Digitalisation of the construction industry

The global construction industry is known for its poor track record when it comes to driving change.

Construction today works the same way it did several decades ago, and unlike in other industries, no fundamental productivity improvements – if any – have been achieved. Cost and schedule overruns remain common, and digitalisation is in many cases no more than a buzzword.

But just like in any other sector, technology will fundamentally reshape construction around the world – driving productivity and efficiency, redefining the project lifecycle and creating new winners and losers. The question is when, and which firms will be willing to spearhead the transformation.

The power of digital

Moving from today’s paper-based processes to digital solutions can help address many of the typical pain points, be it managing the supply chain or tracking crew productivity to name but two of the many challenges.

Large construction projects are incredibly complex and require perfect synchronisation of people, equipment and material all the way from planning to on-site execution.

Existing digital solutions allow real-time and granular transparency on ‘all the moving parts’, powerful and timely analytics on progress and risks, enhanced coordination and, ultimately, better end-to-end management.

Building information modelling – BIM for short – will likely be the most disruptive digital instrument in the industry. It enables a 3D digital view on the physical and spatial dimensions of a project, fostering better planning and decision-making. At a conservative estimate, BIM can reduce total project costs by at least 10 per cent.

Regardless, many construction firms do not yet use 3D BIM, or have only started piloting systems. Imagine if BIM was adopted as a single shared platform between different stakeholders such as project owner, architect and contractor along the full project lifecycle. Add in project schedule and cost parameters to create 5D models, and BIM’s full potential can be unleashed.

The power of new construction technologies

Technology innovation is about more than digitalisation – advanced building materials; modular construction and automated construction all promise an optimised cost-time-quality equation.

Much has already happened, with new advanced building materials becoming commercially available (e.g. aerogels), and more is to come.

By contrast, robotics and 3D printing are still in their infancy and are so far technically limited to niche applications. This could change fast – for example, every new building in Dubai needs to be 25 per cent 3D printed by 2025.

Equally, the prefabricated modular construction (or more specifically PPVC) of high-rise buildings is already a success in countries like Singapore. This has not gone unnoticed in the industry. Particularly, GCC countries with a large need for social housing projects are looking closely at how to leverage off-site manufacturing to benefit from accelerated timelines and reduced cost.

Call to action

The construction sector, whether it is in the GCC or elsewhere, recognises the disruptive potential of technology. The problem lies with implementation.

There are many hurdles to adoption.

Some are beyond the control of an individual company. Take BIM as an example – it is not easy to have all key project stakeholders invest in BIM adoption, particularly if technology and contractual standards are still evolving.

Governments can be important catalysts, either as regulators or as project owners.

For example, by enforcing the use of BIM, rethinking contractual frameworks and associated risk-sharing mechanisms, or setting up incentive schemes to trial new technologies.

Yet the real issue is simple: It is difficult to teach an old dog new tricks. This holds true in construction, whether at supervisor level or in top management.

A shift in mindset is required.

A simple recipe to start the transformation journey for an E&C company could look like this:

* Hire a small team to drive change, potentially even just a single individual wearing the chief technology officer hat

* Start small and then scale up. Initially focus on trials in no-regret areas, build success stories and showcase the benefits to the organisation

* In parallel, define your long-term digital transformation roadmap

Digitalisation is a key enabler to drive up productivity, but it is not a panacea.

Contractors need to design and implement broader transformation initiatives to fundamentally transform the way they operate, be it in procurement, project planning and monitoring, lean on-site construction, or simply upskilling bluecollar workers.

Sassan Hatam is a partner at Roland Berger Middle East