping track of carbon emissions data is a unique new challenge to the construction industry. That’s why utilising software ensures overall transparency and accountability for environmental impact reports.

Likewise, with an increased emphasis on Making Tax Digital regulations, all operational construction firms should now be utilising a compliant software system to complete tax returns. As a result, businesses are seeing a more concise and reliable system for storing and submitting tax records.

What Are the Consequences of Avoiding Digitisation?

The consequences of inefficient workflows speak for themselves, from a rise in disputes to improper data storage. According to one study, more than half of construction firms are being negatively impacted by poor workflows that offer minimal cohesion and maximum disruption. Less than 40% of firms automate their workflows for critical areas of their business, meaning a greater likelihood of mistakes and costly errors. These are the types of mistakes that can have a devastating impact on a business, but employing workflow automation could reduce human error by around a third.

Without adopting compliant and accurate software, construction firms will risk falling behind their competition and potentially operating illegally. Examples of this would be businesses not complying with Making Tax Digital legislation or properly documenting Carbon Net Zero Targets. Likewise, without the transparency that software offers, construction firms will struggle to put forward business cases and tendering documents for high-priced government contracts. Firms without the right reporting or digital paper trails run a huge risk of being unable to compete for such projects. The world is becoming more and more reliant on digital practices and the construction industry is no longer an exception.

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