By Kalyan Vaidyanathan, CEO & Co-founder, Nadhi Information Technologies
Since the arrival of the internet and mobile telephony from the mid-’90s, the world is undergoing a rapid transformation in how businesses operate or so it seems. But in reality, the transformation of businesses and ROI realization through technology is a slow process. From 1994 to 2000, the world witnessed the first wave of technology transformation when the Dot-Com bubble marked the beginning of the digital era. And if we fast forward 20 years, things like email and messaging are only now becoming the norm across practically all businesses, for example.
Sectors like banking, financial services, insurance, telecom, and healthcare are forerunners and have definitely transformed their operations and realizing efficiencies using technology. With near-ubiquitous internet connectivity, cloud computing, mobility, they have automated a lot of their front, back, and middle office operations. And there are other sectors in the world is talking about Industry 4.0 as the next wave of automation. However, sectors like construction have been laggards in adopting technology. The industry has not seen a broad and wide sweep of adoption of technology in delivering projects more efficiently although pockets of automation in individual business process like accounting and finance and use of ERP systems are definitely happening.
Interestingly, if one were to explore and list down, construction has a plethora of technologies available. From basic collaboration tools to individual process automation tools for planning and design, to more recent advances in BIM, robotics, AI/ML, 3D printing, there are a wide range of technologies available. But there are a few factors that prevent both quick as well as wide spread adoption. Businesses need to understand and factor the same while drawing a roadmap on technologies they could adopt and how, realize its benefits in order to improve construction project planning, delivery and operations. So, what are some of the main reasons technology adoption in construction does not deliver the expected results?
Technology Before Process
Construction industry is complex by nature and one of the dimensions of complexity comes from the fact that there is a lot of fragmentation. Any construction project is delivered by a number of stakeholders (Owner, Consultant, PMC, Contractors etc.) that come together for the duration of the project to deliver the project. In this fragmented ecosystem, if the business process is not aligned to take advantage of the technology, the technology can be seen as additional work and not delivering the promised ROI.
Insufficient Change Management
Change, in general, is hard and adopting technology is no different. Senior management procures technology based on an expectation of ROI. And unless they set the right tone and drive the adoption of technology, it will be difficult to implement them. They need to pay attention to the details like a phased elimination of parallel systems (the current process that the technology is replacing with a new business process). We also think this means that senior management should provision more budgets for training that is sometimes compressed. Underestimating all of these unfortunately increases the chance of failure of adoption of technology, thus leading to failure of realization of ROI of the technology.
Bite Size Adoption
Finally, businesses should adopt changes in small steps. A big bang approach to digitize the entire business end to end will be too big a change for teams to adopt. Modular adoption of technology on a rolling basis makes adoption easier. Having change agents and champions within the organization to drive the modular change will further enhance the speed and success of the technology adoption.
In short, instead of racing to adopt the latest technology, construction businesses need to look at the to-be business model first that the future technology will entail. Then management will have to draw out a roadmap for a modular adoption of technology while being cognizant of the fact that they will have to re-skill people or acquire people with the requisite capabilities to create and drive the change.
Business leaders and decision makers must ensure while evaluating construction technology solution that the technology is built for distributed and fragmented ecosystem of stakeholders. The core realization is that construction projects are delivered by a virtual organization of distributed stakeholders and for efficient project delivery, the information sharing among these stakeholders should be managed effectively. Ideally all systems and people should get information without any latency and it should provide forward indicators into potential future time and cost overruns to help business leaders course correct projects and mitigate, if not eliminate the same.
So, what are the productive and innovative opportunities that companies in the construction space should look at first?
Whether it is a large real estate company with a portfolio of premium projects or a small or medium developer that specializes in budget homes, they can realize operational efficiencies using technologies if they cautiously consider the above before proceeding with technology adoption. In our opinion, here are some choices for businesses to consider
Project Collaboration Tools
Successful completion of capital projects depends on effective and efficient collaboration. Effective collaboration means moving beyond Email or messaging solutions like Whatsapp or using Excel trackers. It means truly ensuring that all stakeholders create information once for all to see or get notified based on their role and need for the same. Next level capabilities in collaboration automate the flow of information through the stakeholder chain through workflows (or a more advanced robotic process automation). For example, process automation can be used to automate billings with supporting documentation. Integrating that with ERPs means payments can be done in a timely manner creating predictable cashflows for contractors that in turn has a positive impact on timely completion of projects. Finally, a more powerful solution integrates the impact of collaboration and decisions (or lack of it) to time and costs and evaluates the future impact of current collaboration.
Project Controls Tools
The fate of capital projects first and foremost depends on whether or not the project is completed within budget and committed timelines. Having an end-to-end outlook from design through procurement and construction with a revolving set of stakeholders and a changing set of conditions is a huge challenge for all capital project owners. In short, having a single source of truth is a task and not easy to realize in construction.
But today, there are integrated project control solutions available with intuitive features that help stakeholders have a single source of truth and provide real time information for informed decision making on future time and cost overruns. With the availability of cloud infrastructure and mobile applications, these are available in a subscription based model making adoption easy, zero up-front investment and minimal training. Some of the tangible benefits or advantages for stakeholders include:
⦁ A more real time access to project metrics and KPIs on time, cost, and quality in one common data environment
⦁ A more proactive forward-looking visibility into time delays and associated cost overruns to help course correct
⦁ A friction free secured platform to have seamless coordination, collaboration, and communication across internal and external stakeholders with role-based access at a fine-grained level
⦁ A mobile platform that works at site conditions
BIM (Building Information Modelling)
As the successor to traditional computer-aided design (CAD), Build Information Modelling (BIM) now serves along the value chain, using virtual modelling and information to simulate any aspect of the project’s life cycle. BIM is the future of building design and construction. But realizing the value of virtual design and construction is a long road that goes beyond technology adoption. Each stakeholder has to obtain the skillsets and capabilities to work with this. BIM is not a 3D model or a 3D rendering software, but it is a process by which intelligent information is created to integrate 3D geometry with time and costs for stakeholders to virtually design and construct the building than do expensive rework at site. The benefits of BIM, we believe, is the inability to create supporting processes and ecosystem of stakeholders and is one of the reasons why India is still lagging in adoption of BIM.
The world is seeing a new normal due to the current COVID crisis. It has forced people to see the benefits of remote collaboration, work-from-home amidst a forced lockdown. Once it ends, we anticipate a new normal. We expect that sustainability and LEED will take more importance in the coming future with respect to construction project design. We anticipate that teams will be more comfortable with remote collaboration and virtual design and construction will leapfrog in a post-COVID world. All of this will only accentuate the need for owners to have a single source of truth and an integrated project controls solution that can help them with decision making. In general, we can expect to see technology adoption undergo an upswing post Covid-19. But for all of this to happen, businesses need to realize that IT is not a cost centre. IT investment aligned with people and processes will lead to more efficiencies in operations and innovations that ultimately will help capital projects be delivered within time and budget but without compromising safety, quality in a sustainable manner.