Software as a service (SaaS) delivers construction software over the internet from the vendor’s infrastructure, rather than installing and maintaining it on your own servers. For construction teams the practical differences are access from any connected device, updates handled by the vendor, and no upfront hardware outlay — set against a dependence on connectivity, less room for customization, and an ongoing subscription rather than a one-time license.
What Is SaaS?
SaaS stands for Software as a Service. It refers to the cloud-based delivery model of software applications, where users can access and use software applications over the internet without having to install or maintain them on their own computers or servers.
For many years, studies have been reporting the relative lack of using the latest technology in the construction sector. The picture has since sharpened, though not in the direction the industry hoped. McKinsey found that global construction productivity improved just 10% between 2000 and 2022 — 0.4% a year, against 50% for the total economy and 90% for manufacturing — and declined 8% between 2020 and 2022. Over that same stretch the industry put roughly $50 billion into construction technology, 85% more than in the preceding three years, without a corresponding rise in productivity. That is not an argument against adopting technology. It is an argument that how you adopt it matters more than whether you do. The gains are real and documented — McKinsey’s earlier work put digital transformation at 14 to 15% productivity improvement and 4 to 6% cost reduction — but they land with organizations that change how they work, not with those that buy software and carry on as before.
They have summarized that technology can be applied to provide the following benefits:
- Increased efficiency and reduced costs.
- Improved safety
- Better collaboration among various stakeholders
- Transformation of the way projects are built and delivered
- Optimize performance and profitability using predictive analytics and artificial intelligence
They state that for this transformation to take place and the benefits realized, successful technology adoption requires collaboration and a willingness to embrace digital tools and solutions. One of the first and easiest ways to start this transformation is with SaaS software.
Where Construction Already Runs on SaaS, and Where It Doesn’t
Most companies already use this for daily applications such as Microsoft Office 365, customer relationship management (CRM) software like Salesforce and most enterprise resource planning (ERP) software for accounting, such as SAP.
However, outside of these main business areas, construction companies are still very often utilizing on-premise software for their operational business. This may include the desktop or on-premise licenses of Excel or older legacy commercial products for estimation and cost controls, as well as file storage and management of documents on a laptop or within the company server.
Why Moving Is a Smaller Step Than It Looks
Moving to SaaS is not actually a big leap. Many suggest that is the easiest step in the transformation process as benefits are quickly realized. SaaS offers construction companies a range of benefits that can help construction companies to improve their operations, increase their competitiveness, and stay ahead of the curve in a rapidly changing industry. These benefits include:
- Access to advanced technology without the need for significant upfront investments in hardware and software licenses; use of solutions that are highly scalable and can be tailored to meet the specific needs of different construction projects.
- Quicker start up than other solutions as SaaS products are typically designed to be user-friendly and require minimal training, making them accessible to a broader range of users
- Connection to software and data from any device with an internet connection, improving collaboration and communication among team members, regardless of their location.
- Software that is updated easily and supported by the vendor, which means that construction companies don’t need to worry about software updates or maintenance tasks, reducing the burden on IT staff and allow construction companies to focus on their core business activities.
What On-Premise Software Can’t Keep Up With
With mobile devices and wireless connectivity more reliable and pervasive than ever, some processes companies should be using either aren’t possible or are outdated when performed specifically with on-premise solutions. Field data capture is the clearest case: if the crew records quantities on paper because the system only lives on an office desktop, the delay between the work happening and the number reaching the schedule is built into how you work, not into the technology.
What Changes When Your Data Is Real Time
The analytics available with the real-time data, optimized for SaaS software, make a difference on project performance and profitability. Additionally, the security provided by the datacenters and software vendors continue to reduce concerns about risk.
What Are the Drawbacks of SaaS?
Many companies, however, not just in construction, are resistant to making this full SaaS commitment. While SaaS offers many benefits, there are also some potential drawbacks that organizations should be aware of.
Some of the main drawbacks to SaaS include dependence on an internet connection, security concerns, lack of customization, data control, subscription costs. It is important for organizations to be aware of the potential drawbacks and to assess whether the advantages of using SaaS outweigh the risks and costs.
Those drawbacks are real, and they are not equally weighted. It is worth separating the ones that genuinely block a decision from the ones that are really a procurement conversation:
- Connectivity is the one that matters most on a jobsite. The question to ask a vendor is not whether the product is cloud-based but what it does offline and what happens to entries made while a site has no signal.
- Security is worth testing rather than assuming, in either direction. A vendor data center is usually better resourced than a server in a site office, but ask for the certifications and the breach notification terms rather than taking the claim at face value.
- Data control is usually a contract question rather than a technical one. Ask where data is hosted, what the export format is, and what you get back if you leave.
- Customization limits are often a benefit in disguise. Heavily customized on-premise systems are the ones that stop getting upgraded, and end up frozen on a version nobody supports.
- Subscription cost is a real change to how the spend is booked, from capital to operating. Finance usually has a view on that before IT does.
Should Your Construction Company Move to SaaS?
Ultimately, what should your construction company do? Like all other sectors, technology must be put to work to stay competitive and meet stringent requirements on scope, budget and schedule. Those that have not integrated technology into their company will find themselves behind in their market.
Like implementing satellite technology for surveying, using drones, or establishing a BIM program, movement to SaaS has arrived and companies are making this transition. SaaS is now the standard and those that do not move to SaaS software are finding themselves behind the curve.
Use of mobile apps, improved collaboration, better system integration, and establishing a common data environment all require movement to SaaS software. If you have not already moved to SaaS software, now is the time to begin the transition. InEight delivers its project controls products this way, which is why the offline behavior question above is one worth asking of any vendor, InEight included.
