Increasing Digitization Transforming the Construction Management Solutions Market, 2020

Increasing Digitization Transforming the Construction Management Solutions Market, 2020

A Younger Workforce, Mobile Devices, and Increasing Documentation Encourage the Transition from Pen, Paper, and Spreadsheets to Dedicated Software

RELEASE DATE
29-Oct-2020
REGION
North America
Deliverable Type
Market Research
Research Code: K53D-01-00-00-00
SKU: IT04210-NA-MT_24908
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Description

The construction management solution (CMS) market is crowded with numerous small and large vendors competing for customers and market share. Among the most important sources of competitive differentiation are the depth of a vendor’s product line strategy and the ability to address the needs of a variety of stakeholder groups involved in a construction project from start to finish.

Software use grows with company size: construction firms with annual revenue of between $1 million and $50 million have roughly 80% manual processes (spreadsheets, paper contracts, and long-term employees with good memories); conversely, more than 35% of construction firms with annual revenue of $50 million to $100 million have adopted CMS software, although many of those are point solutions with data integration and workflow issues.

Vendors typically provide only point solutions for project management, construction financials, quality and safety, or field productivity and focus on either a single stakeholder: an owner, general contractor, or specialty contractor. Few vendors have been able to provide solutions across the entire stakeholder ecosystem, let alone provide end-to-end solutions that integrate successfully with existing software widely used by their customers. Some large vendors have bought and consolidated point solutions into end-to-end solutions, but few have developed them that way from the start, much less grown their business organically. Migration from point solutions to platforms is driven by reporting, data flow, and integration needs. Some smaller vendors consider themselves enterprise resource planning solutions with integrated accounting for payroll.

More than 90% of general contractor businesses are private and/or family-owned. The move to the cloud is driven by generational influences as a younger demographic joins the family business and wants to update technology. Owners and specialty contractors are seeing the same phenomenon.

Construction management is a global business with widely differing project sizes requiring vendors to consider growth strategies across regions and construction types: residential, commercial, industrial, and/or infrastructure. Contract/documentation tracking for control management, risk mitigation, and legal recourse is critically important beyond tracking project progress.

In this project, market size has been derived from the bottom up from vendor subscriber and revenue metrics. Frost & Sullivan’s projections for CMS revenue in the 7 studied countries (the United States, Canada, Mexico, Australia, New Zealand, the United Kingdom, and Ireland) depend on the weighted averages of expected impacts of drivers and restraints through 2024.

Author: Robert Cavin

Table of Contents

Key Findings

Key Findings (continued)

Market Engineering Measurements

CEO’s Perspective

Digital Media Value Chain

Project Scope

Market Definitions—Product Segments

Market Definitions—Target Customer Segments

Key Questions this Study will Answer

Market Drivers

Drivers Explained

Drivers Explained (continued)

Drivers Explained (continued)

Drivers Explained (continued)

Market Restraints

Restraints Explained

Restraints Explained (continued)

Restraints Explained (continued)

Restraints Explained (continued)

Forecast Assumptions

Revenue Forecast

Revenue Forecast by Segment

Market Share Forecast by Segment

Revenue Forecast Discussion

Revenue Forecast by Region

Market Share Forecast by Region

Revenue Forecast by Region Discussion

Market Share by Customer Size

Market Share by Target Customer

Customer Segment—Owners

Customer Segment—GCs

Customer Segment—SCs

Market Share

Market Share Discussion

Competitive Environment

Autodesk

Oracle

Procore

Trimble

Other Major Participants

Competitive Factors and Assessment

Growth Opportunity 1—Convert Pen and Paper and Spreadsheets to Software

Growth Opportunity 2—Convert On-Premises Solutions to Cloud and Mobile

Growth Opportunity 3—Expand CMS Functionality from AEC to EPC

Growth Opportunity 4—Expand to Other Vertical Segments

Growth Opportunity 5—Acquire and/or Merge with Complementary Vendors

Strategic Imperatives for Success and Growth

Market Engineering Measurements

Revenue Forecast

Revenue Forecast—NALA

Revenue Forecast—EMEA

Revenue Forecast—APAC

Revenue Forecast Discussion

Market Engineering Measurements

Revenue Forecast

Revenue Forecast—NALA

Revenue Forecast—EMEA

Revenue Forecast—APAC

Revenue Forecast Discussion

Market Engineering Measurements

Revenue Forecast

Revenue Forecast—NALA

Revenue Forecast—EMEA

Revenue Forecast—APAC

Revenue Forecast Discussion

Market Engineering Measurements

Revenue Forecast

Revenue Forecast—NALA

Revenue Forecast—EMEA

Revenue Forecast—APAC

Revenue Forecast Discussion

The Last Word—Predictions

Legal Disclaimer

Market Engineering Methodology

Market Engineering Measurements

Research Methodology and Scope

List of Companies Investigated

List of Exhibits

List of Exhibits (continued)

The construction management solution (CMS) market is crowded with numerous small and large vendors competing for customers and market share. Among the most important sources of competitive differentiation are the depth of a vendor’s product line strategy and the ability to address the needs of a variety of stakeholder groups involved in a construction project from start to finish. Software use grows with company size: construction firms with annual revenue of between $1 million and $50 million have roughly 80% manual processes (spreadsheets, paper contracts, and long-term employees with good memories); conversely, more than 35% of construction firms with annual revenue of $50 million to $100 million have adopted CMS software, although many of those are point solutions with data integration and workflow issues. Vendors typically provide only point solutions for project management, construction financials, quality and safety, or field productivity and focus on either a single stakeholder: an owner, general contractor, or specialty contractor. Few vendors have been able to provide solutions across the entire stakeholder ecosystem, let alone provide end-to-end solutions that integrate successfully with existing software widely used by their customers. Some large vendors have bought and consolidated point solutions into end-to-end solutions, but few have developed them that way from the start, much less grown their business organically. Migration from point solutions to platforms is driven by reporting, data flow, and integration needs. Some smaller vendors consider themselves enterprise resource planning solutions with integrated accounting for payroll. More than 90% of general contractor businesses are private and/or family-owned. The move to the cloud is driven by generational influences as a younger demographic joins the family business and wants to update technology. Owners and specialty contractors are seeing the same phenomenon. Construction management is a global business with widely differing project sizes requiring vendors to consider growth strategies across regions and construction types: residential, commercial, industrial, and/or infrastructure. Contract/documentation tracking for control management, risk mitigation, and legal recourse is critically important beyond tracking project progress. In this project, market size has been derived from the bottom up from vendor subscriber and revenue metrics. Frost & Sullivan’s projections for CMS revenue in the 7 studied countries (the United States, Canada, Mexico, Australia, New Zealand, the United Kingdom, and Ireland) depend on the weighted averages of expected impacts of drivers and restraints through 2024. Author: Robert Cavin
More Information
Deliverable Type Market Research
No Index No
Podcast No
Author Robert Cavin
Industries Information Technology
WIP Number K53D-01-00-00-00
Is Prebook No
GPS Codes 9523-D1,9705-C1,9A3C-D1