UK Construction IT Spending To Hit £1bn By 2015


London, April 26th, 2012 – Research from Pierre Audoin Consultants (PAC) shows that UK construction firms are investing in software and IT services to help them survive the current downturn, with areas such as Cloud, mobility and outsourcing all under consideration. A new report from PAC has found that the UK construction industry will spend more than £1bn on IT by 2015.

The sector, which remains in the grip of its most sustained post-war downturn, has traditionally been low-tech, with only a small percentage of the industry’s two million employees being a ‘technology worker’.

But the need to reduce costs and respond more rapidly to volatile market conditions is driving investment in new software and IT services (SITS), which is the fastest-growing area of construction IT spending.

Construction firms are investing in three key areas to support their transformation agendas. First of all, there is the need to drive standardisation across infrastructure, applications and networks. Connaught expects to reap annual cost savings of £3m per annum after implementing a standard Microsoft Dynamics platform. The second focus area is outsourcing and shared services, with PAC’s research suggesting that just five of the top 25 construction firms having outsourced their IT. Taylor Wimpey has managed to reduce its infrastructure unit cost and standardise across a single ERP platform through its outsourcing contract with Logica.

PAC believes that cloud delivery models will see a strong adoption in the construction sector. The low level of legacy systems coupled with the fluctuations in project workloads makes pay-as-you-go models an attractive proposition for construction businesses.

Finally, mobility and collaboration are hot areas of investment as construction firms look to improve the productivity of their geographically dispersed workforces and wider supplier communities. The former is generating interest as more powerful, rugged devices come to the market while firms are looking to improve collaboration through the use of social media tools such as Closed Twitter Groups.

Dominic Trott, a Consultant at PAC, says: “Market turbulence is causing construction firms to re-appraise their approach towards IT, as they look to become leaner and more agile organisations.”

PAC’s report ‘UK Construction – How Software and IT Services Will Support the Sector’s Recovery’, is the latest in the new UK local research programme. It analyses the strategies of key decision-makers at leading UK construction firms, and provides a view of how the market will shift towards the externalisation of IT.

It also includes data on the current and future scale of software and IT services spending in this sector, as well as a detailed breakdown of the market landscape, industry pain points and the supplier landscape.