There is a large cost involved with being inefficient in a business, and because margins are so small in construction, this can be significant to a project’s bottom line. According to market research firm IDC, companies lose 20 to 30 percent in revenue every year due to inefficiencies and here’s how.
Staff Costs in Retrieving Information
When retrieving information becomes difficult, it also becomes costly. PWC published statistics from a study stating that organisations spend, $20 in labor to file a document, $120 in labor to find a misfiled document and $220 in labor to reproduce a lost document.
Cost of Having to Pay Overtime
When technology and systems are inefficient, productivity can decreased by 25%. According to a McKinsey report, employees spend 1.8 hours each day finding or rewriting information. With this being said, company deadlines will not shift and this will result in costly staff overtime.
Cost of Miscommunication; Double Handling and Disconnect
Miscommunication between staff and systems comes at a large expense. Double handling and disconnect occurs when collaborative communication fails. This is due to inefficient systems such as the delayed paper processing and sharing or apps that cannot efficiently talk to each other. The Document Disconnect survey by IDC recorded that over 80% of problems arise when internal systems do not “talk” to each other.
Cost of Mistakes in Key Documents
In all projects, accuracy and accountability is one of the most important factors in finishing on time and within budget. This can become a serious problem when documents have illegible handwriting, paper becomes faded, documents become damaged and information or signatures are missing. Tracking down this information is inefficient and become costly, which overall will affect the project’s bottom line.
Cost of Using Outdated or Poor Applications
There are thousands of applications that sell the “right” solutions for businesses and yet, analyst firm Aberdeen Group confirmed in their own study, that 50% of businesses are losing revenue due to poorly performing applications. Companies continue to make do with their inefficient applications even though they may not be the right solution.
Cost of Privacy and Security
When work systems are still based on paper the costs of shredding, offsite storage and correct record keeping become premium. This can cost companies XXX per month! Plus, the time taken to retrieve them out of storage if needed. Confidentiality is also an issue because paper documents cannot be viewed in two different places at once without duplication. This can lead to accidental viewing or misplacing confidential files.
If you consider all the above and how many paper documents are involved in just one construction projects the cost of inefficiency can add up quickly!