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THE
ULTIMATE GUIDE TO
CONSTRUCTION
INSIDE

DATA ANALYTICS What is Analytics? (and what it isn’t)

Why Most Data Strategies Fail to Lift Off
5 Construction Problems Analytics Can Solve
 At Briq, we believe in the new paradigm of data-
driven decision making, but we see too many
companies asking the wrong questions, investing in
WELCOME
the wrong tools, and truly missing the point on what
data can and should do.
There is no doubt that deep analytics will change
TO THE
construction– in fact, it will change the entire global
economy. In the words of Hal Varian, Google’s Chief
Economist, “A billion hours ago, modern homo
ANALYTICS
sapiens emerged. A billion minutes ago, Christianity
began. A billion seconds ago, the IBM PC was
released. A billion Google searches ago…was this
REVOLUTION
morning.”
Today, we have the technology to measure and
record nearly every action in the real world, and as a
result there is more data being produced than ever
before. In 2000, only 25 percent of data was stored in
a digital format. Today, that number is closer to 97%.
Deep data analytics is not just a function of how much
data is being collected, however. The tools to manage
and process millions and billions of data points is just
as important as the data itself– in some cases it’s
more important. In this vein, the most significant
mindset a contractor or subcontractor can take when
2
beginning down the road of data analytics is ask
themselves: “what challenges do I want to solve?”.
Questions like where is my data? or how do I move
data between systems? are important but they don’t
provide real business value at the end of the day. Too
many companies waste precious resources on
running reports from complex Excel files, when in
reality they just want to know what their fee will be at
the end of a project. Instead, ask the what first (what’s
my fee?), leave the how up to your data analytics
platform. Smarter construction begins with smarter
questions.
We’ve prepared this guide to demonstrate some
critical questions that can be solved with our own
data analytics platform. Briq uses modern technology
and techniques to address these logistical questions,
leaving you, the contractor, to focus on more core and
strategic issues.
We are closer now than ever before to providing real
solutions to real-world construction challenges. We
hope you find this guide valuable as you think about
your own challenges and how you can run a more
data-driven company.
TABLE OF
CONTENTS

1 – A Brief History

2 – Business Intelligence ≠ Data Analytics

3 – Solve For Problems

 4 - Bid on the Right Projects

5 - Enhance Fee

6 - Hire Better Labor and Subs

7 - Negotiate Better Contracts

GET STARTED.
 “A billion hours ago, modern
homo sapiens emerged.
A billion minutes ago,
Christianity began.
A billion seconds ago, the
IBM PC was released.
A billion Google searches
ago…was this morning.”
Hal Varian, Chief Economist, Google

5
 A brief history
of construction data.

1957

6
1980s

On-premise computing

2000s
Cloud storage costs reach record lows.

7
 2019
Briq launches the Construction Data Analytics Cloud

Your data is telling a story.

Are you listening?
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BI ≠ Analytics
AI Based Data Analytics

ü Statistical and mathematical data analysis that clusters, segments, scores, and predicts

ü Data queries are automated and run in real-time on NoSQL databases

ü Machine learning models learn on massive unstructured data sets

ü Answers complex questions with more accuracy

Beyond BI 🚀 o Resource intensive to build internally

Business Intelligence (BI)

ü Reports on historical data only

ü Smaller data sets

ü Ad hoc queries are run by humans on structured data in a SQL database

ü Slow, outdated. Very limited in answers it provides.

9
 Focus on
No more science projects Garbage in, Garbage out

the problem.

IT as a Facilitator Data needs a story

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 How you choose projects is as important– if not more important– than how you run
them. The ability to baseline historical data and understand your sweet spot can result in
massive savings in project execution. Do I know my most profitable client? On which
type of project am I performing best? What markets should I expand into based on my
previous history?

1 ARE WE
These are exactly the questions Skanska, the Swedish multinational, asked itself in 2018
following nearly $400 million in write-downs and restructuring charges. The company
had a dismal performance in 2018, and asked itself a fundamental question: are we

BIDDING
choosing the right projects?

“We have better controls now and focus on profitability over volumes. We also have

ON THE
better processes in place to analyze risk, calculate the projects, make sure we have the
right staffing and choose the right projects,” says Anders Danielsson, CEO of Skanska AB.

RIGHT Even for one of the industry’s largest players, maintaining profitability on projects is a
huge challenge. To solve this, Skanska assessed 10 years of project history and baselined

PROJECTS?
profitability across project size, client profiles, sector niches, and geographies. With a
better understanding of the ideal project profile, Skanska can now prioritize what will
keep them profitable. “We have a good view of our sweet spot and we only select
projects within that sweet spot.”

The result? While early, it seems the move has worked. The company’s stock is up 19%
YTD, and operating margin seems to have recovered from last year’s lows.

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 Once a contractor has found its sweet spot, running that project then becomes the focus.
Everything from ensuring materials arrive on site to managing labor are all part of the
job, and it can feel like chaos to ensure all parts run as smoothly as planned. But by
identifying and baselining historical project performance and looking at leading
indicators, patterns emerge.

2
In the fluid and complex environment of a construction project, the materials, machines,

HOW CAN money, and manpower are all costs that change over time and tend to vary greatly
between projects. Deep data analytics and sophisticated data technology that tracks and

WE ENHANCE
forecasts those elements in real time significantly improve project planning and
oversight.

