From the time the first cave paintings were made some 64,000 years ago humans have recognised the importance of knowledge transfer.

While the concept of knowledge sharing isn’t new – the methods that can now be used are, as you’d expect, far more advanced. If we take this in the context of today’s construction industry, the technology that can codify and share project, company and human knowledge presents a significant opportunity to improve productivity and reduce risk. With this goldmine of connected data at our fingertips that allows for the proliferation of institutional memory, what is the true value for the industry, and how can organisations ensure they take full advantage of it?

Capital project institutional memory explained

Apart from tangible knowledge held within documents such as legal guidelines, project roadmaps, reports and technical drawings that employees often have to pore over to glean useful information, an abundance of intangible knowledge also exists in the hands of the most experienced personnel. While this knowledge may be transferred to other employees by veterans or obtained first hand when actively on the job – there’s a big chance that information like this is never formally retained, and often, even leached to competitors when employees change jobs.

Tangible or intangible, this information forms an organisation’s institutional memory. When captured and digitalised in a structured way to scale up over time so that employees can benefit from knowledge transfer between projects and systems, as well as from employee to employee – teams can be better informed for future projects. In capital projects, budget, schedule and risk are under intense scrutiny, so the benefits this brings when executed effectively are pivotal to a company’s growth, competitive edge, and capacity for innovation and stakeholder partnership. Those that do not address the generation, process and project transition in the next few years, will face significant challenges in delivering capital projects in a smarter way than their peers with robust institutional memory. Here’s why:

1. It represents a company’s competitive edge.

Institutional memory is an invaluable asset. It is a company’s intellectual property and corporate DNA,  combining accumulated knowledge, risk learnings, or specialised techniques and the outcomes of applying those techniques. The goal of capturing, organising and digitising institutional memory is to reduce the knowledge gap between experienced and new employees, along with old and new projects of a similar nature, providing teams with a means to upload and download information essential to the success of their work. Having a dynamic and scaleable reference bank will also ensure that employees can access real-time insights needed to minimise risks, improve operational efficiency, control project costs and make more informed decisions.

2. It ramps up efficiency.

Few capital projects are the same with timelines, location, regulations, supply chain disruptions and materials just some of the many variable examples. This makes it essential to build a dynamic bank of reference for organisations to determine the best estimates, schedule and delivery method. Having a bank of project performance data also facilitates benchmarking for the future. With this data AI can be applied to streamline proccesses, automate scheduling, allocate resources, and inform procurement, to help avoid delays and cost overruns, enabling project teams to determine the most effective approach to delivery.

3. It facilitates generational transitions.

Skilled labour shortage, an aging workforce and a strong pipeline of projects can create a concerning intersection of needing fresh talent to execute on complex projects – and fast, with innovation and increased productivity. Teams also vary from project to project, and the retention of talent is a constant challenge for the construction industry. Institutional memory provides a legacy of insight, critically important to implement a structure for retaining knowledge from past and current project delivery, to enable better decision-making. Encouraging a diverse and skilled Gen Z cohort into the sector will also provide assurance for the future, and a digitalised and accessible institutional memory enables organisations to demonstrate that they offer an attactive vision and culture of successful project delivery.

4. It creates the capacity to innovate.

With today’s advanced technologies, evolving construction standards and the increased emphasis on sustainability, continuous innovation is crucial, and we see this accelerating with processes such as advanced manufacturing, digital engineering and automated data capture on job sites becoming more commonplace. However, companies cannot innovate and compete with the best without having the right technologies, systems and processes in place to unlock new efficiencies.

Often, veterans in the industry with 20-40 years of experience may seem to grapple with innovation, but the reality is that they are a fundamental pillar to driving innovation. With institutional memory systems in place, their knowledge can be captured and processed, and this, integrated with new project data, AI and advanced digital tools, will drive up the pace of innovation.

5. It mitigates risk.

Without a doubt, estimates and schedule accuracy are among two of the most crucial success factors for both capital project owners and contractors. If lessons from past project delivery can be captured and assessed, it can reduce the risk of making errors or being blindsided by simply taking strategies from the past that yielded good results but are not necessarily suited to the project at hand. The accuracy derived from knowledge management systems and processes can also reduce risk throughout the lifetime of an asset, and empower companies with agility, especially if circumstances change and quick decisions on pivot strategies are required.

6. It builds company reputation as a more valuable partner.

In the landscape today, multi-stakeholder scenarios are increasingly common. Any organisation that can bring its decades of experience into a venture – all retained in its project control solutions which determine accurate estimates, schedules and effective processes, customised to suit each project – instantly becomes an incredibly valuable partner in project stakeholder groups. The most effective alliances in project delivery today involve organisations that know their strengths and play to them. Retained and applied institutional memory allows firms to consolidate and leverage all the expertise they have acquired through thousands of people and projects, potentially over decades.

Moving ahead

To take full advantage of the benefits discussed, organisations have to start now to put the systems and tools in place, so that both good and bad decisions can be captured, to create their institutional memory. Structure is key here, as while AI can help trawl through datasets to determine patterns and insights, there needs to be structure and consistency of data. For starters, project estimates and capturing data from projects with a common CBS (cost breakdown structure) allows for useful comparison. Recording progress and outcomes is also essential as standardised data structures are a challenge for the industry and utilising solutions that can help address this is equally vital.

By Rob Bryant, EVP, Asia Pacific & Japan at InEight Inc.

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