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Data Backup and Compliance for the Construction Industry

Estimated Reading Time: 4 Minutes

Businesses in the construction industry are facing increasing security and compliance risks as they continue to grow year over year.

New technologies have boosted the operations of construction companies, architecture firms, builders, and general contractors, whether in the field or within facilities. Construction firms have adopted various data hosting, sharing, and storage platforms such as Microsoft 365, Google Workspace, Hosted Exchange, and IMAP-POP.

However, this construction-related data needs an effective and secure backup and archiving process for several reasons. One is to avoid data loss that would negatively impact operations. Another is to meet necessary compliance requirements from authorities, lest they be fined for non-compliance.

Let’s delve deeper into how the construction industry benefits from backup and archiving, and how they can do it securely.

The Current State of the Construction Industry

The Associated General Contractors (AGC) of America, in partnership with Sage Construction and Real Estate, published their annual Construction Hiring and Business Outlook Report.

According to the data, contractors and construction professionals have been heavily disrupted these past few years:

  • 59% of firms report projects scheduled to start in 2020 but postponed until 2021.
  • 44% report cancelled projects that were not rescheduled.
  • More than half (55%) either do not expect to return to regular efficiency levels after six months or they are unsure of when their businesses will recover.

Their investments in technology continue:

  • 62% indicate having a formal IT plan that supports their current business objectives.
  • 53% leverage cloud-hosted technology for project management, an increase from 49% in the previous year.
  • Over 25% plan to increase document management software spending.

Challenges abound as they continue to embrace these new technologies, especially for communications:

  • 44% admit that it’s difficult to find the time to onboard and train people on new technologies.
  • 41% cite “employee resistance to technology” as the main challenge.
  • 36% point out “communication between the field and office” as another issue.
  • Meanwhile, 34% say “connectivity to remote job sites” is a top-of-mind dilemma as well.

The Data Security Risks Construction Firms Face

Construction-related data is often stored in multiple locations in the cloud. While storing in the cloud arguably increases data safety, having multiple data storage locations greatly increases the risk of losing, corrupting, or accidentally deleting data.

Construction industry data is also in danger of being exposed to ransomware, IP theft, and other cybercrimes. According to IBM’s X-Force Threat Intelligence Index 2021, there has been a 49% increase in industrial control system (ICS) attacks annually. An IBM report states the average cost of a data breach is $4.99M in the industrial sector.

The adoption of mobile technologies and apps for construction work also brought its own pros and cons. Smartphones, tablets, and other mobile devices have increased efficiencies in construction operations, allowing certain flexibilities like easy access to blueprints and plans, inventory control, and delivery tracking and monitoring.

However, these tools expand the risk surface as well. Mobile applications, when not secured properly, become gateways for bad actors and hackers to deliver ransomware, business email compromise (BEC), and supply chain attacks. This can lead to potentially catastrophic results, some of which are the following:

  • Missed deadlines
  • Faulty work
  • Breached contracts
  • Workforce injuries
  • Litigations and fines
  • Brand damage

How construction firms manage their data is a determinant of their success. A simple mouse click can forward highly sensitive company data, intellectual property, and documents. These pieces of information aren’t something any business wants falling into the wrong hands, and the same is true for the construction industry.

Addressing Compliance for the Construction Industry

Another major reason why construction industry data needs to be protected is to ensure compliance and protect the company from potentially costly liability.

Unlike other industries, construction firms need to comply with local and unique regulations depending on where the construction is happening. Zoning, noise level restrictions, workplace safety, and environmental rules dictate compliance for construction companies. Recordkeeping, data backup, and archiving are the easiest ways to ensure that every regulatory requirement is sufficiently met.

Several government laws and agencies require the conservation and retention of construction-related data for audits and compliance reviews. Some of them are as follows:

  • The Internal Revenue Service (IRS) – The United States’ tax collection agency has set up basic regulations in terms of recordkeeping for accounting and auditing purposes. Generally, tax records should be kept for at least 7 years (IRS audits often go as far back as 6 years). Firms that cannot provide accurate records and statements may find themselves subject to litigation.
  • Davis-Bacon Act – A federal law established in 1931 that requires companies and firms to pay the local prevailing wages to laborers and mechanics for public works projects. Moreover, the act also requires contractors to retain certified payroll records for 3 years, along with the supporting regular payroll records for 7 to 10 years, on federal prevailing wage projects/jobs.
  • Health and Safety at Work Act 1974 (HSWA) – A UK- and EU-based construction legislation that instructs all employers “to ensure, so far as is reasonably practicable, the health, safety and welfare at work” of their employee workforce, including any and all personnel working within their premises. Penalties for breaching this health and safety legislation are based on business turnover instead of profits, which results in fines of up to £10 million.
  • Occupational Safety and Health Administration (OSHA) – This organization requires US companies to provide confirmation of compliance with standards and regulations relative to worker and site safety, among other requirements.
  • National Association of Home Builders (NAHB) – The NAHB provides the International Code Council’s I-Codes, where most state and local regulations are based upon. The codes delineate that construction firms must maintain and grant access to inspectors and other third parties who may be required to provide inspections or reviews of work or data to confirm compliance with these codes.
  • Environmental Protection Agency (EPA) – This agency is charged with implementing regulations that protect the environment. The EPA also has its own civil construction, building and demolition guide, and proper documentation of the requirements laid out herein are significant to the success or failure of a construction project.

Dropsuite Keeps Construction-Related Data Safe

Backup and archiving is a significant component of the construction industry’s cybersecurity stance. Without it, construction companies lose the ‘safety net’ protecting them both from data loss and non-compliance penalties.

Dropsuite specializes in helping construction firms keep business-critical construction operations emails safe, secure and protected. Dropsuite uses a custom cloud-based solution to efficiently backup, store, preserve and, if necessary, easily restore data at a moment’s notice, across a range of ecosystems – Microsoft 365, Google Workspace, IMAP-POP, and Hosted Exchange.

Dropsuite’s easy-to-use, secure, and scalable backup and recovery tools not only provides business compliance; it enables business continuity. With Dropsuite, construction industry firms have the ability to set retention rates that are as long as necessary to legally maintain compliance. This also enables companies to address lawsuits and discovery processes by putting legal or time-based holds in any platform where pertinent construction-related data is stored.

Construction firms can easily set up an automated backup and/or archiving system, even with a minimal IT budget. Dropsuite provides industry-leading backup and recovery solutions for a very low cost-per-seat license, coupled with military-grade encryption that ensures data security both in transit and at rest.

To learn more about how Dropsuite secures data for the construction industry, talk to our experts here.

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