Resource management is one of the leading causes of project delays, resulting in significant reputational damage, budgetary losses, and even the failure of projects over time. But could fintech provide vital support when it comes to the successful management of resources for construction firms? 

Data suggests that more than 25% of projects face delays that exceed 250 days due to both avoidable and unavoidable factors. While sometimes it can be impossible to steer clear of disruption, resource management issues can be a key contributor to issues. 

Resource allocation challenges can emerge as a result of unclear project objectives and scope, creating major budgetary and operational drawbacks. 

Given its proximity to payments and inventory, fintech can be an essential tool for construction firms to gain better control over their resource management to avoid drawbacks and further disruption. 

Moreover, finance technology can help to not only to provide better control over resources but also to drive far greater efficiency throughout many different core areas of projects. With this in mind, let’s take a look at four key use cases in how fintech is helping to solve critical resource management issues in construction: 

1. Optimized Cash Flows

Cash flow issues can derail entire projects and carry severe ramifications for resource management because of procurement shortfalls and labor issues. 

But fintech-focused solutions like blockchain are helping to bring automation into the construction industry with more prompt payments upon predetermined conditions. Because blockchain technology can work closely with smart contracts, payments to subcontractors can be released when pre-defined milestones are met, reducing instances of payment disputes and improving cash flow efficiency.  

One example of a company using blockchain and smart contracts is Spanish infrastructure firm Ferrovial, which has significantly reduced its payment times for subcontractors to improve relationships in resource management as a result. 

Additionally, artificial intelligence tools are helping to deliver real-time invoicing that can speed up approval processes for consistent cash flow and a reduced administrative burden. 

2. Data-Driven Inventory Management

Fintech tools can also work with Internet of Things (IoT) technologies to significantly improve inventory management, helping to bring far better efficiency when managing resources. 

Thanks to the combination of IoT sensors and RFID capabilities, firms can track materials and tools on site, reducing the risk of theft or misplaced assets. 

IoT tools can also support better inventory monitoring, offering real-time updates on inventory levels to alert managers to low stocks. Advanced automation tools can even execute resource orders without the need for human intervention for even more effective project management. 

Inventory management has been made more efficient through the deployment of dedicated apps that help to set up orders to ensure that you’ll have all the materials needed on site at the ideal time. 

Similar technologies are being used to reduce waste by accurately tracking material consumption against project milestones. 

3. Predictive Cost Control

Intelligent integrations are helping to make cost control more effective than ever before. For instance, Building Information Modeling (BIM) is being increasingly used alongside fintech tools to develop a ‘single source of truth’ to assist the real-time tracking of costs and materials against 3D project models. 

This helps to prevent excessive resources while ensuring that no oversights are made during the procurement process. 

Thanks to the evolution of predictive analytics, more fintech platforms can naturally incorporate AI insights to analyze historical data, forecast prospective overruns, and improve budget accuracy, helping project managers to quickly identify and correct any discrepancies before they become a more pressing matter. 

4. Real-Time Resource Management

As we’ve touched on earlier, IoT sensors are an excellent tool for resource management, and can seamlessly integrate with fintech to ensure that operations continue to run smoothly throughout the lifecycle of projects. 

While IoT sensors can help to automate the receipt of inventory, they can also monitor machine performance, utlization, and maintenance needs on a proactive basis, opening the door to preventative fixes rather than prolonged downtime due to an unforeseen breakdown. 

Globally renowned firms like Skanska are major IoT adopters, which can help to keep costs lower while automatically paying out for maintenance before emerging issues have the opportunity to disrupt projects. 

Similarly, wearable IoT devices can feed data to platforms that monitor onsite activities, helping managers to track labor more effectively for accurate payouts based on hours worked and overtime. 

Supporting Resource Efficiency

While much has been made of the ongoing AI boom, it’s fintech that’s still creating more efficient use cases throughout the construction landscape, paving the way for greater instances of project success while mitigating the risks of costly overruns due to preventable resource management issues. 

Working alongside IoT technology, fintech has the potential to automate critical cash flow considerations such as inventory top-ups and anticipatory maintenance for machinery, helping more projects to run smoothly and construction firms to reap the benefits of positive subcontractor experiences.