The construction industry is getting carpet bombed with a new view on its future almost every day.
Most constructors I know are so busy managing the complexities of today’s business that they have little time to contemplate tomorrow. If you do nothing else today, I urge you give attention to the video “Navigating Digital Disruption.” It’s very relevant to all construction enterprises.
I have tried to distil some insights here that you may find of interest. I am as cynical as most about trying to point to a clear way forward. Most think it is for governments to show the way and invest in any transition. The reality is that they too are stuck, and tend to be swayed by the noisiest advocates. When you peel the covers back to ask why a particular advocacy is being pushed, you can generally find a self-serving reason that is unlikely to serve everyone. In the end, you have to decide.
Three themes I think may be useful to explore include:
- What will happen when construction really signs up to the digital economy?
- How technology ecosystems are enabling construction’s digital transformation
- What is left for governments in the scheme of things?
A lot has been written and said on how the digital economy is transforming all industries. This is an inescapable phenomenon. In construction, a big theme is BIM, but that’s just part of the story. McKinsey & Company recently released a publication, Imagining Construction’s Digital Future, that is of interest. Co-author Mukund Sridhar gave the keynote at Melbourne’s Construction Technology Summit recently. Sridhar points to the need for an enterprise view of digital innovation investment and for the industry to look beyond expecting single project paybacks as the way forward.
The hosts of the Construction Technology Summit were Aconex and the Victorian Government. The major supporters were the Australian Contractors Association and Facilities Management Association. There is a big push to have BIM legislated for all government projects over $50 million in value by the major contractors, designers and facilities managers, and it’s easy to understand the growing value of every project now having physical and digital twins.
For constructors, this is not just about project definition, procurement, as-built records and building maintenance. The digitisation of construction will now reach to smart materials, installed sensors in everything and increasing interactivity with the users of buildings and infrastructure. It’s also about the enterprises of construction.
So, the digital conversation is not just about large projects. The industrialisation and globalisation of all construction will be enabled by digitisation. This will apply to large and smaller enterprises, just as it will apply to large and small projects. Concurrently, the digitisation of construction will call for new mindsets and capabilities. These will involve reimagining what tomorrow’s construction client will expect and how their buildings should integrate with the way they live, work, move around and interact with their digital twins.
New capabilities will mean recalibrating how enterprises function, how they re-imagine almost every past transaction process and how risk will be mitigated, not just shuffled on.
Tomorrow’s construction projects will be sub-optimal unless they are conducted by modern construction enterprises. Sridhar summarized his keynote speech by saying that it will not be possible to hide performance any more, that shared data will be good for the industry and that this transparency will involve a transformative journey over three to five years that must to be deeply rooted in the enterprise context. Yes, it will happen that fast.
Klaus Schwab, chairman of the World Economic Forum forecast that “in the new business world, it’s not the big fish that eat the small fish – it’s the fast fish that eat the slow fish.”
Aconex CEO Leigh Jasper described the summit as an opportunity for technology providers to show how the new digital ecosystem would enable construction enterprises to improve their productivity and effectiveness. The Victorian government makes no secret of its intent to position Melbourne as Australia’s centre of excellence for construction technologies. The summit brought together over 20 startups and SMEs to showcase the sorts of technologies that will drive the digital economy innovations that are reshaping construction right now.
Progressclaim.com integrates with leading ERP and accounting software. CEO and founder Lincoln Easton was happy to share his insights into how he sees construction’s digital future unfolding. Progressclaim targets Australia’s top 100 construction organizations to provide head contractors, sub-contractors and owners, developers and consultants with a cloud-based solution which streamlines the construction progress claim, contract administration and payments processes across a collaborative platform using a tablet APP, desktop website and mobile APPs. He imagines tomorrow’s constructors will look back and not conceive how archaic the grief that construction’s historical payments culture and practices once caused.
My expectation is that technologies like these will drive the cowboys out of the construction industry, as they too will have a digital twin the follows them around…forever. In much the same way that Uber and Airbnb customers can rate their drivers and hosts, so too can those drivers and hosts rate their customers.
It’s amazing that that these new technologies are starting to regulate behaviour in a way that governments have not been able to. I also envisage digital transaction platforms becoming the enabler for off-site and off-shore progress payments as off-site manufacture increasingly transforms work methods on-site. I expect the processes of compliance and certification will lead to a ‘chain of custody’ where construction inputs can assure clients will get what was contracted. New accountabilities will fall into place. Again, this is technology solving vexing industry problems where governments have failed. Weak links in the future supply chain will be just that, and they won’t survive.
