Uncovering the industry’s hidden margin killers
As activity ramps up across the construction and civil engineering sectors, the risks quietly eroding profitability remain stubbornly familiar. Waste and material substitutions, often overlooked in the rush to deliver, continue to put margins, compliance, and quality at risk. Brittany Harris, CEO and Co-Founder of Qflow, explains why tackling these issues with robust data strategies is more critical now than ever.
Persistent challenges in a changing market
With construction output on the rise and industry confidence gradually recovering, the demand to do more with less has never been greater: less carbon, less waste, and less tolerance for inefficiencies. Yet, two persistent challenges continue to undermine progress: waste and material substitutions. These issues are no longer simply environmental or compliance concerns. They present direct commercial risks that can threaten the viability of even the most rigorously managed projects.
Poor data: the root of costly waste
Despite years of investment in digital tools, fragmented and unreliable data remains a significant obstacle to operational efficiency. As a result, project teams continue to make decisions based on incomplete or inconsistent information, which is leading to widespread inefficiencies from design right through to delivery.
Industry reports highlight the scale of the issue, the State of Data Quality in Construction report, identifies an average loss of £2 million per UK project through rework, delivery errors, and procurement inefficiencies, all linked to poor data management. This demonstrates that poor data is not a theoretical or back-office issue; it impacts every stage of how buildings and infrastructure are designed, priced, and built.
Waste, in particular, represents both an environmental burden and a financial drain. Construction contributes over two billion tonnes of waste globally each year. In the UK alone, the sector accounts for 61 per cent of total waste generation, equivalent to around 100 million tonnes annually. But beyond the obvious environmental impacts, this waste translates directly into lost materials, additional storage and handling costs, disposal fees, and the administrative burden of compliance.
Material substitution: an escalating risk
Waste isn’t the only margin killer linked to poor data and weak processes. Material substitutions are becoming more frequent, driven by supply chain disruptions, price volatility, and changing regulations. While many substitutions are well-intentioned, they’re rarely risk-free.
As Cheri Haynes of the International Risk Management Institute put it: “You can put your boots in the oven, but that don’t make ‘em biscuits.” Not all materials are created equal, and swapping one for another under pressure often leads to unintended and costly consequences.
Improperly managed substitutions can introduce compliance failures, safety risks, certification issues, budget overruns, and rework. These risks are exacerbated by today’s volatile market conditions, where global events, from inflation to geopolitical tensions, can rapidly impact material availability. When decisions are rushed, the chance of hidden risks only increases.
New regulations such as Gateway 2 further tighten expectations. Designs must match delivery precisely, or face significant penalties in the form of rework, delays, and compliance breaches. Mistakes made post-Gateway 2 can derail programmes, inflate costs, and push already tight margins over the edge.
Data as core project infrastructure
With regulation and scrutiny increasing, accurate and timely data is no longer a ‘nice to have’, it’s fundamental to managing live compliance risk across the project lifecycle.
Technology that captures and verifies data from the ground up empowers project teams to ensure that specifications, especially those relating to quality and compliance, are consistently delivered on-site. This assurance prevents costly surprises and ensures that the built asset matches the original design intent.
Treating data as part of the project’s core infrastructure, on equal footing with materials, labour, and plant, enables better, faster decisions on substitutions, mitigates risk, and drives improvements in both sustainability and commercial performance. It reconnects design to delivery, unlocking a cycle of validation and continuous improvement.
Real-world examples demonstrate the benefits. On a £350 million highways project in Oxfordshire, Skanska implemented digital waste tracking that improved data capture by over 70 per cent, generating £295,000 in added annual value through reduced compliance risks and administrative efficiencies. These gains weren’t driven by major investments, but by eliminating inefficiencies through smarter processes and better data.
Building resilience for the future
As the sector regains momentum, the opportunity to reset expectations and embed better practices is clear. Robust data strategies must become standard in how we design, procure, and deliver. The technology exists, and the business case is undeniable.
By harnessing accurate, real-time data and applying lessons from best practice, construction and civil engineering firms can not only mitigate the risks of waste and material substitution but also unlock opportunities for operational excellence, improved resilience, and enhanced profitability.
The future of this industry won’t be shaped by bold claims, but by traceable performance and a commitment to ensuring every decision adds value – rather than risk.
Brittany Harris is Co-Founder and CEO of Qflow. Qflow has a vision of a construction industry that uses only the resources it needs in the most efficient way possible – delivering a built environment that meets the needs of society without compromising future generations. With that, the company aims to be the simplest and quickest route to decarbonise construction through data driven insights and leadership across the UK, US and Australia.