More three quarters of construction projects are delivered late on over budget, findings from a new survey from Procore Technologies show.

Owners at the Leading Edge: How construction project owners are using technology to achieve on-time, on-budget performance, which was conducted by international research firm IDC, found that most construction projects are delivered late and significantly over budget compared to the owners' original plans.

IDC conducted the survey in May and June of this year. Researchers spoke to more than 500 project owners in the United States and Canada, including private corporations, governments, healthcare and education institutions, and commercial real estate owners and operators. The survey asked about owners’ challenges and how they responded to them—or plan to. It also focused on changes being planned or adopted to improve processes, workflows and application modernization.

The top-level finding from the survey showed that a significant number of tendered projects are not only over budget, but also late. Three quarters of projects went beyond owners’ planned budgets, and 77 percent were delivered late. Projects averaged 70 days late compared to original estimates, and owners found an average of six budget changes and five schedule changes per project. The average project cost rose 15 percent as a result.

Not surprisingly, the survey drew a direct link between schedule and budget adherence and the use of technology. It found significant differences between those respondents whose projects were least over budget and schedule—called “high performers”—and those most over budget and schedule, “low performers.” High performers demonstrated regular use of integrated technology solutions.

“Owners who leverage digital solutions are generally delivering projects on budget and on schedule,” said the report. “Owners reliant on manual or siloed productivity solutions (e.g., Excel, SharePoint, Dropbox, local drive document storage, or outdated custom legacy solutions) are typically delivering projects late and over budget.”

The survey also found that owners are beginning to see the value and importance of data centralization as a tool to support new technologies that can help increase project performance. Those they identified as priorities for long-term future adoption included data centralization technologies, predictive analytics for cost modelling, building information modeling, digital twin, and green building.

“The survey shows that project owners can see what needs to be done,” said IDC’s vice-president of research Warren Shiau. “But if the adoption of these technologies is going to be effective, they need to look at modernizing their data, applications and IT infrastructure—or else they won’t be fully able to take advantage of these game changers.”

When it comes to budgeting and scheduling, owners predict the greatest impact on project performance in the next three years will be BIM (53%), connected supply chain (44%), pre-fabrication of components (41%), and predictive analytics for cost modelling (34%), according to the survey results.

 Biggest challenge: finding skilled trades and labour

Finally, the survey asked owners about the greatest challenges they face to getting projects done. Tops on that list was shortages of skilled labour (69%). Owners also saw environmental regulations (66%) and project cost escalations (61%) as challenges to their businesses.

“IDC’s survey is a wake-up call for construction project owners across North America,” said Zachary Reiss-Davis, Senior Manager, Product Marketing, Procore. “Budget and schedule overruns are the norm, and that shouldn’t be the case. The high performers surveyed show that adopting digital solutions helps keep budgets and schedules on track. Future success depends on modernizing technology infrastructure and adopting integrated construction management solutions that can help future-proof operations, alleviate staffing shortages and ensure efficient project delivery.”

Featured image: A new survey from Procore Technologies found most construction projects are delivered late and significantly over budget compared to the owners' original plan. (Business Wire)