Why technology matters in Construction

The Construction industry has seen its demise spelt out by analysts and the media, as well as having experienced first-hand the catastrophic consequences of operating under negative operational margins, if Carillion’s example is anything to go for.

On a more positive note, however, there are still those who believe Construction on the whole and its various distinct sectors in particular, like Civil Engineering or Utility Contracting, can move away from their current low point and generate new, better value, not just for themselves, but certainly for the entire economy. Technology is a very important part of that equation and we would like to explain exactly why, taking the lead from Industry Reports compiled by leading third parties, such as EY and McKinsey.

What construction can learn from the agile movement

The agile movement that has permeated tech companies in Silicon Valley and beyond can ultimately be interpreted as the expression of a VUCA world in which traditional ways of thinking and acting no longer hold true. Agile assumes that there is no such a thing as a perfect scenario in which to operate. It also assumes that change is inevitable and presents itself as an outstanding opportunity for improvement. With this mind-set come different ways of thinking, such as iterations and sprints. These could all be encompassed in one of the Critical Success Factors highlighted in EY’s report: Innovation alongside a lean and agile working model. 

Despite the fact that Agile is only one in ten identified critical success factors, the consequences of not adopting an Agile approach can easily be felt across the entire project lifecycle in the Construction industry. This is where technology itself becomes paramount.

What problems can be tackled through construction technology?

The following is not by any means an exhaustive list of malaises, but rather a starting point to initiate a conversation on the issues that afflict many businesses in construction and how software for the construction industry can help to effectively address them. *

Risk across the contract life cycle

  •  ‘Ability to deliver’ — strong/ flexible operational capability to meet contract requirements 

  • ‘Visibility’ — clear management information (MI) is critical to allow timely monitoring at contract and consolidated level 

  • ‘Plan B’ — reactive ability to manage underperforming contracts and mitigate damaging public relations/costs

Front and back office  

  • Minimal investment in IT and MI systems resulting in over reliance on manual processes 

  • Lack of accurate and up-to-date MI which prevents senior management understanding contract performance and issues 

  • High organisational complexity resulting in a fragmented culture, a lack of transparency and minimal management of innovation 

  • Absence of visibility at Group (and often divisional) level of active project performance and identification of emerging issues 

  • Weak processes to resolve issues leading to difficulty in collection of retentions and final account payments 


The path to effective and efficient digitisation in construction

We view digital as the nearly instant, free, and flawless ability to connect people, devices, and physical objects anywhere. 

By 2025, some 20 billion devices will be connected, nearly three times the world population.

Over the past two years, such devices have churned out 90 percent of the data ever produced. Mining this data greatly enhances the power of analytics, which leads directly to dramatically higher levels of automation—both of processes and, ultimately, of decisions. *

If we had to sum up how digital technology can make all the difference to the construction industry, these would be the keywords we’d use: connectivity, visibility, analytics and constant improvement.  It is not enough to deliver the work agreed to: for contractors in particular, it is crucial to be able to determine, on a daily basis, how much money was made yesterday.  Secondly, management must be able to improve on yesterday’s score, become more productive and profitable. Thirdly, real-time connectivity and visibility between front and back office are needed. Last but not least, after work has been completed, it still has to be billed for, requiring additional processes.

Technology can and does help businesses to become reactive and proactive throughout the entire cycle of contract management, down to getting paid for work delivered. It also helps to pinpoint possible areas of improvement, where efficiencies can be sought.

Looping in mobile technology, analytics and IoT for construction 

Advanced analytics enabled by the Internet of Things to improve on-site monitoring of materials, labour, and equipment productivity; and digital collaboration and mobility tools (such as construction management apps loaded on mobile devices) to better track progress and collaborate in real time.* 

In a nutshell, this is the kind of impact technology that construction companies should be striving to adopt and implement. On future posts, we will be looking at the ways technology solutions can help tackle each of the challenges highlighted above.

Discover mobile technology for the construction industry today. Start here

 

*https://www.mckinsey.com/~/media/McKinsey/Industries/Capital%20Projects%...

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