Initially, the idea of blockchain technology was for the virtual money transaction of cryptocurrencies, such as bitcoin and Ethereum. However, the system is highly transparent and setting high accountability in the process made it gets adopted by other sectors too. With no mid-party involved or glitch in the process, a blockchain is 100% decentralized. This feature of blockchain makes it have an added advantage over other virtual money options and practically impossible to breach.
The construction industry is the major driving force of the economy is fragmented and challenged to improve in terms of productivity, efficiency, and embrace and adopt the new technology.
What is Blockchain technology?
The blockchain is decentralized information, such as transactions and agreements, distributed across various networks of the computer. The information can be viewed and accessed by the community of users and not have any central manager or central authority, such as the bank or government.
Construction Industry and Blockchain technology
The construction industry is widespread and involves dynamic grouping of many companies. A centralized and confidential system is hence needed to store all the information. Blockchain being a mode of financial transactions is a potential for the construction industry. Blockchain if implemented properly with the construction industry can aid project management and supply chain management. With the software already working in the same direction, that is to upgrade and transform the construction industry with blockchain implementation, the idea is to revolutionize the entire construction industry towards better adaptability of the blockchain. The construction management software is believed to ease the construction business but is limited to keeping records and tracks of the data and keeping the overall process smooth. However, with the implementation of the blockchain technology, the construction industry will not be able to smooth out the whole process but also will be able to sort the financial aspect. The construction industry majorly deals in the contracts of long tenure. With the contracts being finalized on the blockchain platform, it could be a major boon to the construction industry in the years to come. This would also overcome the limitation and challenges of construction management software. With blockchain being implemented the project data and the output can be recorded and processed more efficiently. The real-time data can be tracked through this which also can update about the cost of the project completed at a different time. This can ease the payment release and there won’t be any middleman or third person required to update the data. Hence blockchain can also be considered as an upgrade of the construction software.
Blockchain besides its listed factors also helps streamline the procurement process. This helps reduce the level of fragmentation and complexity of the projects. The streamlining and monitoring of the process at every step would not only help in the efficient use of the resources but also would deliver quality products and services with higher accountability. Blockchain technology could also help in demand forecasting and drive more accountability.
Blockchain Revolutionizing the Construction Industry
With above-mentioned benefits of the blockchain implementation in the construction industry, it is believed that full-fledged implementation will not only be beneficial and effective but will also be a revolution to this major industry. This upgradation is a mix of digital revolution and business change. However, the change is for good. Blockchain technology has the potential to overcome many challenges of the construction industry, such as the real-time update, payment related issues, timely completion of the project, etc. It will also help to shift the current payment issues towards transparent and fair payment practice. By reducing delayed payments and disputes over finances, small and medium ERP would be benefited and can avoid continuous cash flow risk. The industry can be made more trustworthy, as a whole. By using smart contracts for the work to be done, business process and administrative tasks can be automated to increase efficiency and implemented on the contractual terms. This process would result in more cost savings, the increment in the low margins of the industry as a whole and better control over project costs.
With all the mentioned benefits and blockchain being one revolutionizing factor in the construction industry, it is highly preferable and advisable to upgrade the present construction management software to blockchain technology. The blockchain not only tracks and monitors the ongoing process but also takes care of the project management as a whole, payment management with on time and transparent process being followed, better supervision of procurement and supply chain management, smart asset management and challenges ahead for implementation with better forecasts. The time is right for the construction industry to break free of the barriers of a physical system or software and upgrade to better technology with blockchain implementation and improve day-to-day work efficiency with simultaneous increase in the transparency of the process.
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