Academic journal article Research-Technology Management

The Construction Industry Goes Digital

Academic journal article Research-Technology Management

The Construction Industry Goes Digital

Article excerpt

For decades, the construction industry has lagged behind other key industries in adopting digital technologies, but surveys and industry leaders say that is changing rapidly. The change is largely being driven by increased competitiveness and tighter construction budgets. Cost overruns and schedule delays can no longer be accepted as industry norms, industry officials agree, especially since affordable technologies are now available that help engineers, architects, contractors, materials manufacturers, and supply chain managers plan, communicate, and adapt on the fly. Digital tools and processes could save the global construction industry $21 billion a year over the next decade, according to a recent Boston Consulting Group report.

The construction industry has traditionally invested very little of its revenue in R&D, according to a recent McKinsey study--just 1 percent of revenues, compared with 3.5 percent in the automotive industry and 4.5 percent in aerospace. Denis Branthonne, CEO of Singapore-based tech company Novade, which develops mobile technologies and software solutions to streamline construction processes, suggests that the industry's fragmentation and short-term, project-centered focus are largely responsible for its tardy embrace of digital tools. "The industry is fragmented. There are no leaders to impose standards. The supply chain is not stable. Everything is project based, and the horizon is only two to three years," he said. "Because of that, companies have not been in a position to invest in technology."

Sarah Hodges, director of construction business lines for AutoDesk, adds that razor-thin margins and other calls on contractors' resources are also to blame. "If you're a contractor, your margins are so thin," she said. "You're focused on your commitments and contracts to be on time, on budget, health and safety. All that mindshare and all the time that goes into managing all that, that leaves little time for innovation and investment, but we are seeing more contractors waking up to this notion. Larger companies are adopting these digital technologies and we are seeing more companies biting the bullet. They will have a massive influence on the supply chain."

Indeed, there has been a surge in new technologies aimed at the building and construction industry, including advanced computer-aided design (CAD) software; 3D, 4D, even 5D modeling (which captures material and labor costs and dynamically adjusts them as the design or schedule changes); 3D-printed building components that fit together at the job site; building information modeling (BIM) software that creates dynamic virtual environments in which dispersed teams can collaboratively modify plans; and augmented and virtual reality tools such as digital drawings.

All of these are supported by the ubiquity of cloud-connected tablets and smartphones that now have the power to allow users to access the tools from job sites. Indeed, the most notable changes happening with these tools, says Hodges, is where they're being used and by whom. "Historically, they've been used in the office by engineers and architects," she said. "Now they're being used in the field. It makes construction more model based. It makes construction more productive, more like manufacturing."

Branthonne agrees that the construction industry will change when it starts to perform more like the manufacturing industry, and key to that transition, he said, is supply chain. "It was changes in the manufacturing supply chain that revolutionized manufacturing," he said. In 2001, when Branthonne first began to work with construction industry clients, he was surprised by the stark contrast between manufacturing and construction. "I was absolutely shocked at just how different it was from manufacturing," he said. "That was puzzling to me that it was still using paper and 2D and spreadsheets."

But that's changing, as technology prices have tumbled and cloud computing and mobile communications have exploded. …

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