You’re a construction company ready to modernize your operations with cutting-edge technology. You’ve found the perfect platform that promises to solve multiple pain points across your business. There’s just one problem – the pricing model feels like you’re buying a Ferrari when all you need is a reliable truck for specific jobs.

This scenario plays out daily across construction companies of all sizes, and it’s creating what industry insiders are calling the “ConTech pricing predicament.” Having recently spoken with Patrick Hennessy, Planning and Analytics Executive at Harkins Builders, it’s clear that how we price construction technology is becoming as important as what the technology actually does.

 

In this episode, Patrick Hennessy from Harkins Builders shares why traditional project management tools are failing the construction industry, how AI could revolutionize daily site operations, and the brutal truth about construction tech pricing.

 

The Evolution from Desktop to Revenue-Based Models

The construction technology pricing landscape has undergone a dramatic transformation over the past decade. Traditional scheduling software like Primavera P6 operated on a simple premise: buy a desktop license, install the software, and use it indefinitely. It was straightforward, predictable, and tied costs directly to usage.

“The older scheduling tools are like buy a license to the software, use the software,” Hennessy explains. But as construction technology has moved to the cloud and platforms have become more sophisticated, pricing models have evolved too – not always in ways that contractors find intuitive.

Today’s construction technology pricing models largely revolve around revenue-based structures. Whether you’re looking at scheduling software, pre-construction platforms, or compliance tools, the pricing conversation typically starts with: “What was your revenue last year?” From there, pricing tiers are established based on the volume of business flowing through the platform.


The Revenue-Based Reality Check

At first glance, revenue-based pricing seems logical. It scales with business growth, ensuring that larger companies with more complex needs pay proportionally more than smaller firms. For software providers, it creates predictable revenue streams and aligns their success with their clients’ growth.

But here’s where things get complicated for contractors. Hennessy points out a fundamental flaw in this approach: “Are we really getting a hundred or 600 or a billion dollars worth of revenue, quote unquote, use out of this software? Is every project that makes up that billion in revenue using the software to its fullest extent?”

The answer, more often than not, is no. Construction companies find themselves paying for platform capabilities they’re not using, creating a disconnect between value delivered and price paid. It’s like being charged for a full gym membership when you only use the treadmill.


The Platform Paradox

Modern construction technology companies are building comprehensive platforms that address multiple business functions. A single solution might handle scheduling, quality control, document management, and analytics all under one roof. For software companies, this makes perfect business sense – higher customer lifetime value, reduced churn, and multiple upselling opportunities.

For contractors, however, comprehensive platforms create implementation challenges that go beyond pricing. “Throwing a platform on somebody whose job might have 20 different components is a really, really tough ask for a construction company,” Hennessy notes.

The reality is that most construction companies want to solve one specific problem first, test the solution, and then gradually expand usage. But platform pricing often requires buying the entire suite upfront, creating a barrier to entry that can delay or prevent adoption altogether.

 


The Modular Appeal

This is where modular pricing becomes attractive. Instead of forcing companies to buy comprehensive platforms, what if construction technology providers offered flexibility to start with specific modules and expand over time?

Hennessy describes a recent interaction with a compliance software company that exemplifies this approach: “They have been super willing to work with us. And it’s like, I think we’re gonna start with this one. It’s like, all right, we’ll turn off the other pieces and we’ll start you there and this will be the price. Then when you bring this one in, we’ll go to this one.”

This modular approach addresses several contractor pain points simultaneously:

  • Lower barriers to entry: Companies can start with smaller investments
  • Reduced implementation complexity: Teams can master one function before adding others
  • Better value alignment: Payment matches actual usage and value received
  • Easier internal selling: It’s simpler to justify budget for specific, well-defined problems


The Consumption Model Alternative

While discussing pricing alternatives, the conversation inevitably turns to consumption-based models – think of how cloud computing services charge based on actual usage rather than flat rates. “For our data warehouse, we pay based off of the amounts of data we put in there, amount of queries we do and the amount of things and transformations,” Hennessy explains. “There’s no arguing that right like it’s really fair we’ve used it we’ve consumed it we pay for it.”

But applying consumption-based pricing to construction technology isn’t straightforward. What constitutes “consumption” in scheduling software? Number of activities? Projects managed? Updates processed? The human element of construction work makes it challenging to define clean consumption metrics.


The ROI Challenge

Underlying all pricing discussions is a fundamental challenge: quantifying the return on investment from construction technology. Unlike other industries where software ROI might be measured in increased sales or reduced operational costs, construction technology benefits are often indirect and difficult to measure precisely.

“How do you truly, truly, truly quantify a dollar amount of savings that like a software is going to save you in terms of a business process that becomes more efficient?” Hennessy asks. This measurement challenge makes it harder for contractors to justify higher software costs and creates tension in vendor relationships when renewal time arrives.


Finding the Sweet Spot

The ideal construction technology pricing model likely combines elements from different approaches:

  • Modular flexibility: Allow companies to start with specific functions and expand over time
  • Scalable pricing: Costs should grow with usage and value, but not necessarily with total company revenue
  • Transparent consumption: Clear metrics that tie pricing to actual usage where possible
  • Value demonstration: Built-in tools to help contractors measure and communicate ROI


Looking Forward

As the construction technology market matures, pricing models will likely continue evolving. The companies that figure out how to balance growth requirements with contractor realities will have a significant competitive advantage.

The goal isn’t necessarily to make software cheaper – it’s to make pricing feel fair, transparent, and aligned with the value delivered. When contractors feel they’re paying for what they use and getting clear value from their investment, everyone wins.