Construction


The construction industry encompasses a wide variety of products and services: project engineering, manufacturing, and specialized services for the construction of houses, hospitals, highways, buildings, shopping centers, and more. Typical construction industry businesses include residential building companies, commercial and administrative (non-residential) building companies, public constructors (roads, bridges, power, water and other projects), civil engineering companies, building rehabilitation and maintenance companies, and building equipment contractors.
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Generally speaking, the industry is comprised of firms of all sizes, types of ownership, and areas of business. However, there are some similarities that derive primarily from the nature of the industry:

  • Construction companies are entirely project-management-driven, since each project is unique and requires the use of project management methods.
  • Construction companies are characterized by a high level of specialization, whether vertical (based on employee skills, the tools and the materials used, e.g., plumbing, roofing) or horizontal (based on project types, e.g., bridges, residential buildings, roads).
Like other industry segments, construction organizations deal with some general challenges arising from global and regional economic conditions, intense market competition, and standards compliance. The construction industry must also face some very specific challenges:

  • Local construction companies are in competition with global companies, and must therefore demonstrate competitive advantages that global companies do not have—and vice versa.
  • Construction firms must manage projects that are costly and that require long-term investment resources, from both customers and contractors.
  • Organizations in the construction sector must comply with a large number of national building codes and regulations in many areas (construction processes, health and safety issues, procurement, etc.).
  • Construction companies must deal with market demand for more energy-efficient buildings, healthier indoor environments, and construction quality enhancements.
  • Material and component price escalations, transport constraints, and fuel price fluctuations are examples of micro- and macro- economic factors strongly influencing the construction industry.
  • Construction companies must address the need to properly manage fixed assets.
Because the construction industry is capital-intensive, construction companies need to be able to manage all resources accurately in order to increase profit while encouraging quality and business model improvement. Companies from the construction industry can take advantage of software solutions such as enterprise resource planning (ERP) systems that specialize in service delivery to support specific construction project portfolio management (PPM) and back-office operations, among other operations.

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