How Digital Transformation has Changed in the Past Year in Construction

April 24, 2019

MIchael Kelley

The construction industry has been somewhat slow in adopting digitalization. For a massive enterprise that is keeping CEOs sleepless at night due to the safety risk costs of construction projects, adopting a cluster of disruptive technologies normally takes longer.

Deloitte has aptly named the industry “the case of complex disruption.” This is because not one single technology is responsible for the digital transformation in the construction industry. Rather, it is a confluence of a number of factors that are transforming some of the biggest problems of construction companies, including unproductive sites, time management, safety, staff acquisition, and costs of project management. Additionally, Ernst & Young reports that digital is specific to each company. But there are still general trends that have moved construction companies forward to welcoming digital transformation, many of which are strategic, and some of which focus on practical digital tools and systems.

Facing the Current Challenges

The construction industry shares common concerns with other major digital adopters, for instance, cybersecurity risks, and are therefore rightfully concerned to take caution action steps only after completing a diligent digital transformation process. Certain construction company cases that have embraced AI, automation, autonomous vehicles, sensors, thermal imaging, and digital twin technologies have changed their workflows over the past few years with self-driving trucks, digital code compliance audits, 3D modeling, IoT performance compliance, and remote collaboration apps for construction sites.

Overall, construction companies have one big goal in mind: higher productivity, which could produce gains as high as $1.6 trillion, according to a 2017 McKinsey report. What are the areas in the construction that are most susceptive to becoming more productive? Changing regulations and contracts, rethinking design, better onsite execution, and retraining workers are all major areas that could be digitally transformed. How far have these gone in the past year?

Recent Digital Transformation Trends in Construction

Newer research done by McKinsey brought to light several valuable insights, some of which we will explore next, along with digital transformation examples from other companies that are reshaping the construction industry from a flat underdeveloped field to powerful aggregates of data, skills, and science.

Solutions emerging from successful use cases, including 3D printing, robotics, drones, modularization, digital twins, AI and analytics, and supply chain optimization are applied to the three layers of executing construction projects – onsite, in-office, and via digital collaboration platforms. For example, drones are being used for site inspection and to locate potential hazards, to track progress by taking photos or to execute riskier undertakings on bridges or buildings. Robots can perform brick and mortar tasks faster than humans and don’t need to take breaks. In general, there is less repetitive simple labor for humans.
Artificial intelligence is applied across the construction cycle, from pre-construction to operation and maintenance, in particular together with computer vision to capture reality or to support digital twin models, as well as to optimize sequence tasks and blueprint divergences.
Autonomous construction equipment, similarly to self-driving trucks, reduces the need for workforce and solves the skills shortage in construction engineering by performing onsite excavation and grading completed by computerized machines. Autonomous construction machinery uses sensors and GPS to move across the construction site with precision and complete site work based on 3D models.
Supply chain management in the construction industry is augmented by better software solutions for hiring workers and procurement of equipment and materials. By matching supply with demand, construction companies have the chance to optimize the supply chain and increase overall productivity, as well as to improve the transparency of competitive bidding.
Collaboration between job sites and offices is made easier with mobile apps that enable real-time communication, simultaneous note taking and adding, and amending drawings and RFI templates. Building Information Modeling (BIM) is a technique for digital representation of building in 3D models that enables implementing changes in real time by all stakeholders. Combined with virtual reality (VR) and augmented reality (AR), BIM can create a virtual construction overlay to simulate the real construction environment.

The digital transformation in the construction industry is not yet fully underway, but it’s inevitably progressing towards digitalization across the organization on an enterprise level, backend systems included, with solutions such as expense tracking and recording transactions on the blockchain. Innovation will be a major breakthrough for construction companies of the future and those that don’t keep up with the lifecycles of innovative technologies and fail to respond to the digital transformation pressure may need to face becoming history.