How Construction Firm Size and Digital Maturity Impact Software Adoption
Understanding the structural factors influencing tech implementation
This article is written by Erin Khan. She is an established AEC technology leader who provides technology and innovation services to both contractors and construction technology startups at her consultancy, Erin Khan Consulting. Prior to founding EKC in 2023, Erin served as the National Director of Construction Solutions for Suffolk Construction.
One of the challenges with innovation and technology adoption in construction is the industry’s fragmentation.
According to the U.S. Bureau of Labor Statistics, 99.94% of construction companies are classified as small businesses (having fewer than 500 employees) and 68.19% have fewer than five employees. While there is no direct data on how the workforce is distributed across firm sizes, the vast majority of construction professionals likely sit within the ‘long tail of construction.’
This dynamic makes diffusing new innovations and adopting new processes challenging. Each firm has a different level of capability and speed when it comes to absorbing and scaling new technologies.
To help make sense of this, I’ve developed a ‘Technology Adoption Matrix’ which maps companies based on their size and technology mindset to identify their ability and speed of adoption.
This framework can be used by:
Industry Executives
To understand internal culture and realistically assess how quickly technology can scale across teams.Construction Professionals
To identify the innovation appetite of prospective employers and the pace of change they can expect.Startup Founders
To qualify target customers, tailor messaging, and assess which firms are likely to pilot or adopt new solutions.
In this article, I’ll be sharing the matrix, how this affects the innovation cycle at companies and how to identify where a company sits including the opportunities and weaknesses that come with each profile.
Contents
Technology Adoption Matrix
Capability
Speed
Innovation Cycle
Types of Firms:
Innovation Sprinters
Trailblazers
Laggards
Followers
Qualifying a construction firm’s position
Technology Adoption Matrix
The below matrix plots construction firms along 2 axes; Technology Mindset and Company Size.
By mapping firms on these axes, we can better understand two core traits that influence tech adoption:
Capability
A firm’s internal capacity to successfully implement and sustain new technology.Speed
How quickly a firm can test, evaluate, and make decisions about new technology.
Both capability and speed have further nuances.
Capability
A firm’s size often shapes its capability to scale technology. Larger firms tend to have more structure, resourcing, and institutional maturity, which leads to higher capability.
Key drivers of capability include:
Budget for technology investment (tools, training and support)
In-house talent available (IT, innovation team)
Project systems maturity (standardized workflows, documentation, data readiness)
Organizational bandwidth to trial and integrate new tools without disrupting operations
In contrast, smaller firms often operate with generalist roles and limited cash flow, which constrains their ability to deeply integrate and roll out new tools.
Speed
A company’s technology mindset (embracing or wary) shapes how quickly it moves from interest to action. This is further influenced by company size, with smaller firms typically able to move faster due to fewer layers and simpler decision-making.
Key factors influencing speed include:
Cultural openness to change
Leadership mindset (risk-taking vs. risk-averse)
Procurement complexity (simple vs. bureaucratic)
Innovation pathways, such as dedicated piloting frameworks that streamline testing and internal buy-in
Firms that embrace technology often have structured processes to evaluate, pilot, and scale new tools, giving employees a clear path to act on ideas and reinforcing a culture of innovation.
Understanding both the capability and speed of an organization is important as it helps us to identify the length of their innovation cycle.
Innovation Cycle
The innovation cycle for the purposes of this article is the time it takes to move from an existing standard to a new standard or way of working.
It starts when a team recognizes that something isn’t working well or sees an opportunity to do it better. This leads to a problem statement and exploring and discovering new processes or solutions, piloting them on a couple of projects and, if successful, enterprise wide rollout until the innovation is embedded in day to day operations becoming the new normal or standard operating practice (SOP).
An example is the use and adoption of 360° cameras for site documentation.
A few years ago firms began to experiment with using these for site documentation. After successful pilot projects they began to expand to enterprise wide rollouts. Eventually they became ubiquitous and part of every new project’s SOPs.
The time taken from the experimentation or problem identification to SOP is the length of the innovation cycle.
A firm’s size and technology mindset directly influence the speed of its innovation cycle. Using our construction firm personas, Innovation Sprinters have the fastest cycle, followed by Trailblazers, then Followers, while Laggards often don’t initiate an innovation cycle at all.
Let’s look into each one in more detail as well as their strengths and opportunities for improvement.
Innovation Sprinters
These construction firms combine low capability and high speed resulting in extremely short innovation cycles which may be the length of a pilot project or shorter if there is a positive experience.
This speed is largely driven by direct involvement from key stakeholders, such as the president or owner, who can make quick decisions and greenlight company-wide implementation without layers of approval.
However, these firms are constrained by their limited scale with smaller budgets, lean teams, and often no dedicated innovation staff. It means any new solution must be easy to implement with minimal training or troubleshooting, as no one has the time to manage complexity.
As a result, they fail fast and learn fast.
Startups working with this segment may experience shorter sales cycles, but will often need to provide more hands-on customer success support to ensure successful implementation.
Opportunities for improvement
For firms in this category, the enthusiasm for innovation can lead to tool overload or hasty decisions. To avoid this, it’s worth investing in a dedicated IT or technology lead with a clear innovation mandate who can apply a strategic lens to new solutions, ensuring better alignment with company goals.
By bringing structure to the piloting process, rather than relying solely on a busy owner or executive, allows the business to evaluate tools more thoroughly and scale the right ones more effectively.
