The construction industry is one of the World’s most important. It is also one of the least digitized industries. Construction firms quickly realized that they must adapt to today’s digital realities to remain competitive in the coming years and decades. There are global, national, and small players in the construction industry. Despite differences in industries, projects, and working conditions, both planning efficiency and productivity are low. Projects frequently run late and are over budget. Digital transformation in the construction industry refers to the use of digital technologies for more efficient operations. Digital technologies can range from physical devices to software used in the office or on the job.
Forecasting is critical in today’s construction industry. Financial risks to projects can be identified using digital tools and meaningful data analysis. Small construction firms can use digital tools to manage risks and measure performance. Companies can more accurately track cash flow, margins, billing, and procurement, as well as make cost projections. Construction managers can use the power of integration to connect their business intelligence (BI) tools with their tech stack to get a comprehensive picture of the company’s performance and trajectory. This results in less effort and better decision-making on every project.
The hurdles are understandable. A standard construction project involves a slew of independent subcontractors and suppliers, who have little incentive to adopt new methods during their brief time on the job. Because projects vary greatly, E&C firms frequently struggle to develop tools and methods that can be used repeatedly. Limited R&D budgets prevent E&C companies from investing as heavily in digital as companies in other industries. And construction work is frequently performed in remote, harsh environments that are not well suited to office-developed hardware and software. It’s no surprise, then, that many E&C firms end up with little to show for their technological investments.
Executives and managers must begin with a clear definition of how digital will create value for the business for a digital transformation to be successful. They need to dedicate just as much time to operational change as they do to technological change during the transformation. Those who comply stand to gain significantly in terms of productivity. According to McKinsey Global Institute research, digital transformation can result in productivity gains of 14 to 15% and cost reductions of 4 to 6%.
The five capability categories of leadership, processes, methods, resources, and expertise are the foundation for engagement with digital transformation specialists, which offers organizations a structured and staged approach to achieving sustained success. A suitable digital transformation process is intended to develop the necessary capability and capacity, as well as to equip management and staff to deliver collaborative projects. This represents a fundamental shift in how one conducts business, engages with partners and suppliers, and adds value for their clients. In the digital age, focusing on people, culture, and behaviors will lead to long-term success. Complete information integration (management databases, GIS, quality, environmental, surveys, etc.) is required.
By defining digital use cases that will enable operational changes that will improve performance, construction companies can increase the likelihood that digital technologies will have a positive impact. This process-centered approach assists in focusing each use case on a genuine business need while suppressing the desire to chase technological trends. Use cases defined in this manner provide greater benefits while increasing workforce understanding and conviction, from the CEO to managers and frontline workers across various functional groups and decentralized business units. Such use cases are also easier to replicate across projects and introduce to new employees.
Construction firms should therefore pay special attention to activities that involve multiple disciplines and groups, as well as design digital use cases that facilitate interactions between them. Real-time progress reporting from the construction site, for example, can help ensure that subcontractors raise invoices on time and accurately. Of course, use cases can be more difficult to implement when multiple designers, subcontractors, and specialists are involved. However, if companies implement compelling incentives, cross-cutting use cases can unlock significant value despite industry fragmentation.
Workers on construction sites haven’t always informed suppliers of all flaws in the components they were producing. When they did provide feedback, it was ad hoc, unstructured, and difficult to implement. Defects persisted, forcing workers to either repair defective products or wait for replacements. This unanticipated rework raised labor costs and caused delays.
Using these new techniques necessitates designers not only learning technical skills but also design in novel ways. They should also begin to adopt digital ways of working, moving away from a traditional, linear design process and toward a more agile approach that includes faster iteration in short test-and-refine loops. Such a shift necessitates a shift in mindset on the part of designers, who must use their experience to validate model results and look for opportunities for standardization and repetition. This method of working frees up designers’ time to work on more intellectually challenging problems, such as reviewing and refining generative designs, for which engineering brainpower is indispensable.
