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Contractors see more options with cloud outsourcing

11/4/2016 at 2:46 pm by

For years, smaller construction companies have not had the luxury of IT staff. In fact, I know a lot of CFOs who’ve doubled as the tech experts in their companies, recruiting anyone in the organization who had some sense of computers to help out. So when cloud computing started to offer another alternative—a way to outsource IT functions and infrastructure—construction companies took notice.

Over the past few years, IT outsourcing has especially become prevalent among smaller construction firms. More than three out of four construction firms under $50 million in revenue outsource their information technology, according to the 2016 Construction Hiring and Business Outlook conducted by the AGC in collaboration with Sage.

In 2017, hosted cloud services will continue to grow in popularity among contractors who want to outsource their IT operations and infrastructure. Even larger construction companies are seeing value in putting some parts of their IT infrastructure in the cloud and will continue to do so.

This growth trend is being spurred by many factors. For one, servers and equipment are continuing to age, creating a decision point for contractors to determine if it’s more cost effective to buy new equipment or use an Infrastructure as a Service (IaaS) cloud service. Backup and disaster recovery are also major incentives for contractors to use an outside cloud service to protect their data. And, of course, cost reduction is always an underlying motivation to move to the cloud.

Another key factor—and perhaps the biggest change I’m seeing—is contractors are now more comfortable with using cloud computing services for hosting accounting and other proprietary software.

Why the change in comfort level?  In my opinion, it primarily boils down to the need for information access. Data is the fuel that drives decision-making both on and off the construction job site. Consequently, contractors can no longer afford to have data that is available to only a few people. Secure, hosted cloud environments make it possible for many more authorized individuals to quickly, easily, and cost-effectively get to the information they need to do their jobs.

How you use a cloud service provider for outsourcing depends entirely on your individual business needs. You can, for example:

  • Store your data offsite. According to the U.S. Small Business Administration, 40 to 60 percent of businesses never reopen their doors after a disaster. Much of that has to do with losing their data. Cloud service providers offer an option to store your data and backups at separate locations in case disaster impacts your business
  • Host applications, or even your entire desktop. Many contractors have been using cloud service providers to handle installation and updates of their applications and desktop systems. Not only does it take the IT burden off of non-IT staff, it’s often a more scalable and cost-effective way to run your programs and systems.
  • Make applications or the desktop available through a web browser. Once an application or desktop is put in the cloud you can make it available to whoever needs it through a web browser. This is especially useful if you want to provide mobile access to information and capabilities.

Cloud computing has and will continue to reshape the way construction companies manage their businesses. In 2017, we are sure to see more options for contractors who want to outsource their IT services in the cloud.

About the Author

Dennis Stejskal has over 30 years of experience developing, supporting and selling software and technology to construction and real estate companies. His comprehensive product knowledge and understanding of customer and market needs propelled him into his current role as Vice President of strategy and customer success for Sage Construction and Real Estate. Dennis has been a member and co-chair on the CFMA Technology Committee and often speaks at industry events, including CFMA, AGC and NAHB meetings and conferences.

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