PROJECT
Performing an end-to-end analysis of previous projects and financial data provides
information on historical project performance that identifies common costs in current
projects while offering directives for accurate project pricing. The emergence of cloud-

FEE?
based software has democratized data capture, and in turn has created a large market
segment of cloud-based project management, cloud-based time tracking, customer
relationship management software, and accounting platforms. These vendors provide
tools that allow for the “digitization” of workflows, but they still don’t address the core
functions needed to put that data into action.

For example, a GC that wants to know the true health of a project needs more than just
the number of outstanding RFIs. Instead, he would want to look at the number of RFIs
relative to historical project performance, and he would want to look at subcontractor
performance on a trending basis, not just for that one project.

With modern analytics tools, such as natural language processing, that “dark” data can
be extracted and used to benchmark performance.

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 People Analytics, also known as Coaching Networks, is an emerging field of data
science that seeks to unearth learnings about employees’ past experience, their
strengths, and their weaknesses, all in the effort to better manage teams and produce
productive and healthy working environments.

Emergence Capital–the enterprise cloud venture capital firm behind Zoom, Guru, and

3 ARE WE
Salesforce– sees this future as humans and AI working together; a term they refer to as
Coaching Networks.

HIRING
“Coaching networks act as a real-time, on-the-job coach, guiding employees to
successful outcomes and gathering new creative behaviors that are fed back into the
system. Rather than dispensing one-size-fits-all advice, Coaching Networks offer

THE RIGHT
advice tailored to each worker and the task they’re doing.”

As automation changes how work is done, improving the quality of jobs and re-

LABOR? distributing responsibilities in an organization requires careful planning and should be

driven by data analysis.

What members of your team work best together? What industries or geographies are
my employees best-suited for? How can I set my team up to succeed and make better
decisions at critical times? Human capital data analytics answers these questions and
more.

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 Perhaps the greatest risk a general contractor faces is exposure from an
underperforming subcontractor. Many contractors have built systems to mitigate that
risk by requiring subs to bond, or by developing strong relationships over time, but a lot
of historical data is ignored when it should be the core of bringing a sub into a project.

“A major component of risk management is understanding the risk that you've got with

4
subcontractors,” says the Chief Administrative Office of a large midwestern contractor.

ARE WE “And being able to identify what work we can self-perform in order to control the critical
stages of a contract.”

HIRING Risk in a subcontractor can come from almost anywhere. Does the sub review scope of
work early enough in a project? Do you know how often the subcontractor has

THE RIGHT
performed over-budget or over-schedule? Do you know its full OSHA violation history?
Data analysis tells a complete story of each contractor to help you understand their
strengths and weaknesses. Maybe analysis shows you’d be better off self-performing in

SUBS?
some cases.

“What I don’t think that companies have yet gotten to is the elimination of waste,” says
Erin Roberts, the Global Head of Construction of Ernst & Young. “We estimate that about
20 to 30 percent of a contract’s ultimate cost is actually rework, errors, inefficiency, and
so you're talking about a very material portion of costs that could be eliminated.”

A lot of this risk comes from a subcontractor not understanding the scope of work. In
other cases, teams change and knowledge is not transferred from the general contractor
to the subs performing on site. On a large high-rise project, there could be dozens of
separate subcontractors working on the same floor. The ability to see, in real time, how
these vendors are performing will help GCs to understand outliers and underperformers.

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 The ability to anticipate outcomes in a project and account for them in general
conditions is a huge advantage. What if a GC or subcontractor could use data to
generate the “Ifs” of a contract? In the world of prediction technology, this is more
possible than ever.

Take weather as an example. Construction projects are often delayed by acts of God–
water, snow, wind, fire– yet, GCs can still be held liable for those delays in general
conditions. Subcontractors may also cite weather as a reason for delay and leave the

5
GC in the lurch. How could predictive analysis combat this?

CAN WE The airline industry is a great example of dealing with weather in contract
negotiations. The slightest weather delay in a route ripples through an airline in

NEGOTIATE
crushing ways. When a delay does happen, major carriers will turn to the regional
players to help carry the burden, but not without a cost– regional carriers charge the
majors exorbitant fees for these unexpected changes. The result? Major carriers choose

BETTER to operate smaller routes in weather-prone areas because it is still less risky than the
alternative. Ajay Agrawal and Avi Goldfarb write about this specific issue in their book

CONTRACTS?
Prediction Machines:

“Suppose that AI allows airlines not only to forecast weather events but to generate
predictions for how best to deal with weather-related interruptions. This would
increase the returns to major airlines for being more specific in their contracts to deal
with contingencies. They can specify a greater number of “ifs” in the contracts. Thus,
rather than controlling airline routes through ownership, the major airlines would have
the predictive power to more confidently write contracts with independent regional
carriers, allowing them to take advantage of those carriers’ lower costs. They would
require less capital equipment (such as airplanes), because they could outsource more
flights to the smaller regional carriers.”

Ask your data how you could better-shape your contracts to protect against risk from
suppliers, owners, clients, and more.

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 84
“What percentage of my
backlog is likely to have
permit delays?”
Average contractor backlog, Q2 2019

“How can I maximize supply

chain to enhance Fee?”
Average fee at project end (KPMG)
1.54%
$400 m
“Should we pursue this
project?”

Skanska write-downs in 2018

50%
”Am I hiring the right
subcontractors”

Average decrease in unpaid change

orders with data analytics.

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 DO YOU WANT TO
TAKE YOUR DATA
STRATEGY
BEYOND BI?

Visit
www.br.iq/demo
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