The need to increase investment into construction

Last week, the Australian Government announced that its national rolling 10-year infrastructure investment pipeline will be increased from $110 billion to $120 billion, setting a new record. With persistent supply constraints across the construction industry, the sector needs the increased investment now more than ever. In New Zealand, CoreLogic predicts that construction prices could grow by double digits this year as they continue to rise at the quickest rate in over four years.

Payapps Chief Operating Officer Tony Simonsen weighs in on the issue, explaining “Raw material shortages have meant continual price adjustments and ultimately price increases, making it difficult to accurately budget both time needed and material costs of a job. Particularly when you factor in cost pressures in other areas like labour and equipment hire.

“These challenges are not new. Construction has been plagued by rising costs, stagnant productivity, high waste, and low margins for decades. The opportunity lies now in maximising the additional government investment and investing in technology to remove headaches like hardcopy paperwork for progress claims, and the hours spent processing them,” continues Tony.

Technology can improve efficiencies and clarity around progress payments which have long been a manual process within construction. Tony explains, “Technology reduces complexity for both builders and subcontractors, enabling more collaborative workflows so all parties can track and record claims, variations, and retention in real time against a contract to ensure prompt payment to subcontractors. This is becoming even more important as prices and projects continue to change rapidly.”

With the industry’s already-existing issues and long-overdue government investment, Tony says the last thing the construction sector needs is inaccurate information which could lead to costly conflicts and increased risk for all parties involved.

“To change this, businesses must be ready to invest in technologies that provide a platform for sharing data and engage early in the process to determine how builders and subcontractors will collaborate,” Tony explains, “Ultimately, it comes down to having a single source of truth and that’s what technology offers our industry today. There has never been a greater imperative for contractors and subcontractors to understand the source of the information they are working from and validate the integrity of the data they are gathering and acting upon.”

While digital transformation once presented a way to gain a competitive edge, now technology spells the difference between success and failure, providing the means to successfully complete projects and dramatically reduce the potential of costly disputes.

Tony believes that the adoption of new technology is essential to the construction industry’s future and those that don’t move with the times risk falling behind, and not just financially.

“In a talent-tight market providing staff with the most effective and modern tools is critical. Today’s workers are used to working online and in the cloud, and error-prone spreadsheets are considered inefficient if not archaic. Utilising technology to create better efficiencies, collaboration, and risk mitigation is an essential foundation if the sector is to move into a new era of growth and capitalise on the next wave of building activity in a post-COVID environment. That’s why we’re seeing strong interest in Payapps. Our technology speaks for itself by providing true visibility across the claim approval process and seamless integration with leading enterprise resourcing platforms (ERPs) and accounting software like Xero and MYOB. It’s exciting to be removing headaches caused by repetitive manual processes as the industry slowly transforms for a brighter and stronger future.”

Visit au.payapps.com to see how Payapps could make it even easier for you to manage progress payments.

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