Construction Software Buyer Report – 2014

By: on March 21, 2014

In 2013, Software Advice spoke to thousands of buyers evaluating new construction software. We recently analyzed our interactions to learn what criteria buyers use to make purchasing decisions. This report highlights our key findings.

Key Findings

  1. The primary reason buyers evaluate construction software is to increase efficiency.
  2. Project management and estimating are the most-requested applications.
  3. A vast majority of buyers (78 percent) don’t have a deployment preference.

To provide further insights on this data, I shared our results with technology leader Steven Mulka, founding partner of SIS Software and member of the Association of General Contractors (AGC) IT Steering committee. Mulka’s thoughts on the data are included in the report below.

“Overall, there is great opportunity for construction software vendors who figure out how to effectively deliver their software as a Cloud solution. The key is educating potential customers on the benefits of this deployment model and incorporating features that bring customers real value.”

Steven Mulka, Member of AGC IT
Steering Committee

Buyers Seek Software to Increase Efficiency

Twenty-eight percent of buyers said they were evaluating construction software to increase the efficiency of their business, making this the most-cited reason. This comes as no surprise, given that 35 percent of buyers in our sample were currently using manual methods (e.g. pen and paper, emails or spreadsheets) to manage operations.

Top Reasons for Purchasing New Construction Software
Buyers’ Reasons for Purchasing New Software
Buyers’ Current Methods of Managing Construction Activities

Meanwhile, 32 percent of buyers were currently using construction-specific software—either a legacy construction system or accounting software, which is often a starter package such as QuickBooks.

Of these buyers, the primary reasons for purchasing software are dissatisfaction with their current system and the desire for more robust features. A typical buyer response is, “We feel we’ve reached the limit with our current software and need something more robust.”

Mulka says that while buyers are looking to improve efficiency and many are unhappy with their current solutions, “managing construction projects is a complicated and manual process that often requires many different solutions to handle it successfully.

Project Management Is the Most-Requested Application

The top application requested by buyers was project management (33 percent). This isn’t surprising, as our 2013 Construction Project Management UserView found that firms using construction project management software complete more projects on time and on budget than those who don’t.

The second most requested application is estimating (24 percent), followed by accounting/job costing (18 percent) and takeoff (14 percent). Service, customer and bid management applications were rarely requested, with fewer than 2 percent of buyers citing a need for each application.

Most Requested Construction Software Applications

Preferred Applications

Buyers Request Best-of-Breed Software More Often

When asked about their integration requirements, 68 percent of construction software buyers wanted to evaluate best-of-breed applications over integrated software suites. This isn’t surprising given that most buyers we speak with represent small companies. Most will need a single tool, such as cost estimating, and won’t require the extended capabilities and functions of an integrated construction software suite.

Application Integration RequirementsPreferred Integration

Most Buyers Don’t Have a Preferred Deployment Model

A significant majority (78 percent) of buyers had no preference regarding deployment model type. Among those buyers who did express a preference, 62 percent favored Cloud-based applications over on-premise solutions. This spread is much lower than in other industries, where Cloud-based software is often favored by most buyers.

Deployment Model PreferenceDeployment Model

Most Buyers Sampled Were Small Businesses

Most of the buyers in our sample were on the smaller end of the spectrum—42 percent of companies had annual revenues of $5-10 million, and 31 percent had fewer than 20 employees. These companies primarily fell into four categories: specialty contractors (e.g. electricians, plumbers), general contractors, home builders and engineers/architects.

Smaller construction companies will likely have more opportunities to adopt software that improves their efficiency and automates business processes in the near future.

Annual Revenue of Buyers’ Companies
Employee Count of Buyer’s Companies
Top Trades of Buyers’ Companies

“Historically, the construction industry has not been a top spender in the technology field. But I think the increase of Cloud solutions and more powerful software at a more affordable cost will provide opportunities for smaller companies—and even large companies—to get the improvements they’re looking for and achieve a positive ROI without having to spend millions,” he says.

The detailed methodology for this report can be found here

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