The construction industry has struggled with the consistent challenge of low productivity. Globally, the construction sector has seen annual productivity improvements of on average just 1.0 percent over the past two decades.
In comparison, the manufacturing sector averages around 3.6 percent globally. It’s clear to see the industry has been outpaced by others.
What low productivity really means to the construction industry is low output, late project delivery, reduced profits, and costly delays.
The sector is highly complex with fragmentation at its core and continual challenges around low margins, adversarial pricing models, financial fragility, and skills shortages.
Interestingly, investment in digitisation is lower in the construction industry than most other sectors globally. Culturally, the industry has been reticent to adopt digital transformation but is at a point where it needs to evolve, and this is increasingly recognised by innovative companies.
Why technology is the answer
Technology use in construction covers a range of areas such as scheduling, collaboration, project/cost controls, and benchmarking, to name a few. These provide businesses with planning tools, communication and information management solutions, and data insights, as well as greater transparency and tighter controls over a project.
Today, Software as a Service (SaaS) or cloud-based tools can enable collaboration across a project regardless of where the project team is; be it office, field, or in transit.
The creation of a common data environment (CDE) through the use of building information modelling (BIM) solutions provides the capability for all teams on a project to interact, capture, and store information in a single place while being accessible from any internet connected device.
This, in turn, provides a single version of the truth to aid transparency and manage conflict resolution.
BIM also enables an asset, i.e. a building, to be managed accurately by providing a set of interrelated and cross-referenced information. For example, objects in the model are linked to related information including manuals, specifications, commissioning data, photos, and warranty details.
Overall, whatever technology is adopted by construction businesses, it must be collaborative, easy to implement, secure, flexible, connected, and provide value. Hiring the right digital talent helps to make the most of the technology and ensures it’s used in the best way.
It then must be embraced throughout the business to really provide ROI and deliver significant change.
Barriers to change and how to move forward
There are many reasons why digital transformation has not been embraced in the construction industry including: corporate reluctance, lack of digital skills, and concerns over storing data in the cloud.
The challenges facing the construction industry are formed by many layers:
- To adopt modern technology requires skill sets within the industry at all levels to identify how to get the most out of what the technology can offer.
- To procure the technology in the first place requires C-level sponsorship. This means changing the mindset of the industry stalwarts in senior roles.
- To justify the expense of the technology, there must be data points to demonstrate the ROI and value it can provide, i.e. benchmarks.
- If and when the technology is adopted, it must be integrated across the ecosystem to be able to connect with the existing systems in place in a business.
- Technology must be open and extendable to evolve as innovation evolves over time.
- Software must be easy to use and implement so that it doesn’t require significant training or months of integration before it’s ready to be used.
- Technology must be welcomed by a workforce that wants to use it.
- Then there’s data protection and cybersecurity. It takes a complete shift in thinking to understand why data stored in a virtual place called the cloud could be safer than data stored in the big piece of hardware sitting in the locked room that no one goes in.
These echo some of the findings to come out of the Global Industry Council’s inaugural report, “Five Keys to Unlocking Digital Transformation in Engineering & Construction.”
Where to from here?
Digital transformation needs to be planned and approached in a way that looks at both the present and the future.
We need to encourage more digital skills in the industry. Digital transformation is not going to be successful if you don’t have people within the industry who know how to use technology in the most effective way.
Overall, the construction industry needs to change its mindset to evolve. Senior leaders within the industry need to understand the value of technology across the whole business. Executives must be the chief sponsor to ensure technology is being used to provide maximum benefit by all employees.
Click here to learn more about why cultivating digital talent in the workplace is paramount to success within E&C.