We brought together business leaders from AECOM, Arcadis, WSP, Morgan Sindall, BAM Nuttall, GHD, Laing O’rourke and Pell Frischmann at a round table dinner, to collectively discuss the challenges they face day-to-day when it comes to the adoption of digital technology.
As with so many industries, the AEC sector is not exempt from the challenges around adopting new digital technologies.
In 2018, PwC produced a digitisation index which identified the impact that technology has had on productivity over the last 30 years. The report outlined what you would expect – digitally native industries such as finance, telecoms, and media have seen mass productivity uplift due to digital influence. Industries that are inherently more physical – where tasks tend to be more manual, such as construction – haven’t been able to participate in this digital revolution on the same scale.
Construction is one of the most laggard of these sectors and currently undergoing its own digital transformation. The 21st century has seen the slow introduction of new disruptive technologies, improved business models, and the merging of virtuality and reality in digital twins.
As the sector slowly but surely starts to adopt these new technologies, we brought together business leaders in the AEC space at a round table dinner to collectively discuss the challenges they face day-to-day when it comes to the adoption of digital technology.
Here are 3 obstacles to adopting technology in the AEC sector:
1. Connecting the technology with business objectives
Those who are champions for the adoption of new technologies in the workplace have the challenge of compelling more conservative stakeholders to leave the manual, old ways of working in the past. A common consensus among those who attended our round table dinner was that digital, in general, is not on the top of senior executives’ agenda.
Whilst executives are open to working with tech startups, in order for senior leadership to approve any major investment in new technology, there need to be clear ways to measure the value it can create.
The mindset towards risk in the construction industry is largely conservative. This is to be expected considering how dangerous the work can be, and because of how competitive the market is. While this means that the UK has cost-conscious contractors who deliver excellent infrastructure at value, it’s resulted in an industry constantly under pressure to seek a margin. According to the CFMA, pre-tax net profit for general contractors is between 1.4 and 2.4%.
The impact of adopting any new technology needs to be forecasted and communicated in a very simple way in order need to show a clear, proven financial impact on cost or profit in order to qualify for any type of investment from senior executives.
2. Finding the right talent
We found that the AEC sector faces two issues when it comes to talent; not training staff adequately in the utilisation of the new technologies, and struggling to find the right talent at all.
Some people love learning how to use new technology. Others resent the change to what they consider tried and tested processes – a workflow they can do with their eyes closed. In construction, this mindset is very common. For the new technology to be successful, staff need to be won over to immediate benefits. Ideally, you can demonstrate benefits and get them excited about the savings of time and cost.
Every piece of new software or technology adopted by a company is going to require training to optimise usage from employees. Training is an expense, and it is an area where some businesses neglect after getting excited about the initial implementation of technology.
When looking at the struggles of finding the right talent, people in the field comment that it’s no problem hiring recent graduates, but keeping them after five years is difficult. There are not many young people entering the profession, and there is also a lack of talent at the 10+ years’ level of experience.
A senior industry leader emphasised that there are two options when hiring tech talent; you can hire an SME (subject matter expert) who has a complex, comprehensive understanding of construction, but lacks skills in statistics and coding, or hire a data scientist with a core understanding of statistics who can deploy scalable machine learning, but doesn’t understand construction processes and projects.
Recent research from Sensat provided insight into where the main thrust of digital innovation is going to come from – as there is a real skills gap when it comes to digital twin technology and AI.
This labour shortage has also brought the lack of diversity at AEC management level into the spotlight. With retention problems exacerbating the current gap of qualified labourers and tech professionals, the lack of diversity transfers further than just moral questions; experts say it is holding back companies from higher profits.
3. Deriving real value from data
In the construction industry, as in other sectors, big data refers to the huge quantities of information that have been stored in the past and that continue to be acquired today. Huge amounts of resources and work go into major construction projects which means that huge volumes of data are generated.
AEC companies have access to diverse data sources such as on-site workers, cranes, earthmovers, supply chains, and even buildings themselves. The idea behind harnessing this is to gain more actionable insights and make better decisions. This means not only accessing significantly more data, but by properly analysing it to draw practical AEC project conclusions.
It was a common consensus at the round table dinner that while most people know they should be collecting data, they don’t actually know why or how they make it useful. A senior executive from a construction company commented that in order for data to actually be valuable, it needs to provide answers to one of the following:
- Do we stop the project because we aren’t going to make a profit?
- Do we put more resources into the project because we are behind schedule?
- Do we inform the client that the project is behind schedule?
As with other industries, an obstacle in construction is that much of the data collected is siloed – held in isolation by the business or division which collected it. Unfortunately, many stakeholders view data as something that is proprietary which shouldn’t be shared with one another.
Oxford Economics found that by 2030, the worldwide market for construction services is expected to grow by 85% to $15.5 trillion. This will present huge challenges, both in ensuring a sufficient supply of skilled labour and adopting new technologies to drive efficiency and innovation.