Dodge Construction Network finds that increased automation of subcontractor management processes improves productivity, profitability and cost performance

A new study from Dodge Construction Network, in partnership with GCPay, reveals that currently, only one in three (34%) of general contractors automate fewer than half of their subcontractor management processes. The report details data-based benefits of greater automation and digital transformation by general contractors, including increased productivity, profitability and cost performance.

Most general contractors rely on subcontractors to generate successful projects, making managing subcontractors vital to their business. Many general contractors are also experienced in utilizing digital tools for these processes; however, as the Optimizing Subcontractor Management with Technology SmartMarket Brief reveals, many general contractors rely on a proliferation of older solutions, making integrating data across processes challenging.

COMBATING DATA SILOS IN PROCESS MANAGEMENT

The findings show that half of respondents depend on solutions that tend to create data silos, such as generic software (e.g., Excel), internally developed software for a specific task or commercial software that only handles one or two of the many processes needed to manage subcontractors.

To evaluate where new adoption will focus, the study benchmarks the general contractors’ use of technology to manage 12 key processes essential to the management of subcontractors including accounting, finance and contract management. Those using technology report a variety of advantages, with the top benefits spanning performance, process and business improvements, including:

• Improved productivity: 91%
• Improved cost performance: 81%
• Improved profitability: 79%

COMMERCIAL SOLUTIONS FOR CONTRACTOR MANAGEMENT

Those using either platform or single purpose commercial solutions on half or more of the processes they conduct report greater benefits. At least twice as many general contractors frequently experience improved productivity and profitability at a high to very high level when compared to those who are less engaged with commercial solutions.

“Everyone benefits from increasing the automation of these processes — the findings make that clear — but those who do it for the majority of their processes and commit to purpose-built commercial solutions benefit the most,” says Steve Jones, senior director of industry insights research at Dodge Construction Network. “Automated processes open up a whole world of efficiency, analysis and decision support.”

Encouragingly, the report also reveals that the contractors not currently automating some of these processes actively plan to do so in the near future. The highest growth is expected in processes including schedule of values/subcontracts, change orders, applications for payment and general subcontract management.

However, the findings also show that just 9% of companies are planning to automate several other critical processes, such as OSHA compliance and reporting, and tier vendor management, indicating the ongoing need for understanding the value of automation amongst contractors. As the study shows, those that optimize subcontractor management with technology also experience the largest number of benefits.

“With the ongoing concerns of project delays, supply chain constraints, and labor shortages, this study really confirms that contractors are looking to automate as many financial and managerial processes as possible through technology,” according to Mike Milligan, Chief Growth Officer at GCPay.

For more information about the specific finance, accounting and contract management processes for which technology is currently being used, the top processes expecting growth and the benefits associated with automating these processes, the Optimizing Subcontractor Management with Technology SmartMarket Brief is available for download here.

About Dodge Construction Network: Dodge Construction Network is a solutions technology company providing an unmatched offering of data, analytics, and industry-spanning relationships to generate the most powerful source of information, knowledge, insights, and connections in the commercial construction industry. The company powers longstanding and trusted industry solutions to timely connect and enable decision makers across the entire commercial construction ecosystem. For more than a century, Dodge Construction Network has empowered construction professionals with the information they need to build successful, growing businesses. To learn more, visit construction.com

About GCPay:

GCPay is a cloud-based construction software for managing pay applications, lien waivers, electronic payments and more. GCPay simplifies the application for payment processes between general contractors and subcontractors by automating the payment application process. With GCPay, general contractors can create and exchange lien waivers, organize and collect compliance documents and improve subcontractor communication. Plus, GCPay integrates directly with your Construction ERP platform to save time and get your subs paid faster. Today, thousands of construction companies use GCPay with 10,000+ documents processed each year, making GCPay the proven choice for construction companies. Learn more at GCPay.com.

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