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Stopping Revenue Leakage in Construction Projects with IoT and a Usage Data Platform

Gerard de Bourbon
Chief Evangelist Officer
My LinkedIn

Digital twins are making a gargantuan financial difference for many large construction companies globally implementing IoT rollouts and Usage Data Platforms

Asset tracking, Usage Allocation, and monitoring projects pay for themselves in little time making them very attractive for executives in these companies.

For decades workers and foreman in some of these large general contractors, have enjoyed perks which although not part of their normal compensation package, have been somewhat tolerated by senior managers who have understood, the hard to monitor practice as an unwritten mode of operations, some examples below will illustrate the various issues experienced by these companies globally.

In construction sites, fuel tanks are brought to refill the heavy machinery operated, however, in many cases it the norm that employees not only fill and top up the equipment on site but their own personal vehicle tanks and at times their family or friends.

Asphalt trucks and equipment are taken away from sites to be used to do small jobs on the side for cash paving driveways in people’s houses, it's easy to load the truck with extra asphalt, a small team can do three or four small driveways and pocket easily four- five thousand Euros on a regular basis, a lucrative supplemental tax free income.

The same goes for cement trucks and equipment used to pour foundations, driveways, pools, some of these workers are part of smaller residential construction companies funding the jobs with equipment, supplies, and tools from large construction projects.

Excavating equipment, cranes, scaffolding, all types of tools are often used to subsidized private side jobs.

By connecting everything with sensors, the operator can easily see and ask why is a truck crew and equipment doing in point A, when it should be in point B? 

With a Usage Data Platform, all events and material usage can be tagged, collected, aggregated, correlated, priced, distributed, and documented to minutia, enabling cost allocations making the senior executives of these companies very happy from the immediate increase in margins and savings on the material taken by the employees.

Furthermore, the company will be able to proactively understand the condition of the equipment and minimize costly downtimes, increase quality and adhere to timelines.

The ROI for these types of projects pays for the cost of the IoT rollout, the Usage Data Platform in weeks or few months.

The CFO will have a single version of the truth and holistic view of the Usage of company assets and materials.

But how to implement this so you don’t have a revolution on the employee base? They will naturally be unhappy by removing these unwritten, unauthorized benefits they’ve received for years.

You need to clearly communicate the fact that the tax authorities are aware of this modus operandi and begun to crack down on these questionable practices in many countries.

A good idea is to make sure the employees understand why, and what justifies the IoT rollout, and reasons for connecting everything, good communications will prevent sabotage and bad moral.

If they know the tax authorities can retroactively claw these individuals with income tax for the net-benefit they received over the years if they are able to quantify it, it will put the "Fear of God " on these employees.

Immediate savings will be evident, contractors lose, tools, materials, wear and tear of overused equipment, fuel, insurance cost, Etc.

To conclude the Usage Data Platform will enable the business to have accurate visibility and accuracy on margins, which will result in more competitive pricing for their clients.

Appreciate your comments and questions, please sing up to our newsletter for more use cases.

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