Study Shows Significant Benefits for General Contractors Utilizing Technology to Manage Subcontractors

A new study from Dodge Construction Network, in partnership with GCPay, reveals that only one in three (34%) of general contractors automate fewer than half of their subcontractor management processes. The report details data-based benefits of greater automation and digital transformation by general contractors, including increased productivity, profitability and cost performance.

Most general contractors rely on subcontractors to generate successful projects, making managing subcontractors vital to their business. Many general contractors are also experienced in utilizing digital tools for these processes; however, as the Optimizing Subcontractor Management with Technology SmartMarket Brief reveals, many general contractors rely on a proliferation of older solutions, making integrating data across processes challenging.

The findings show that half of respondents depend on solutions that tend to create data silos, such as generic software, internally developed software for a specific task or commercial software that only handles one or two of the many processes needed to manage subcontractors.

To evaluate where new adoption will focus, the study benchmarks the general contractors’ use of technology to manage 12 key processes essential to the management of subcontractors including accounting, finance and contract management. Those using technology report a variety of advantages, with the top benefits spanning performance, process and business improvements, including:

• Improved productivity: 91%
• Improved cost performance: 81%
• Improved profitability: 79%

Those using either platform or single-purpose commercial solutions on half or more of the processes they conduct report greater benefits. At least twice as many general contractors frequently experience improved productivity and profitability at a high to very high level when compared to those less engaged with commercial solutions.

Encouragingly, the report also reveals that contractors not automating some of these processes actively plan to do so in the near future. The highest growth is expected in processes including schedule of values/subcontracts, change orders, applications for payment and general subcontract management.

However, the findings also show that just 9% of companies are planning to automate several other critical processes, such as OSHA compliance and reporting, and tier vendor management, indicating the ongoing need for understanding the value of automation amongst contractors. As the study shows, those that optimize subcontractor management with technology also experience the largest number of benefits.