In terms of digital maturity, the construction industry is lagging behind adjacent sectors.
In fact, the #2 top goal for construction and engineering organizations for 2025 was “Improving digital maturity and creating a company-wide strategy for more effective technology use.”
Embarking on a new digital transformation journey is never easy, and undoubtedly there are hurdles to overcome – from changing the mindset of decision makers to overcoming complex barriers across business units and regions – however, facing these complications head on and charting through the digital transformation path will lead to building sustainable business growth.
It is clear that there is a growing need for the sector to accelerate digital maturity, update legacy ERP, finance, and accounting systems, and adopt modern user-friendly technology that helps to attract and retain the next generation of skilled workers.
With over 63% of construction and engineering leaders stating that their companies are in the market for a new Enterprise Resource Planning (ERP) system within the next 1 – 2 years, the appetite for change is apparent. What decision-makers, including Digital Transformation Managers, CIOs, COOs, and CFOs, need is help and guidance on this journey.
This guide delves into the concept of digital maturity and the role construction ERP software plays in its acceleration. We explore construction and engineering industry-specific strategies that foster profitable revenue growth, support business diversification, and build a culture of innovation that helps propel organizations forward.
Understanding Digital Maturity in Construction
Digital maturity refers to the extent to which an organization effectively leverages digital technologies, processes, and capabilities to enhance operations, customer, partner, and employee engagement, and overall business performance.
But adopting technology for technology’s sake never leads to tangible business value. To understand the underlying need for accelerating digital maturity, we must understand the top challenges impacting construction and engineering businesses today.
Citing the 2024 IFS Global Research Study of 825 business leaders across the industry, we uncovered these top five challenges:
- Having timely, real-time and accurate management information as a single source of truth
- Improving project and business profit margins
- Mitigating project and business risk
- Overcoming supply chain issues, including shortages of construction materials and prices increases
- Maintaining regulatory compliance
The relationship between digital maturity and business success is undeniable. Companies with higher levels of digital maturity experience improved operational efficiency, fewer project cost and delivery over-runs, enhanced customer experiences, and increased revenue growth.
Digitally mature organizations can respond more agilely to market changes and diversify into new revenue streams. They can form joint ventures and partnerships to win larger, more profitable contracts, reduce business risk, and harness data-driven insights for informed management decision-making.
When we asked construction and engineering leaders to share their top five benefits of adopting a new ERP system, these promised outcomes were validated:
- Improved agility to make it easier to grow and/or diversify the business
- Better resource, labor and equipment utilization
- Easy to integrate best-of-breed software tools
- Reduced IT costs by simplifying business system landscape
- Increase business valuation (share price)
Construction Industry-Specific Strategies for Digital Transformation
Let’s review a real-world example of a leading construction company that has accelerated digital maturity with the IFS Cloud ERP platform.
Denys is multidisciplinary group focusing on water, energy, mobility, refurbishment, civil engineering, special techniques and other specialized building techniques. With 1,800 employees, 80 companies including joint ventures, and completing more than 100 projects annually, the Denys Group is proud to be a preferred partner for the most complex building projects and infrastructure work.
Leaders from the Denys Group recently spoke on an IFS webinar “2025 Construction & Engineering Trends”, showcasing their digital transformation journey; lessons learned regarding process and data standardization; business diversification; sustainability initiatives; and industrial AI and data-driven operations projects.
The complexity & diversity of the business of Denys required a robust and comprehensive application landscape. Therefore, Denys’ drivers for modernizing their technology ecosystem were:
Fit for Purpose:
- Existing Solutions did no longer fit the needs
- Lack of collaborative capabilities and functionality
- Outdated and not optimal for user experience
Efficiency and Standardization:
- Core processes took place outside of the ERP solution
- Microsoft Excel as exponent
- Double/Triple administration
- Classic/Old fashioned collaboration (E-mail/Phone)
Information
- Sharing of information and data was a challenge/concern
- Prevents smooth business processes
- No common coding of data
Evolution
- Difficult to drive and support innovation and growth
- BIM adoption
- International expansion (export)
- Little or no (on-hands) data to drive
Denys’ successful model for accelerating digital maturity was showcased during the live webinar by their Digital Transformation Manager, Corporate Quality Manager, and Application Manager for IFS Cloud. To set the stage, the Denys team outlined the phased approach to their adoption of a new digital ERP construction solution:
- Phase 1: Strategy –SWOT analysis, Long Term Action Plan, and Business Process Map
- Phase 2: ERP Solution Requirements – Process description, analysis & optimizations, Request for Quotation
- Phase 3: Construction Software Vendor Selection – From Long List to Short List, Case Demos, Final Scoping total future IT landscape, Contract
- Phase 4: ERP Platform Implementation – Design, Build, Testing, Integration, Data Migration, Cutover
- Phase 5: Go Live – Hypercare, Adoption, User Friendliness, Enlarging Scope
The Role of Industrial AI Technology in Accelerating Digital Maturity
Innovative technologies that are advancing AI in construction are pivotal in enhancing digital maturity. By adopting AI, organizations can reduce operational costs while enhancing their capacity to innovate, positioning themselves ahead of the competition.
Integrating artificial intelligence (AI) into business processes also enhances decision-making capabilities and helps construction and engineering companies to achieve these goals: improved efficiency; increased accuracy of estimating, budgeting and finances; better control and governance, reduced business risk; and higher project margins.
AI should be an integral part of accelerating digital maturity; but its successful adoption by an organization is very dependent on having accurate, consistent, and centralized data.
Denys expanded on this desire to improve data management by sharing these expected benefits of implementing IFS Cloud as their construction ERP software:
IFS Cloud will serve as the backbone for future Data Analysis, Machine Learning and AI innovations at Denys, and deliver these enhancements:
- Standardization Master Data Creation Process and set up appropriate Master Data Organization
- Improved data quality
- Set up of a dedicated data architecture
- Identification of required & value-adding analytics
With IFS Cloud ERP as their digital backbone, Denys can pursue future AI use cases and answer business challenges, such as:
- How can IFS.ai support the data gathering & data analysis for sustainability reporting?
- How can Machine Learning predict project progress and risks?
- How can AI identify hazardous work situations?
Build a Successful 2025: Benchmark Your Digital Maturity
To measure digital maturity, organizations can focus on several key metrics. These include the level of integration of digital tools in everyday operations, the effectiveness of data analytics in driving decision-making, employee digital skills, and the ability to innovate and adapt to new technologies and market opportunities.
One way to do this is by benchmarking your organization’s level of digital maturity against its peers.
- What do the majority of construction firms have implemented in terms of technology capabilities?
- What is on their most-wanted list for adoption in the next several years?
- And what construction ERP innovations are on their wish list?
To answer these questions and more, check out our infographic “Improving Digital Maturity in Construction and Engineering” that will serve as your blueprint for new ERP adoption in 2025.
To hear the full accelerating maturity journey of our customer Denys, watch the on-demand webinar “2025 Construction & Engineering Trends.”
