The Cost Of Information Silos In Construction

The Cost Of Information Silos In Construction

Information silos are a hindrance to all industries and have been for a while, but are especially a hindrance in the construction industry. As long as there have been point solutions for different aspects of business, there have been information silos. These cause issues in all areas of business, and especially on construction projects. The cost of information silos is real and felt by most companies.

 

What is an Information Silo?

Data or information silos are a term within businesses and the construction industry. An information silo forms when a department doesn’t share information and doesn’t receive information. There are a mentality and structure that often contributes to the lack of information sharing.

The mentality behind information silos isn’t usually out of malice. Often times it centers around the loss of information control. One department might not want to release reports to everyone because someone without experience in the department won’t understand the information. And if they don’t understand the information they might make a faulty judgment.

The other main force behind information silos is structure. The accounting department might use a system that doesn’t fit neatly into the project management software. So getting information from one system into another is a hassle and the value in that information is lost.
Information silos negatively impact business across all industries. But with the labor shortage within the construction industry and a lack of productivity, the cost is great.

 

Information Silos

Server by djvstock, Photo by Memory Catcher on Canva

 

How to Identify Information Silos in Your Business?

Sometimes it’s evident that there are silos in your business, but sometimes it’s difficult. A general reason why it’s hard to see the silos is that it’s the way everything’s been done that way for so long. And it can be hard to change the mentalities and systems behind the silos. Here are some of the common signs of information silos.

 

Duplicate Work

One of the common signs of information silos in construction is duplicate back-office work. An example is time card collection and pay. Often the superintendent will collect and approve time cards and send them to the office. Some offices will then input that information for their personal record into a spreadsheet from paper. Then they’ll send a PDF to the accounting department. So someone in accounting has to manually type in all of that information to make sure people are paid. This is a lot of unnecessary work that could be removed by sending the accounting department the spreadsheet.

 

Bad Customer Experience

Another way to identify data silos in construction is the quality of the customer experience. Customers aren’t happy when several different people call them about payment, billing, or change orders. If a customer gets a call to approve a change order in the field, then from the project manager, and finally from billing, they won’t think highly of the company. Communication between the departments is necessary and vital, and information silos make it difficult.

 

How Data Silos Cost Construction Companies

Information silos cost construction companies a lot of time and money throughout the year. Here are some of the ways that information silos cost companies.

 

Time

Information silos in construction are time-consuming to maintain. Each project has so much information stored in so many different places. However, when multiple people oversee different individual platforms, it can be challenging to get them to come together. Instead, there is a complex system to get information from one system to another. The whole process can waste a lot of valuable time on a project and cause delays or undue stress.

 

Incomplete Information

Incomplete information due to data silos is another cost. When individual systems trap so much information, project managers don’t to get a complete picture. And trapped information doesn’t just impact companies; it affects projects. Data might be in the general contractor’s system from the architect but not forwarded to the trade contractors and vice versa. When there isn’t information sharing construction companies lose out on a lot of critical potential savings.

 

Potential Profits

Information silos not only cost construction companies a lot of time, but they also lose out on potential profits. Silos make it harder for fresh eyes to ask questions that can lead to better business practices. Information silos are expensive on a business, and also create distrust between departments.

 

Avoiding Information Silos

The best way to avoid information silos is to look at the current software and business practices in use. Software that doesn’t integrate easily, or doesn’t offer flat file import/export will only make the silos worse. The future is in informed decisions, with unity between departments and on projects.

Subcontractor Software Demo

Posted in Construction Software.