Digital Transformation in Construction

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The digital revolution is transforming the way organizations work, engage with their customers and generate revenue.

It doesn’t matter if you’re in the construction, retail or healthcare sector, every industry is being impacted by the proliferation of devices, hyperconnectivity and emerging innovations like artificial intelligence (AI) and the Internet of Things (IoT). This new and unchartered territory is all anyone can talk about. Why? Because it raises a number of questions business leaders haven’t had to answer before. For example:

  • How do we explain to the C-Level executive why this is important and illustrate the real business benefits?
  • Are large organizations at an advantage as because they have more money to invest in new technology?
  • How do we know we’re investing in the right tools?

The recent IFS Digital Change Survey makes some interesting observations about the maturity of digital transformation across industries globally. Interestingly, big data, enterprise resource planning (ERP) and IoT are some of the top investment areas for digital transformation, but one in three companies are unprepared due to a limited talent pool. A reality every sector is facing, especially construction.

As a technology provider to the construction industry, here are a few considerations for how digital transformation is impacting the sector:

What is digital transformation?

Digital transformation is the idea of using modern technology to improve any business model or process – a concept that isn’t necessarily new. For example, building information modeling (BIM) is seen to be at the heart of the digital transformation journey in this industry but, so far, the industry is still struggling to see tangible benefits. The lack of adoption is largely down to the limited understanding of what it means. The term itself suggests that it has to do with modeling buildings, so it’s often mistaken as a fancy engineering tool for the PhDs in engineering. Hence why the executives of most contractors struggle to understand what it means to their business and how it can help drive revenue.

Let me give you my definition: BIM is a concept that relates to all assets, not just buildings.

BIM is NOT just about using a 3D modeling product. BIM is really an integrated process to manage information across all stages of an asset’s life. It involves the integration of processes, information and technologies. It is about changing the way we do business and implementing a process for continuous improvement. This business change must start with a more integrated systems approach to managing all stages of the assets life. We need to move from a document-driven process to an integrated data-driven approach.

Digital transformation is much broader than BIM. Organizations can implement a digital transformation strategy without investing in BIM design tools at all.

This can include implementing new technology and processes to improve your business such as: laser scanning, 3D printing, drones, 4D construction scheduling, intelligent workforce scheduling, virtual and augmented reality, mobile technology, IoT, robotics, predictive analytics-based maintenance, offsite and modular construction, lean construction and work face planning, just to name few.

It’s encouraging to see many organizations play with new technology, but what we’re still missing is compelling, real-life examples of companies who have seen transformational results.

Islands of innovation

The issue with digital transformation being implemented as a set of discrete experimentation projects is that there is a real danger of innovation for innovation’s sake. When it should be about solving the critical business problems at hand.

The large contractors, for example, are doing a lot of technology experimentation off the back of extensive projects like Crossrail in London. But the reality is they have big enough budgets to absorb these expenses. I have no doubt that the industry will learn valuable lessons from these innovation initiatives but there seems to be a lack of joined-up thinking. Crossrail is promoted as a best-in-class example of how to implement BIM, but it is far from perfect. It appears that Crossrail is made up of lots of different projects, involving hundreds of contractors and thousands of different business systems with discrete innovation projects happening in tandem. This is perhaps not surprising given the size and diversity of the Crossrail development. Even if we look at one of its projects, the idea of a seamless flow of digital data moving from design to construction to maintenance does not seem to exist.

So, unfortunately, we still have a long way to go to get to an efficient integrated digital set of data and processes. Perhaps that’s down to the huge number of MS Excel spreadsheets still being used throughout the industry – a reality many aren’t all willing to admit.

The IFS Digital Change Survey mentioned earlier concludes that the main business drivers of digital transformation are:

  • Internal process efficiencies and productivity gains
  • Improved reporting and decision making
  • Growth opportunities in new markets

The construction section of the report highlights what most of us already know: the industry needs to increase its investment in new technology. However, it suggests that what’s holding the tier 2 and 3 contractors back is potentially the lack of deep pockets. Yes, the large construction firms are investing more in new technology but it’s questionable as to whether they are implementing solutions that will help them realize the goals above or if it’s just playtime with the latest gadgets? Whatever the drivers are, the conversation cannot happen in silo by the C-level executive team. BIM or digital transformation has to be a discussion that includes or is even led by the engineering or technical people in an organization.

Interestingly, critical business systems such as ERP, enterprise asset management (EAM), program management etc. are widely used in the construction industry, yet they’re rarely mentioned in digital transformation discussions. Surprising given the three goals outlined above have the greatest chance of success if an integrated set of business systems and processes are deployed. Having a rich and robust data set at the heart of a business or project puts any organization in a position to exploit the benefits new technologies such as BIM, mobility, drones etc. can bring and provide game-changing ways of working.

Whether it’s a 500-person firm or a family-run contractor, the foundations of most companies are not built on the most modern set of business systems. Ironic, given no contractor would attempt to build a new asset without proper foundations. The patchwork quilt of non-integrated business systems and thousands of spreadsheets has unfortunately been ingrained in the foundations of this industry, which are clearly hard to break.

However, if the goal of a digital transformation project is to improve the following three areas, then it’s time to rethink the approach, prioritize integration and build a digital strategy that’s focused on problem-solving and efficiency. It’s the only foundation that will be able to withstand the ever-evolving digital era.

  1. Internal process efficiencies and productivity gains
  2. Improved reporting and decision making
  3. Growth opportunities in new markets

Do you have questions or comments about digital transformation in construction?

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2 Responses to “Is the construction industry investing enough in technology?”

  1. Brian

    Like you say, difference in pocket size is a key contributor but I’ve spoken to few people (who obviously don;t represent the entire industry) who simply don’t seem to realise the value of evolving tech – I believe one of them said something along the lines “we don’t use computers and stuff”. With that said, it isn’t too surprising, to me at least, that the big dogs with an eye on profitability and the bigger picture are more inclined to be receptive of software and tech than those with, let’s say less savvy and more hammering ideas.

    Reply
  2. Allan

    I don’t think so all the construction industries investing enough in technology. Because some of the industries are not aware about new tech ideas. But they should keep in touch with technology to take their companies to the next level.

    Reply

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