Trailblazers
These firms have high capability but medium speed due to their size and layers of bureaucracy. As a result, their innovation cycles are neither rapid nor slow moving at a deliberate, strategic pace, especially when evaluating procurement decisions.
A characteristic is their defined innovation pathway which provides a formal process for solution identification, piloting and enterprise wide rollout. This structure supports innovation but also construction speed as adoption can only move as fast as the process allows.
These firms often foster a strong culture of innovation, with employees eager to try new tools. This leads to pockets of decentralized experimentation or ‘surprise pilots’ where teams bypass formal pathways to explore tools that solve immediate problems. While this can drive creativity, it also risks fragmentation and misalignment with strategic priorities.
Opportunities for improvement
A common challenge is technology fatigue. Given their size, Trailblazers may be locked into processes that once worked well, but now feel slow or overly rigid. At the same time, decentralized activity creates tension between control and creativity.
These firms have an opportunity to embrace structured flexibility by creating light-touch frameworks that encourage bottom-up experimentation while offering centralized support and scaling resources. Rather than suppressing ‘innovation chaos,’ they can harness it, turning informal pilots into validated, scalable tools that align with company-wide goals.
Followers
These construction firms tend to be tech shy, having low speed yet high capability. They have strong internal processes and understanding of their delivery capabilities but a reluctance to introduce change. They’ll tend to wait until they are forced off legacy solutions before considering new solutions.
For example, a firm using a 1990s ERP system may not begin exploring alternatives until the software is officially sunset or support is withdrawn. Only then does the innovation cycle begin, usually by looking at what peers have already adopted and proven effective.
This slow, conservative approach is a form of risk mitigation reducing their exposure by adopting only when solutions are validated in the market. But this mindset can create a blanket resistance to startups, as unproven tools are often ruled out before being considered.
Opportunities for improvement
Followers can evolve into Fast Followers by taking a more strategic approach. With the right mindset, they can leverage their resources to align on high-value areas and invest more confidently without being first movers.
Trailblazers are already testing and learning at speed. Followers should monitor what’s gaining traction, then capitalize on these insights to shorten their own innovation cycles while maintaining low risk.
For startups targeting this segment, success depends on solving a clear and painful problem. Adoption improves when supported by social proof, peer case studies, and a clear ROI framing their solution as a necessity rather than a nice-to-have.
Laggards
Laggards share many of the same characteristics as Followers, but with lower capability due to their smaller size and more limited resources.
These firms tend to adopt technology only when forced, resulting in very long or non-existent innovation cycles. They often lack dedicated innovation roles, structured processes, or a culture that embraces change making it difficult for new tools to gain traction.
Opportunities for improvement
Laggards have smaller backlogs and scale when compared to Followers and without proactive change they risk falling behind. Stagnation becomes a competitive risk, and doing nothing can be worse than taking a small, low-friction step forward.
They can begin by starting small with proven, low-friction technologies. For example, tools like 360° cameras are now well-established in the industry and can offer quick wins without heavy overhead helping build momentum and confidence to engage in future innovation cycles.
Qualifying a construction firm’s position
When attempting to understand where a construction firm sits on the Technology Adoption Matrix, here are some broad, conversational questions you can ask an employee to get a sense of their size and mindset.
Note: This is not a formal benchmarking tool, it’s a directional, anecdotal approach. If you’re interested in exploring a more structured framework, please reach out.
Size
How many employees does your firm have?
What’s the approximate annual revenue?
These give a quick indication of scale and resourcing.
Internal Resources
Do you have a dedicated innovation team?
Do you have a dedicated data team?
Lacking these typically indicates lower capability.
Technology Mindset
Do you have an internal innovation committee?
On your last project, did you use any tools outside your standard tech stack?
Is there a place for employees to suggest or experiment with new ideas?
How does IT respond when someone wants to trial a new tool?
Laggards: IT says no, too risky.
Tech-Embracing: IT works with you to find a solution.
Technology Outlook
How do people at your company talk about technology?
Does technology feel exciting or overwhelming to most?
Are tech tools regularly discussed during project meetings?
Based on these responses, you can begin to plot the firm’s capability (size/resources) and speed (mindset/culture) on the matrix.
Understanding how a construction firm’s size and digital maturity impact its ability to adopt new software is more than just a strategic lens. It is a practical tool for navigating innovation in a fragmented industry.
Whether you're inside a firm trying to lead change or outside selling into one, the Technology Adoption Matrix offers a way to ground your expectations, tailor your approach, and identify what success realistically looks like. Not every firm can sprint nor should they.
The goal is not to push every company to the cutting edge. It is to help them move forward in a way that aligns with their capacity, culture, and the tools that are right for them.
Progress in construction does not come from breakthroughs alone. It comes from thousands of small, strategic steps taken across the long tail of firms that make up this industry.
Erin Khan is an established AEC technology leader, with over a decade of combined experience in construction operations, data and process analysis, and software implementation. Founding Erin Khan Consulting in 2023, she currently provides technology and innovation services to both contractors and construction technology startups.
Prior to founding EKC, Erin served as the National Director of Construction Solutions for Suffolk Construction, overseeing national technology and innovation operations. Erin holds a B.S. in Civil Engineering from USC, a certificate in Business Analytics from The Wharton School, and is EIT, LEED AP BD+C, and OSHA-10 certified.