How to empower digital transformation in construction – and what to avoid

Digital transformation is no longer a future ambition for UK construction firms. It’s a present-day necessity.

It delivers the competitive edge that provides a modicum of certainty in a challenging business environment. Even better, it can truly move the needle on growth, efficiency, and real-time responsiveness.

Done correctly, digital transformation puts the finance team at the heart of the business, where it belongs, providing previously unheard-of cost and procurement visibility that benefits every project lifetime.

In this article, we look at not just the approach but also the finance-first mindset leaders like you should be adopting for successful digital transformation within construction. We also list some practical advice to move forward.

Here’s what we cover:

Digital transformation challenges for construction firms

Digital transformation remains a huge challenge within construction businesses.

RICS’ Digitalisation in Construction Report states that the use of digital technologies within construction projects is not increasing, as we might expect.

Those respondents not using any digital tech in their projects was 40% in 2021. And rose to 43% in 2023.

Just 25% said they use digital tools across some of their construction projects, while 20% reported using them for most projects.

This is certainly surprising considering mandatory implementation of Building Information Modelling (BIM) Level 2 for government construction, which surely shows an official desire for best practices, and even a legislative direction of travel.

Nonetheless, there is a realisation that digitalising projects brings benefits to key business functions, according to 53% of respondents in RICS’ report.

Without digital transformation, these common failure patterns are familiar whenever a construction project is reviewed:

• No single version of cost and commitment between estimating, procurement, site operations and finance.
• Late and manual reporting for work in progress, committed vs actuals, or cost-to-complete.
• Procure-to-pay lacks purchase order (PO) discipline, and features weak 3-way match, plus late accruals.

Decisions are reactive, rather than proactive. Forecasts are stale moments after they’re shared. Costs are hidden until accounts payable (AP) post invoices. Roll-ups and benchmarking are unreliable.

There can be an overreliance on spreadsheets, which further decouple core ledger management and procurement.

Ultimately, digital transformation must be about ensuring that financial data is accessible in real time. And that means the finance team must be at the heart of it.

Who should take responsibility for digital transformation?

When it comes to technology, surely it’s the IT department that should lead the transformation? After all, they have the technical know-how.

Unfortunately, such an approach is anachronistic.

While any IT dept is certainly central to the project, such an approach ultimately creates an IT project and not what’s required: a strategy to drive the business forward.

For example, the IT dept is likely to choose individual departmental systems based a feature matrix aligned largely if not exclusively with individual department needs.

This seems reasonable, until real-life experience reveals how it leads to silos. Departments might be digitally transformed to their satisfaction, but the business as whole is not.

A construction business is among one of the most complex, with many moving parts that need to interoperate. Digital transformation must unite these.

Furthermore, a mix of vendors across department digitalisation efforts can mean the siloed departments and systems can’t communicate easily, if at all. Humans are forced to take up the slack, via manual periodic reporting.

If nothing else, any hope of responsive decision-making is obliterated if, each time, a request has to be made for the vital data, and then days or weeks are spent waiting for the report to be generated and signed off.

Financials and creating a single source of truth

All roads lead to Rome and, in a modern thriving business, all business operations and decisions lead to the finance department.

Because of this, it’s the CFOs, finance directors, and operational leaders in UK construction firms that are best placed to drive true, strategic digital transformation.

Only finance leaders can ever provide a responsive single source of truth across the entire organisation detailing costs, commitments, and cash flow. Only finance teams can provide the real-time visibility, alongside fully rounded knowledge of issues such as compliance, such as the Construction Industry Scheme.

This provides incredible agility for not just ongoing projects but also planning.

Furthermore, the finance department has the oversight to ensure digital transformation is driven by strategy, because that’s a world they align to. Thus, this brings with it the ability to scale confidently and manage risk proactively.

Even better, it ensures the finance team is at the heart of the organisation.

What digital transformation looks like

Here’s what you should expect from any digital transformation:

• Single source of financial truth: Project‑level profit and loss (P&L), work in progress (WIP), and cash visibility by cost code.
• Live committed cost tracking: POs, subcontracts, and variations captured before spend happens.
• Closed-loop procure-to-pay: Requisition, to PO/commitment, to goods/services receipt/valuation, to 3way match, to pay run—all visible to finance.
• Operationally native job costing: Forecasts, Estimate at Completion (EAC), and cost‑to‑complete are updated from the field and surfaced instantly to finance.
• Controls and auditability: Approval tiers, segregation of duties, vendor and subcontractor compliance (CIS, insurance, safety), and retention handling.
• Construction-specific compliance: Applications for payment, retentions, CIS deductions, and domestic reverse charge VAT handled as standard.

5 steps to kickstart your transformation

Here’s how you can begin.

1. Choose construction-specific finance platforms

Generic accounting tools can’t handle complexities like CIS, retentions, or applications for payment.

Choose cloud accounting software built for construction that supports job costing, WIP, and procurement workflows. Look for real-time dashboards, API integrations, and compliance automation to ensure finance becomes the control tower for your projects.

Ensure there’s expandability to add-in vital functionality from third parties.

2. Audit current processes and start with finance

Map your existing workflows—procurement, job costing, WIP reporting—and identify gaps in visibility or control. Prioritise finance as the foundation: standardise cost codes, enforce PO-before-pay, and automate revenue recognition.

This ensures transformation delivers measurable financial outcomes rather than becoming a disconnected IT exercise.

3. Set goals around accurate EAC and WIP reporting

Define clear key performance indicators (KPIs) such as weekly Estimate at Completion (EAC) accuracy, WIP variance tolerance, and margin-at-completion visibility.

Align these goals with board reporting requirements and project-level dashboards.

Automate calculations where possible to reduce manual errors and ensure decisions are based on live, reliable data rather than several month-end spreadsheets.

4. Ensure integration with site tools and document management

Disconnected systems create blind spots. Ensure your finance platform can be extended for estimating, field progress, and document control tools.

This ensures that purchase orders, valuations, and progress updates flow seamlessly into job costing and WIP reports, giving finance and operations a single version of the truth.

5. Train teams and enforce policies in-system, not just on paper

Policies such as PO-before-pay or approval thresholds only work if embedded in workflows.

Configure system-based approvals, alerts, and compliance checks.

Deliver role-specific training for finance, commercial, and site teams, supported by quick-reference guides.

Reinforce adoption with dashboards that make compliance visible and measurable.

Final thoughts

Finance-first transformation creates sustainable success and means any digitalisation project within construction is more likely to complete.

No business has ever suffered after putting the finance department at the heart of the operations, and construction inherently demands such an approach if costs are to be controlled, insights to be gained, and the whole organisation made responsive.