ROI in Construction Technology: Can Builders Measure the Benefit?

ROI in Construction Technology: Can Builders Measure the Benefit?

You have probably done these calculations more than a handful of times to measure your investment’s profitability, but how accurate is it for construction professionals as yourself? 

Almost every industry uses return on investment (ROI) as a financial measure to calculate investment profitability. It is a proportion that compares the gain or loss from a tangible investment relative to its cost. This calculation aids in assessing the potential return from a stand-alone technological investment compared to a traditional process. ROI represents a ratio measurement; however, its calculation involves percentages By calculating ROI in percentage terms we can easily compare it to their investments and profitability rates.

Is traditional ROI calculus accurate when it comes to construction technology?

The way I like to look at ROI in construction technology is how much risk and inaccuracy can it prevent? Now this is not an exact formula. The improvement is noticeable in our back-office work, with productivity boosted by intuitive tools and democratized information for jobsite teams, all updated in real-time through the cloud.

Clear advancements in construction tools and machinery over the past 30-40 years have significantly eased the job. Tech adoption streamlines processes, boosts productivity, and reduces risks, leading to timely task completion in construction back-office

Today’s construction site and back-office would lack efficiency and productivity without technological improvements, innovative tools, and software. It is a fact that technology propels the construction industry to move forward with minimum error margin.

Why measure the ROI in construction technology investments?

Justify further technological investments: 

Integrations.This is the word we have heard over and over again during a customer’s market research. Software integrations are defined as:

‘’The process of bringing together the component subsystems into one system and ensuring that the subsystems function together as a system, and in information technology as the process of linking together different computing systems and software applications physically or functionally, to act as a coordinated whole’’

Smaller tech firms integrate few systems, becoming costly for their main audience and too limited for larger clients. These companies often lag behind due to relying on a hybrid of single software solutions and manual processes. Construction companies can justify further technology investments and eliminate time-consuming, high-risk manual data input through ROI analysis. 

Put a number on the total return to your costs:

 ROC (Return on Costs) is the term used to indicate the ratio of the total costs to the sales of a company. The lower this indicator value is, the better the financial result. Meaning that for every 1 dollar of sales, the company was able to create it at a lower cost. Indicating that a technology investment reduced labor costs and increased profitability is significant for a company. 

Enables your team to be onboard with technology: 

This one feels a bit more personal for me, trying to get my team to use this. It seems like every office has a technology averse activist, you know the one that states on a daily basis that ‘’this just doesn’t work’’.

Well, not with that attitude! Onboarding technology requires time and training, not all tools are self-taught and they don’t have to be. The truth is these tools facilitate workflows and require minimal knowledge of each step to proceed smoothly. After successfully and enthusiastically onboarding a team, you can proceed with the ROI calculation.

Show stakeholders the ROI generated from technological investments through tangible numbers and efficiency boosts

Why is efficiency boost in a construction back-office even related to ROI calculations?

Well, it’s easy. Saving time with manual processes means you can focus your attention on essential tasks, making your work more efficient while saving the company money. There’s always a cost to keeping processes the way they are, do you know how much it’s costing you?

The adopter’s challenge

Technology professionals widely recognize that both large and small-medium companies can adopt technology in the construction industry. On the contrary, small and medium-sized companies may have a competitive edge in adopting and implementing technology solutions.

Free Technology: 

Accessibility to free technology and solutions has never been easier, with free mobile apps and cloud-based software widely available. Minimize risks by avoiding high-risk one-time purchases or long subscriptions for platforms your team may not embrace quickly. Softwares like MX Build offer small and medium size companies the ease of free technology adoption and the benefit of 1 on 1 training.

Low Risk:

 Smaller companies carry a low risk factor when it comes to adopting technology in construction job sites and backoffices. To begin with, this is due to the absence of technology. Along with this, the implementations they decide to take over will most likely have a low financial impact. The idea of using intuitive tools that can streamline their job processes motivates everyone within the organization. 

Enthusiastic teams =Exceptional Onboarding Experience = Easily Demonstrated ROI. 

Other considerations of construction tech ROI

If you are determined to put a number on your construction tech investment, here’s a handful of considerations that might come in hand when trying to do the math.

Cloud storage fees:

Nowadays there’s more cloud based softwares, making physical documentation storage a thing of the past. If you don’t have a monthly or yearly subscription, the cloud-based storage for your documentation will most likely retain it for only a limited period. In such situations, it becomes necessary to download your documentation and store it on an external hard drive to ensure its long-term preservation. This precaution will safeguard your data from potential loss.


 Onboarding a new solution will require training. Smaller tech companies offer free training and onboarding while larger companies require a one-time payment for a one-time training course. Consider labor hours for onboarding a smaller company, as it may outweigh one-time training payment savings. Convert those hours into tangible numbers for a comprehensive evaluation.

Installation costs:

These may only be considered by larger companies due to the need for an IT team and labor hours for deployment. Small and mid-sized companies often lack an IT team and are less likely to opt for tools with installation costs. 

Subscription costs and fees: 

Accounting for these costs is essential, not only are they the key factor to your ROI calculation,but they might also translate into a loss. Paying for an annual subscription upfront to save $500, but not using the tool, results in a total loss. To prevent this, try a tool offering at least 3 months free.

Tech support and customer service: 

Even if these two are not translated into a cost, the lack of tech support and customer service translate into a delayed onboarding process which is then quantified as more time to implement = reduced ROI. When onboarding a platform or software, ensure to assess their customer support, including response time, communication skills, and problem-solving willingness.

The case of MX Build

Return on Investment in construction technology is not only a quantifiable measure, it is an environmental improvement of increased productivity and greater accuracy. 

Technology implementation in construction is a trend for 2021. MX Build offers a non-subscription payment tool for construction professionals, including 1 on 1 training and white-glove onboarding. Let us show you how to minimize risk in your monthly draw process, and prevent setting-back the payment cycle for you and your subcontractors.