Technology is changing the construction industry much faster than some firms can adapt. The 2016 Engineering and Construction Trends report from PWC emphasizes the importance of adopting technology. The report identified technology advances as one of the top five global trends that will impact AEC firms. In fact, technology advances was the trend at the top of the list—ahead of demographic shifts, shifts in global economic power, resource scarcity and climate change, and urbanization. According to the report, engineering and construction firms must, “embrace engineering and construction technologies and specialization that lead the market, outpacing competitors.”
To stay competitive, win new customers and retain a solid base, the construction industry — notoriously a laggard in technology adoption — must move toward adopting digital technologies. Opting out is not an option. Digital disruption is happening now, and architecture, engineering, and construction companies must “go digital or go home.” Those firms that successfully blend change management with process reengineering and new technology deployments will strengthen their position in the marketplace and gain a competitive position for the indefinite future.
Laying down a technology-based foundation for success
The first step in doing what is right for the company is to establish a technology foundation that supports both efficient and repetitive processes internally, as well as the ability to quickly connect to the broader technology ecosystem that connects firms to project owners.
According to a McKinsey & Company study on the construction industry’s digital future, a key reason the industry has a poor productivity record is that it still relies mainly on paper to manage its processes and deliverables, such as blueprints, design drawings, procurement and supply-chain orders, equipment logs, daily progress reports, and punch lists. The study authors advocate process digitization where firms move away from paper and toward online, real-time sharing of information to ensure transparency and collaboration, timely progress and risk assessment, quality control, and, eventually, better and more reliable outcomes.
Success with technology deployments is the sum of process + technology + people + data. It is far too common that firms acquire technology and attempt to implement it on top of their existing processes, shying away from making significant changes in operations. Yet, research supports the fact that those gaining the most from their technology deployments are those firms who reverse this approach and reengineer their processes to be digital first and then apply the right technology to the new process.
In the construction industry, the processes between project management, field operations, report delivery, and billing are often fragmented; characterized by manual efforts, duplicate data entry, and dependence on spreadsheets. This all adds up to higher overhead than necessary.
One of the most challenging situations faced by organizations today, especially those who are managed in functional silos, is to connect all of the disparate applications that continue to proliferate throughout the organization. This should be a team effort to not only identify the applications in use, but to determine the roles the various applications play and analyze the value of each application. The need to communicate and align frequently is paramount because seemingly minor modifications could significantly increase timelines or costs if made too late in the game.
TECHNOLOGY IS YOUR FRIEND
Technology allows project team members to communicate with each stakeholder to share information in a timely manner and in an automated fashion. It also fosters best practices around centralized information that can be easily tracked, accessed and shared across all project team members as well as clients.
Construction firms and their clients are demanding accurate information that’s faster and available when, where, and how they want it. Without seamless process automation, information can get lost, accuracy is compromised, changes are unauthorized, and rework is commonplace. There’s also the possibility of project delays and cost overruns that can further infuriate customers.
Connecting these processes in a manner similar to repetitive manufacturing processes and applying the right technology to this repetitive process can eliminate these conditions.
Instituting consistent and repeatable processes hold other advantages as well; the learning curve for new employees is reduced, the ability to rapidly scale across resources and projects is improved, integrity of data accuracy and data normalization across processes and projects is optimized—all resulting in improved profitability.
Understanding the technology landscape to support the digital journey
Creating a diagram of the current and future state of a company’s technology landscape is an effective tool to plan and manage the needed fusion of technology and process.
At the heart of the landscape for construction firms are the core foundational applications that are required to run the business, including ERP, CRM/Quoting, Field and Lab Operations, and Data/Document Management solutions. The specific functions served by each of these applications should be mapped out and integrated to support a firm’s lean process. For all data master files, such as customers and projects, identifying which application is the system of record and designing processes and integrations to share those master files across other systems of reference is key to providing data integrity across the landscape.
These applications should allow for data capture at the point of origination and provide audit trails of data improvement throughout the journey to the point of delivery. It is essential that duplicate processes, manual processes, and dependence on spreadsheets be identified and eliminated.
Technology is key to diminishing the threats while at the same time unlocking new opportunities and creating competitive differentiation going forward. This technology-infused future demands organizations to think and act differently. This new approach—with technology at the center—is a combination of reengineered operational processes, data, and new organizational structure.
This article originally appeared in Modern Contractor Solutions.
This post was written by Alan Littman.