Aconex’s co-founder says tech essential amid financial fragility
Digital transformation can benefit the fragile and fragmented construction sector, but only if industry professionals are ready to embrace a new way of doing business, Leigh Jasper says
Leigh Jasper, vice-president of Aconex strategy and operations at Oracle Construction and Engineering discusses how engineering and construction businesses should set themselves up for digital transformation.
The construction industry has consistently struggled with the challenge of low productivity. Globally, the sector has annually seen average productivity improvements of just 1% over the past two decades – in comparison, the manufacturing sector averages around 3.6% globally. It’s clear that the construction 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.
However, investment in digitisation is lower in the construction industry than in most other sectors. Culturally, the industry has been reticent to adopt a digital transformation, but it is now at a point where it needs to evolve, as is increasingly recognised by the sector’s more innovative companies.
Is tech really the answer?
Technology’s applications in construction cover a range of areas such as scheduling, collaboration, project and cost controls, and benchmarking. 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 in the office, onsite, or in transit.
The creation of a common data environment through the use of building information modelling (BIM) can provide 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 to aid transparency and manage conflict resolution.
BIM also enables an asset, such as 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 has to 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 is used in the best way. It must then be embraced throughout the business to deliver significant change.
There are many reasons why digital transformation has not been embraced in the construction industry – these include 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.
Adopting modern technology requires skillsets at all levels to identify how to get the most out of what the technology can offer. To justify the expense of the technology, there must be data points to demonstrate the returns on investment and the value it can provide. Also, if and when the technology is adopted, it needs to be integrated across the ecosystem and be connected with a business’s existing systems.
The technology framework needs to be extendable and open to evolution, as innovation occurs over time. Aspects related to data protection and cybersecurity also take 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. Most importantly, the tech system must be welcomed by the workforce that is intended to use it.
Digital transformation needs to be planned and approached in a way that looks at both the present and the future, and we must encourage more digital skills in the industry. The process is not going to be successful if companies don’t have industry professionals that know how to use their technology in the most effective way.
Overall, the construction industry needs to change its mindset quickly in order to evolve. Senior leaders within the engineering and construction industry need to understand the value of technology across the whole business. They must be the chief sponsors of tech adoption to ensure the system is delivering maximum benefits to all employees.