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New multi-country survey from Finalcad finds typical profit margin is only two percent with failure to digitalise causing inefficiencies and cost overruns

Finalcad, a leading software provider to the construction sector, today releases the results of a survey of 400 construction leaders in France, Spain, Singapore and Japan, exploring digital transformation in the industry. The research finds the typical profit margin on a construction project averages only 2 percent across the four regions. It also reveals that a lack of digital transformation has left many companies reliant on manual and paper-based workflows; this comes at a time when the slowdown from the impact of the Covid-19 global pandemic is showing how important it is to digitalise operations and support remote working. Further, not digitalising is significantly damaging companies’ ability to collaborate and having a direct impact on the bottom line, with 62 percent of respondents saying that a lack of collaboration is the single biggest cause of construction project delays. 

The survey also investigates how universal tasks such as defect management and health and safety inspections are carried out. The findings show companies have several different methods and channels in place; more than half (51 percent) are using a combination of in-person, telephone, email, and/or paper to inform the person responsible for repairs during the quality process of the next action. Worryingly, 53 percent are using unreliable text/SMS or instant messaging (e.g. WhatsApp) to document a safety incident or hazard. The lack of consistency in how this important information is recorded and shared leaves a considerable margin for errors and miscommunication – which can lead to broader safety risks, delays and cost overruns.

“The construction industry’s continued reliance on outdated processes – both on- and off-site – is causing significant inefficiencies. This is not sustainable in a sector where slender margins are a persistent issue,” commented Frank Le Tendre, CEO, Finalcad. “Construction has fallen behind other global industries like finance and retail when it comes to digitalisation, yet this research shows us many of the daily processes that take place on all projects are prime targets for transformation. From snagging to safety, there is no area that cannot be improved by optimising operations. In addition, as regions emerge from the downturn caused by the Covid-19 pandemic, those that have digitised will be able to act quickly to get back to business as usual.”

Another consequence stemming from the failure to digitalise is the difficulty in documenting and capturing data, resulting in invoices being unpaid when a contractor cannot prove work has been done; a majority (90 percent) of respondents across all regions said this ‘free work’ was a common problem. Moreover, construction companies are guilty of ‘reinventing the wheel’ on new projects; 59 percent say they create new templates for existing workflows some, most, or all of the time – a clear waste of time and resources. Both results should be a major driver of digital transformation for construction managers, CEOs and developers – a centralised digital process enables continuous improvement and makes it far easier to proactively record extra work, as well as creating repeatable models.  

“As with all other industries, construction is set to face a challenging time in the short term with the impact of Covid-19 hitting global economies,” continued Franck Le Tendre. “However, in the long term, construction has huge potential for growth. The United Nations predicts two-thirds of the world’s inhabitants will be living in cities by 2050, and we are seeing the smart city trend accelerate fast. If they are to capitalise on these opportunities, construction companies need to digitalise now. Digital transformation removes existing silos and simplifies the challenge that construction companies face of juggling people, plans, skills and materials against a shifting schedule – improving profitability, while increasing the satisfaction of final customers.”  

The Finalcad 2020 Leaders Survey: Exploring Digital Transformation in Global Construction is the first of a two-part series exploring digitalisation in construction; the second report will be published in Autumn 2020. 




*The research was undertaken in February and March 2020; commissioned by Finalcad and conducted by independent market research company, Coleman Parks. The total sample size of 400 consists of 200 site managers/directors managing an average of 10 sites, and 200 HQ managers/directors. On site, respondents are the project lead with overall responsibility for a site. In the HQ operation, respondents are business unit directors with responsibility for construction. See ‘Demographics’ section for more detail. Respondents are from commercial and residential construction companies with revenues greater than $51M per year, in France, Spain, Singapore and Japan.


About Finalcad

Finalcad is the collaboration platform designed to optimise the field experience for workers in the construction industry, including the building, infrastructure, and energy sectors – facilitating them to ‘build their best’. It helps companies in the construction sector overcome the challenge of low margins and poor profitability by driving down operational costs, supporting continuous improvement, and boosting workers’ efficiency. Finalcad enables companies to carry out existing processes more efficiently and safely by digitalising their workflows; it captures data from across the whole site, facility or asset, arming all stakeholders – from the field worker, to the sub-contractor, main contractor and client – with the data they need to drive accurate decision making. 

Developed 10 years ago by an expert team with deep industry knowledge, Finalcad has raised $63M of funds to date; it was named in 2019 as one of the ‘Next40’, a list selected by the French government of the 40 most promising French startups with high prospects of becoming global tech leaders. Finalcad is headquartered in France and employs more than 120 people worldwide. Its customers are across the globe, and it has been used on more than 24,000 projects in 35 countries. For more information about Finalcad please go to: www.finalcad.com.

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