Digital transformation has the potential to move the industry into a modern world, though it won’t remain the whole answer.
Theresa May’s first announcement of 2017 suggested that her Government will make housing a key priority in the year ahead, building some 14 new ‘garden’ towns and villages across England. Though the idea has been proposed, is it a realistic goal this year?
Construction is not known for its productivity. And, while other core markets such as banking or retail have undergone a digital transformation in the last ten years to keep pace with consumer demand, the construction industry has been left behind. Recent Office for National Statistics figures on productivity revealed that the construction industry is performing close to the bottom of the pile, with manufacturing and financial services far outperforming it.
The data paints a bleak image of the industry. Low productivity means low output, late project delivery, reduced profits and expensive delays. Compounding the situation is the unpredictability of the construction sector, as seen in its structural and leadership fragmentation, low margins, adversarial pricing models and financial fragility. Add an apparent lack of a collaboration and improvement culture and a frequently dysfunctional training, funding and delivery model. You’d be forgiven for having a negative view of the market.
It’s not always been this way, and it would be wrong to think that the market is damaged beyond any point of rescue. All markets have their difficulties, and the construction industry has the ability and the capacity to become as fast-paced as others. It just requires the right facilitator to achieve its goals. Put simply – better productivity will lead to better built assets, delivered on time and on budget, and more profitable contracts.
How do we find a solution? Let’s first step back a decade. Productivity in construction within the UK is considered to have stalled in 2008, though the truth is that it was struggling for many decades before this. Could this be a result of not digitising at the same rate as other markets? Housing, public buildings and transport infrastructure are all essential to our lives and we wouldn’t survive without them, but if you were to rank digital uptake in construction against other sectors, only agriculture and hunting place lower.
You might ask why technology is important to productivity in a market that is as physical as building. For the Organisation for Economic Co-operation and Development (OECD), productivity means ‘working smarter’ – and that’s where technology has a part to play. There are several technologies in the market to help individuals and teams work smarter. They range from collaborative software platforms to measurement, design, forecasting and human resources tools, all contributing to the efficient management and delivery of projects. A measurement tool, for instance, can identify when a project is hitting its milestones and spot issues needing attention, and it can flag up points where productivity is falling short.
It seems such a simple solution, and it really is. What’s needed is a change of mindset and an openness to technological alternatives to traditional ways of working. If you’re looking for a way of selling technology into your team, discuss it in these terms. You can draw direct parallels between increases in the size of a project, the number of parties involved, and the likelihood that the contract will overrun and overspend. McKinsey & Company tells us: “Large projects across asset classes typically take 20% longer to finish than scheduled and are up to 80% over budget.” If size is the issue, this suggests better organisation and communication is the solution. And what better way to manage these areas than with the right technology?
There are numerous collaboration technologies designed to improve productivity. Historically, described as a collective, ‘collaboration platforms’ can be used to improve the design, engineering and construction process by integrating working practices and project communications across disciplines and supply chains. What this allows is the ability to optimise working practices – this is key for productivity.
Another more recent industry innovation with the potential to yield better results is Building Information Modelling (BIM). BIM allows the multidimensional visualisation of the virtual asset prior to its physical construction – the ‘digital twin’ – with all of the associated project data. BIM can be used during the design phase of a construction project to reduce errors that often result during the traditional design process – i.e. design clashes or duplications.
Designers and constructors can work together to design for optimal construction. BIM offers the ability to capture and structure vast amounts of data around projects and assets, enabling businesses to optimise decisions and processes. Thanks to the increased level of data now being captured, managed and assimilated, BIM helps the industry implement new working practices, communication processes and control functions. Right from the start of a job, BIM cuts costs and saves time so that teams can work more effectively.
A Common Data Environment (CDE) is key to making BIM effective across disparate teams. In using CDE to support the management and control of multidimensional models and associated data sets, teams can create a common and shared database for the collection, verification and collation of detailed information around projects. This improves productivity by speeding up the process of estimating, construction planning and logistics, through to the eventual physical handover, from construction to operations and maintenance “O&M”. Including O&M considerations in ongoing design and construction decisions will improve a company’s overall productivity, making working practice improvements for a whole organisation. And with all stakeholders engaged in real time, facilities can be enhanced and adapted to suit all parties and ensure that they perform optimally.
If you needed further evidence, just look at some of the most digitally engaged industries out there. Many of them use similar collaborative platforms within their supply chain and their internal operations, although they have often matured to help better manage the inter-dependant constraints of time, cost and quality.
For a project to be successful – and productive – a multitude of contractors, architects, engineers, subcontractors and suppliers need to be able to communicate and work together, within a framework typically shaped by contract relationships. Each one might have different objectives, but their goal will be unified: to complete construction and deliver the built asset with the highest possible quality, and as quickly and cost-effectively as possible. Whether those contractors number five or five hundred, collaborative platforms, such as CDEs, offer the agility that each one of them needs to contribute effectively.
For the industry to move forwards, we can better recognise the benefits that digital transformation will bring to the industry. Digital transformation has the potential to move the industry into a modern world, though it won’t remain the whole answer. A range of tools, along with new attitudes within the industry, must come together to ensure that the productivity of the sector is nurtured and grows.
Cloud collaborative platforms and BIM techniques can both support project delivery. Technology, mapped to more modern working approaches and attitudes, can transform the way teams work together, increasing transparency and accountability, improving contractor insight and, ultimately, boosting productivity and performance.