I was naturally attracted to the Cranetime exhibitor, as crane productivity is an area in which I have a noted interest. I have taken issue with project managers and quantity surveyors who fail to challenge contractors to deliver better utilization and effectiveness from this expensive site overhead when tendering construction projects. They are happy to roll over and accept poor project planning and have the wool pulled over their eyes when the BIM optimisation argument is made to assert that a project has well been modelled for on-site efficiency.
I have noted in the past that the physics of cranes which define their lifting capacity and effectiveness will be just as influenced by digitisation, robotics, real-time performance measurement and 24/7 diagnostics priorities. Some have admonished my assertion that diesel-powered cranes will progressively give way to silent electric cranes that enable hoisting when urban centres are less pressured. Some still think the speed of hook back to the street is the important performance criterion in selecting their next crane.
Well, that’s all about to change. Cranetime provides a range of digitally supported craneage management tools, ranging from centralised management of multiple cranes, an on-line calendar booking system and real time monitoring of daily crane activity. Cranes too, now have digital twins.
So here we have Sridhar’s prediction that it will not be possible to hide performance any more, that shared data will be good for the industry and that this transparency will set new performance benchmarks. So what will project managers and quantity surveyors do now? Perhaps they will actually do their job and start to imagine how construction productivity can be improved across the board. Not just on-site but in the way projects are designed and organised well before the first blow is struck on-site. They will not be able to hide behind their fear that if they ‘take contractors on’ in a quest to achieve better value for money for construction clients, they will be penalised because contractors are clients as well.
The Hickory construction company has made a huge investment in building innovation. Hickory’s projects show that construction times on site can be cut by up to 40 per cent. Hickory is using electric cranes to lift optimised construction loads of 20 tonnes that incorporate integrated structural methods and façade systems. The projects stand in stark contrast to peers who still have up to 20 levels where the leading construction work-faces remain open to weather disruption and extensive duplication of temporary construction edge enclosure systems, avoidable internal hoisting, waste and on-site workforces needing more sheds, more supervisors using traditional on-site fabrication methods. It’s useful to point out that Hickory is now using ‘out of normal work hours’ construction consents to lift their integrated structure and façade systems with city resident blessing. They are taking daytime pressure off of already clogged streets. So much for “that will never happen.” The digitisation and industrialisation of construction genie is well and truly out of the bottle.
While BIM-enabled construction seemed to be centre stage at the Construction Technology Summit, it would be wrong to assume that this technology is the only choice for the industry. Smaller construction enterprises providing integrated design and manufacturing capabilities are turning to related technologies such as Rubysketch and Autodesk’s Inventor. It is these technologies that will enable new construction startups to build powerful digital enterprise platforms that combine with an ecosystem of business enabling technologies to challenge their traditional construction counterparts. One to watch will be Strongbuild, a NSW residential builder now powering into its industrialised future. It’s all about the fast fish now starting to pose a serious threat to the larger slower fish.
A few contractors still wrestling with their daily construction reality may have tuned out by now, but for those with a bit more stamina, there’s a little more to share. This may seem far-fetched, but modern construction enterprises will need a ‘tech geek.’ This just one of the many new jobs and business enabling opportunities that a digitised construction industry will present.
In talking to the technology vendors present at the summit, it was clear that another phenomenon was at work: collaboration and open sharing. It goes with application program interface protocols (APIs) that allow one vendor product to plugin with another. This is important, as a one-stop shop will be unable to solve or support every construction customer’s needs. There are rules to these practices that allow the global digital eco-chain to link with one and other across multiple markets. One described that as ‘Glocal’ solutions.
For governments, the future is even more challenging. Their once domestic jurisdictional authority is increasingly being diminished. Globally orientated construction technologies are unsentimental about where home is or may have been. Construction performance and integrity will soon be marching to the beat of the digital drum. And that drum seems capable of dealing with some of construction’s old chestnuts such as risk adversity, adhoc payment systems, uncertain product compliance and certification accountability, underinvestment in innovation and the havoc caused by thinly capitalised third parties.
There is still plenty to do. Setting measurable targets that a productive construction industry should aspire to would be a start. Establishing the infrastructure to collect and share benchmarked construction productivity data that would enable a pre-competitive basis for aspiring new construction enterprises to launch and innovate from is paramount. Australian governments should collectively act to create consistent standards and regulation of construction at home. That would make it easier for the industry to build national scale and not be burdened by petty state differences. They should recognise that a serious investment is needed across construction’s academic and training institutions to enable modernising what is taught, how it is taught and how Australia could become a world class hub for modern construction education and research. I’m not just talking about incremental stuff at the margin, but stuff that will catapult Australian construction into high regional standing.
Most importantly, governments must have the resolve to stand up and enforce the law. They need to apply this resolve without fear or favour commercially and industrially. Without lawful certainty, the atmospherics needed to optimise the national potential that Melbourne’s Construction Technology Summit presented will fall short – potential that could just as easily go elsewhere.