Blockchain technology could single-handedly change the construction industry. As a whole, the industry has been in need of an overall disruption, but has struggled to embrace new technologies. The global pandemic, however, forced many companies to shift to new approaches in order to quickly adapt to the changing world, and as a result, the industry has recently become more receptive to new digital innovations. Blockchain, in particular, presents the opportunity to transform how we manage construction projects, process invoices, and pay our employees. In fact, if adopted more broadly, it has the potential to revolutionize how we work.
What is blockchain and how can it help us manage construction projects more effectively?
Blockchain is a decentralised database which chronologically and securely records data. Each ‘block’ of data has a unique relationship with the one before and after it, creating a verifiable ‘chain’ of information. Cryptocurrencies are the most well-known for their use of blockchain, but the same technology can be applied to manage any business transaction.
Here are three ways you can apply blockchain in your next project:
Smart Contracts using Blockchain eliminate the need for a middleman. Traditionally, construction contracts can take weeks and can slow down construction projects. Smart contracts use blockchain to document and enforce the terms of an agreement. They are automated, programmable and don’t require third party involvement, saving your company valuable time and money.
Building Information Modeling (BIM)
By using BIM, construction professionals can plan, design, construct and manage buildings and infrastructures. BIM can be used to generate 3D models as well as compile information on the various construction projects as well as the documentation related to the project. Further, because each block of data is unique, all changes to any plans can be traced to their author, leading to higher levels of transparency and documentation when collaborating with different partners.
Payments on construction projects are often delayed, which can negatively impact relationships with clients and stakeholders. Many companies have difficulty tracking who has been paid, when and for what. With Blockchain-enabled payment systems, paying various vendors is seamless,quick and secure. All transactions and payments are always recorded, ensuring financial transparency throughout an organization. Missed payments are flagged by these systems, and you will always be notified when upcoming payments are due.
Supply Chain Management
Our industry has very complex supply chains, where many suppliers contribute to the success of each project. By using Blockchain for supply chain management, companies can reduce the data errors that often occur throughout the process, subsequently reducing miscommunication between client and stakeholder groups. With blockchain, companies have a common, trustworthy source of data to track and evaluate work, and can build better relationships with their partners.
Trust, transparency, and the technologies that enable them will be at the forefront of project delivery for the new era of the construction industry, a transformation Bespok wishes to lead. Blockchain is a great start, but just the beginning of the many changes to come.