There is a need to spread awareness about e-commerce as an internet-based application that offers many benefits to the construction industry such as faster deliveries, cheaper prices, efficient procurement tracking and informed purchasing decisions, writes Vishal Mehta, Founder-CEO, Infibeam.com.
Increase in internet penetration and evolution of technology as services has made the dream of e-commerce a reality. The impact of e-commerce is too substantial to ignore for any business. The greater use of internet and e-commerce, and the move towards the integration of applications will compel construction companies to reengineer processes and introduce e-commerce systems. There is a need to create and spread awareness among the construction industry of internet-enabled applications and the need to adopt e-commerce as a business application. Considerable time and resource need to be invested in the development and implementation of e-commerce initiatives.
Though the challenges to success of these e-commerce initiatives are numerous, quantifiable success will vary from company to company representing the industry. With the use of e-commerce applications, different stakeholders in the construction supply chain could derive business benefits by overcome traditional process inefficiencies.
E-commerce offers a huge opportunity to negotiate bulk prices, purchase hard-to-find products from and sell surplus materials to a market that expands well beyond traditional regional boundaries. It offers opportunities for sellers and better selection and prices for consumers as it provide contractors with real-time access to the inventories of suppliers.
Using e-commerce, contractors can chose from a list of vendors, locate those with available supplies and negotiate price and delivery terms. The user friendly interface of the application enables users to access information like graphic and specifications from vendors across the country or around the globe. Other features like online queries and quotations request through ecommerce applications helps saving time, use of paper work and reduce human intervention.
While the construction industry strives to become more client-oriented, it is also facing ongoing challenge to enhance current work practices. This trend is influenced by a number of factors, including greater performance expectations by clients, globalisation of the economy, increased competition between contractors, continued restructuring of work practices, industrial relations, and industry’s need to implement information and communication technologies.
Despite the unique and individual nature of any construction project, it requires involvement by many participants, such as clients, designers, consultants, contractors, subcontractors, and suppliers, as an entity to perform various roles and responsibilities. Sharing up-to-date information between participants leads to reduction of errors and time delays and consequently facilitates more effective and efficient productivity and ultimately improves collaboration and teamwork.
Primary e-commerce platform effects are more on information-related activities such as creation, retrieval, delivery of information and effective communication, which assisted increasing productivity. On the other hand, it affects activities related to efficient material handling information processing through the use of information technology, which contributes to inventory reduction.
Through applications of e-commerce technologies in the construction supply chain, organisations and participants can benefit from lower transaction costs; reduced staffing requirements; shorter procurement cycles; decreased inventory levels; higher degree of transparency; provision of information on demand which promotes more frequent and intense use of it; connection to operations across organisational boundaries; enlargement of the span of effective control and coordination; improvement in the quality of decision-making processes; and enhanced communication and collaboration between supply chain members and organisations.
Delay in project progress is a costly affair and is a big concern for the construction industry which is primarily due to inaccurate and untimely communication amongst project team members. Often information needs to be reentered or hardcopy manuals and drawing documents need be reproduced to have rapid access to the required information to perform some of their tasks. The rapid development of internet, and information and communication technology have generated the evolutionary online business solution and electronic-commerce (e-commerce) both of which are to provide support for information and workflow control, and process management as well as enhance communication. E-commerce platforms act as catalysts and as a mainstream to improve productivity and information flow and communications.
E-commerce solutions offer faster deliveries, cheaper prices, efficient procurement tracking and more informed purchasing decisions. Although e-commerce offers tremendous opportunities to the construction industry, these opportunities are not without challenges. The exact benefits of using e-commerce within the construction industry are not known and more needs to be done to establish the effects of incorporating e-commerce applications into construction business processes and to demonstrate the opportunities of e-commerce for construction.
Despite the benefits of e-commerce technologies to the construction industry, there are many challenges in its applications. In many instances, the potential of e-commerce technologies has not yet been fully and properly utilised, as many companies are simply utilising various technologies to automate existing processes without analysing the company’s objectives and realistic needs. In addition, significant people and culture issues need to be addressed to overcome resistance to change and achieve radical revision.