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Predictive Modeling, Big Data and Construction

Monday, January 20, 2020

As a Risk Manager, I’m quite familiar with the phrases “Predictive Analytics and Predictive Modeling ” as insurance carriers use this process to determine the markets they will enter (or leave), the rates they set, and even the customers they will or will not work with. 

They take past trends and data to predict future trends.  Are they always right – of course not, because we live in a world of risk that includes natural disasters and what we call “shock claims” – claims that may be freak accidents or one-off events that no one could predict.

The construction industry, much like marketing and advertising, has seen a huge shift over the past 40 years moving from a very human, hands-on approach to a very high-tech data-driven one.  Let’s start with advertising because we’ve all experienced the big data phenomenon.  You’ve “Googled” an item you are thinking of purchasing or you looked up a topic that sparked your interest.  A few minutes later you log into your Facebook account and you see an ad for the exact item or subject you were searching on.  Big Data at its finest.  Marketers are masters at capturing tons of data, digesting it, and then using it to persuade potential buyers to take out their credit cards and purchase.

Let’s take that same concept and use it in construction.  What top firms are doing is quite the same – they are gathering as much data as possible from bids they put out, supply chain demand, workflows, employees, vendors, build sites, and safety red flags.


50+ years ago, we didn’t have the power of Big Data to drive many of our decisions.  When we consider new construction, before ground is broken, there are billions of data points that go into where that building should even be.  From traffic patterns to accessibility issues, to even employee lifestyle factors – all of this PAST data is used to predictively model where the right place to build is and what the design of that building should be.  All the data and modeling reduce the possibility of mistakes and pitfalls – it will never eliminate just as our insurance analogy noted above, but it gives the construction firm a much better picture of what the future may hold.


Gone are the days of yellow legal pads tossed on the passenger’s seat of the Forman’s truck – today it’s all about real-time data, mobile applications, AI, and drones.  Construction is all about reducing risk and increasing profits – each data point gathered on the job site gives the leadership/management an increased advantage using predictive analysis. 

The simple use of mobile applications to update foremen on job status, sub-contractor performance, and supply chain disruption in real-time saves hours and dollars that in the past were lost.  Identifying and tracking injury trends allows safety programs and processes to be proactively put in place resulting in fewer injuries and work comp claims. 


Having top-notch field management is critical to the process, but it takes more than collecting the data you have to use it.  The more data you collect, the better the predictive modeling will be.  3 years is better than 3 months – more data, more insight.

The key is to collect, analyze, then strategize in order to reduce risk and increase profits and performance. 

The tools we use to gather data will only get better and faster – the process remains the same.  Firms that embrace big data and innovation will far outperform those who don’t.


Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.