VIEWPOINT
HOW THE CONSTRUCTION INDUSTRY CAN OUTPERFORM ITSELF KENNY INGRAM, VICE PRESIDENT, ENGINEERING, CONSTRUCTION & INFRASTRUCTURE FROM IFS LOOKS AT THREE KEY OPPORTUNITIES THAT ARE NOW POSSIBLE WITH MODERN SOFTWARE INSIDE THE CONSTRUCTION INDUSTRY, INCLUDING NEW SERVICES, MODERN METHODS, AND PROJECT PLANNING.
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ith 2020 and 2021 playing havoc for so many construction companies, 2022 is the year for the industry to shine. With many central governments firmly setting their recovery plans on infrastructure projects the wheels are already in motion, and this creates a huge opportunity for the entire industry to meet industry demands and stimulate a global bounce back. To do this, though, construction companies will need to focus beyond the here and now, turning their attention to what matters most - their customers and ensuring their long-term future. Delivering services and maintenance Fast and friendly service is more commonly attributed to a waiter in your favorite restaurant than a worker on a
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CXO INSIGHT ME
MAY 2022
construction site. However, an increasing number of asset owners are seeking to outsource service and maintenance contracts for their assets putting contractors who focus on the entire asset lifecycle at a significant advantage. A survey of construction customers by IFS shows that 25% now include service, maintenance, and facilities management as part of their offering, and this is expected to increase to 50% by 2025. Typically, these contracts are usually awarded to asset management specialists, however given the contract value for service and maintenance can typically be 120% - 200% greater than value of the actual construction contract alone; if service and maintenance is also secured by the same contractor this can not only increase their revenue margins but also provide a more predictable and
reliable revenue stream – which provides a platform for growth, innovation and long-term success. This trend is more commonly called Asset Lifecycle Servitization: The New Business Revenue Model For The Construction Sector - It’s an opportunity for constructors and manufacturers to gain visibility into their future performance and as such significantly grow their business, so it’s no coincidence a recent report by McKinsey estimates that construction sector disrupters could share the industries $265 billion annual profit pool. However, winning these coveted service and maintenance contracts and delivering the full asset lifecycle, requires construction companies to become more customer centric and change their outlook. This starts with a desire to
