By Bob Miodonski
Of Contractor's Staff

PRINCETON, N. J. — More owners of contracting firms view information technology as a productivity tool than they did two years ago, according to the Construction Financial Management Association, which in May released its biennial IT Survey of the Construction Industry.

"The overwhelming response to the 2006 CFMA IT Survey — an increase in participation of over 200% from the 2004 survey — can only mean that management of IT and related issues has become a point of increased focus for owners and managers," the report states.

CFMA attributes contractors' rising interest in IT since 2004 to three factors:

  • Rising material prices;
  • The effect of the 2005 hurricane season on much of the South; and
  • The ever-competitive conditions that exist among contracting firms.

Specialty contractors, at 42%, made up the largest group of respondents to the survey, which included general contractors (31%), highway-and-heavy firms (21%) and other contractors (6%). Of specialty contractors, plumbing and HVAC firms and electrical companies were the largest groups (12% each). All other specialty contractors, such as painters, carpenters, roofers and water well drillers, were in the low single digits as survey participants.

Of specialty contractors surveyed, 68% have 100 or fewer employees; of that percentage, 19% have fewer than 25 people. In revenue size, 58% of the specialty firms in the survey bill $10 million or less annually, evenly split between contractors with more or less than $5 million in revenue.

Of all construction contractors, specialty firms are the least likely to employ staff dedicated to information technology, according to the survey. While 69% of specialty contractors do not have dedicated IT staff, they are not far out of step from the rest of the construction industry.

"Overall, only around one-third (35%) of all participating companies employed dedicated IT staff, which is down from 47% in 2004," CFMA states. "More companies are choosing to outsource their IT function. In 2004, 53% of respondents did not employ dedicated internal IT staff; only 19% of those respondents outsourced their IT function. In 2006, 65% of respondents did not employ IT staff and 75% of those respondents outsourced their company's IT function."

In answer to a question that wasn't in the 2004 survey, contractors with a dedicated IT staff have an average IT budget of $344,000 for 2006.

Of all contractors, specialty firms, at 51%, are the least likely to use projectscheduling software. In contrast, 82% of GCs use it. Overall, 66% of contractors use software schedule projects.

Specialty contractors also are the least likely to use estimating software, although the disparity with other construction firms is not as large. While 83% of specialty firms use estimating software, highway-and-heavy contractors are the most likely to use it at 90%. The overall number for all types of companies is 86%.

Specialty firms, on the other hand, are the most likely to use CAD/drafting software on their jobs. While 66% of specialty contractors use CAD, the overall number for construction firms is 62%.

For job costing, accounting and payroll, 98% of specialty firms in the survey use software applications, which is the same percentage as the overall construction industry. The high number "clearly illustrates the critical nature of this kind of software within the industry," CFMA states.

Perhaps in response to Katrina and other storms, 53% of specialty contractors say they have a disaster recovery plan for their computer systems. Only 24%, however, have formally tested their plan to see if it really works.

"Overall, 55% of participants have a formal disaster recovery plan in place," CFMA states. "However, the fact that nearly half of participants are operating without such a plan indicates that there is significant room for improvement in this standard industry practice."

With virtually no difference from other types of contractors, specialty firms report that that average lifespan of a PC workstation is 4.1 years. When contractors upgrade their computers, 75% of them buy new equipment, which is actually down 4% since 2004. Those who choose to upgrade their current computers grew from 17% to 21% in the last two years.

Other findings in the survey include:

  • Three-fourths of all respondents have a Website and 52% of them perceive it primarily as a marketing tool;
  • 78% of all respondents do not use GPS for fleet management and 22% of those that do use it to track service vehicles and personnel; and
  • The use of wireless/handheld devices in the field has increased to 34% in 2006 from 25% in 2004 with another 15% of respondents anticipating they will use the technology within the next six months.

CFMA's Website is www.cfma.org.