The digitization landscape in the construction industry

Construction is undoubtably a tough market in which it is particularly difficult to maintain competitiveness. In light of this, digital transformation is now top of the agenda for many construction firms. The benefits of digitization have been championed across industries to the extent that we now see most businesses implementing construction software at some level.

The process of digital transformation involves the integration of digital tools to optimize processes and make them more efficient. It has been proven to create significant value for construction firms, with a swift ROI and increase in productivity.

Despite this, automation in the construction industry is not where it should be. In this blog post, I highlight some of the key findings we discovered from our research conducted with 100 construction decision-makers, with a strong emphasis placed on construction workflows and business processes.

The importance of business outcomes

The vast majority (94 percent) of construction executives and managers want to improve employee safety on-site. The industry has extensive safety requirements given the nature of the job and negligence with regard health and safety regulations can be costly to a construction firm.

For health and safety managers in the construction sector, the importance of risk assessment cannot be ignored. Potential hazards on a construction site require critical examination and careful documentation as manual administration can lead to human error.

Operational efficiency on construction projects is viewed by 87 percent as a priority and either very important or absolutely required. Enhancing operational efficiency allows construction firms to avoid overruns and complete projects on time and to budget.

Rather than being seen as just a commodity for business leaders, data should be considered a critical business asset and leveraged for business strategy and decision-making. The survey revealed that, for 96 percent of respondents, real-time project analytics is the primary source of information for decision-making.

Furthermore, 92 percent consider data insights as a high-priority business outcome, rating them as either very important or absolutely required.

Process automation and building information modelling tools enable real-time data access, high data quality and allow users to access data when offline. This is particularly useful on a construction site with limited online capabilities.

In a digital landscape where multiple applications are being used concurrently, systems need the ability to communicate with one another, feed through data and promote collaboration across the value chain.

The survey found that 88 percent of construction executives and managers want seamless integration of multiple solutions. The integration of tools is necessary to create a holistic data picture, generate transparency across project lifecycles and promote better collaboration between teams.

From our survey results we learn that construction executives and managers would like a workflow tool to integrate with finance systems, project and document management software, and customer relationship management and enterprise resource planning systems.

Roadblocks to digitization in construction

The implementation of a digital strategy can seem a daunting task for construction business leaders, particularly when they lack management support or engagement. With very few construction organizations having achieved full digitization of processes, construction remains one of the least digitized industries.

A total of 50 percent of construction executives and managers claim to be satisfied with current processes. However, the vast majority (90 percent) still use outdated methods such as email, excel or paper forms for 25 to 100 percent of their business processes. Almost half of respondents (47 percent) rate their firms at either a beginner or intermediate stage in their digital capabilities.

Statistics for processes based on outdated methods (Source: FlowForma)

Another roadblock to digital transformation is the perceived burden on IT staff. Many construction executives are wary of beginning digital transformation as they believe it cannot be supported as a strategy without the support of the IT team, or that the business does not possess the necessary IT talent to make it a success.

Security concerns rising from remote data access are a major concern for 53 percent of respondents. It can expose a construction business to cyber-attacks and malicious actors due to a lack of physical security controls and the potential for unauthorized access to systems. Security is a major concern for executives wanting to implement new digital solutions.

The Infrastructure Improvement and Jobs Act will funnel around US$1.2 trillion into US construction projects, including the nation’s roads, water systems and bridges. It is expected that the bill will increase the number of infrastructure-specialized projects that construction firms undertake and the level of construction activity.

Construction experts are aware of this, with 85 percent of respondents believing the bill will have an impact on project pipelines.

An upswing in digital transformation in the construction sector

Digital transformation in the construction industry is starting to take hold, with industry leaders increasingly aware of its benefits. In the survey, respondents are typically forward-looking, with most expecting to expand digitization efforts over the next 18 months.

It is clear that construction firms are understanding the value digitization can bring, with 87 percent of respondents stating that they believe it offers a competitive advantage.

How are digitization and automation progressing in your industry? Let us know in the comments below.

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