From materials pricing to labour costs, the challenges facing businesses in the construction sector are significant. In particular, as the Labour government announces new social housing programs and encourages further development in the UK, construction businesses need to be able to operate without succumbing to common industry pain points.
Digital procurement software solutions provider ProcurePro has unveiled the findings of its latest investigation into the most pressing procurement challenges facing construction companies. The report sheds light on the inefficiencies and complexities that have long plagued the industry. It draws on over 20,000 hours of research and discussions with construction professionals. The results reveal the top pain points affecting procurement teams. These range from a lack of visibility over procurement status to inconsistent quality across projects.
The biggest recurring problems faced by procurement professionals in the construction sector boiled down to the following:
1. No visibility over procurement status
A lack of access to critical information “leaves the big picture half-painted.” This makes it nearly impossible to assess packages at risk in time to avoid problems.
2. Manual processes are labour-intensive
A mixture of human-errors, staff shortages, and legacy technology threaten to overwhelm procurement teams. Emails, phone calls, and spreadsheets still dominate procurement workflows, according to the report. Organisations can and should automate the majority of these processes to save time, reduce errors, and increase productivity, they add.
3. Disconnected workflows
Siloed and disconnected workflows prevent procurement teams from fully capturing the hundreds of steps involved in getting a package from tender to delivery. According to the report, those steps are part of, generally, around 20 different processes running on a few core systems.
4. Delayed procurement puts projects behind
A KPMG study found that, over a three-year period, only 25% of construction projects were completed within 10% of their deadlines, and only 31% came within 10% of budget. Problems in the procurement process can have cascading effects that harm the entirety of a project as it is carried out.
5. Reporting lacks actionable insights for all levels
ProcurePro’s report argues that “reports are often done for the sake of it.” Not only that, but meaningful analysis often coming as an “afterthought.” Reports are out of date the minute they’re produced and because they don’t always contain relevant data for everyone, are shallow on actionable insights, they add.
6. Everyone does things differently
A lack of standardisation across the industry means that “Two people trained the same way and working on the same projects will find different ways to reach a solution.” Adopting unified technology stacks can, ProcurePro argues, unify these disparate processes.
7. Quality drops as volume increases
As the number and size of projects grow, so too do the problems facing procurement teams. “Having scalable, standardised practices in place on a single procurement platform ensures consistent quality as headcount grows,” argues the report.
8. A lack of supply chain insights
Large construction companies often have ecosystems comprising thousands of suppliers, subbies, and partners. This type of scale creates monumental demand for due diligence in compliance checks, workload assessments, and performance ratings.
9. Scope-of-works gaps
ProcurePro’s research points to the fact that contractors typically lose 10-15% of their margin on variations caused by missing or inconsistent scopes, which then push back projects. The report argues that “Drafting scopes is one of the most time-consuming parts of procurement and has the criminal combination of being easy to mess up and very costly when you do.”
10. Contracts take too long to get signed
Contracts in the construction sector can mean it takes anywhere from a few days to a few weeks to move a procurement package from the recommendation to contract signing stage. Lost time is lost money, and in worst case scenarios can result in subcontractors showing up at the site before necessary contracts are signed, creating legal and safety issues.
11. Avoidable errors are common
Human error remains the most common source of procurement problems, delays, and compliance breaches. ProcurePro’s research estimates that avoidable errors erode between 0.5-1% of construction companies’ profits on projects — an estimated total of around £61 million for the sector as a whole each year.
12. Staff satisfaction, recruitment, and training
“Construction is an industry that runs on the power of people, relationships, and cooperation.” The success of a project might be measured in financials, but for the people working on the project, is it worth it if the work brings misery?” asks the report. A smoother procurement process reduces stress, turnover, and burnout, alleviating pressure on an already overworked sector.
“Procurement is often seen as a necessary but tedious part of the construction process,” said Alastair Blenkin, CEO at ProcurePro. “But the truth is, it plays a critical role in determining the success of a project. By addressing these core issues, companies save time, reduce costs, and improve the overall efficiency of their procurement processes.”
