Digitization-Much more than Just Fancy Technology
Digitization is undoubtedly a mega-trend that is shaping industries. Media and music industry are two examples where transformation is already very much advanced, having nowadays completely new business models and market players. 25 years ago, who would have imagined how drastically the way we are enjoying music will change? First, with a change of the physical medium: from record disks to compact disk. Later, making the physical medium obsolete and allowing buying music as a file from the internet, e.g. using iTunes. Today, we are not buying music anymore; we are using services like Spotify and have access to any kind of music for a monthly fee without buying a specific song or album.
"Two further technologies with the potential to shape the processes in the construction industry are wearables like glasses or watches and augmented reality"
The construction industry, however, is for various reasons still in the early stages of digitization. This means that a huge potential is still waiting to be exploited and leveraged. We can see in other industries that changes could be quite fast and disruptive with new market entrants as well as long-established players leaving the scene.
Technology will play a major role in this transformation, but only where it helps to create superior value e.g. by solving existing challenges in a new, more efficient way or even enabling completely new business models.
One key challenge in the construction business is from a general contractor perspective to bring together several specialized crafts to perform tasks that are highly interdependent. And from a perspective of a specialized craft, e.g. for elevator and escalator installation, it is the challenge to manage the workforce to perform tasks for different customers on different construction sites on-time, in-quality and in-budget.
Traditionally, such a coordinating role, at Schindler named “new installation superintendent” was carrying tons of paper such as dispo drawings, milestone and resource plans in the rear trunk of his car, ready to answer any question the general contractor or other involved crafts may have. For this, he prepared himself in the office with the right paperwork and returned to the office to follow-up and complete tasks that arose on a customer site, e.g. changing milestone planning, offer additional services or officially informing the customer of work impediments that need to be solved in order to start or continue installations. Not having all necessary information at ones fingertips when needed and not being able to perform the required actions immediately is however causing high inefficiencies in construction processes.
This is where new technologies are enabling different approaches in the era of digitization. Currently the most important ones are mobility, Internet of Things (IoT), and big data.
Mobile technology allows making information available not only on backend systems in the back offices of headquarters or branch offices, but wherever needed.
Schindler used this technology to make its new installation superintendents more efficient. Via iPad they now have real-time and full access to all Schindler systems while on the road, allowing milestone and activity management and accessing all necessary information like dispo drawings as well as immediate creation of customer letters based on electronic checklists. A state-of–the-art user interface design aggregates information to the point (e.g. indicating delays with a traffic light concept) and allows easy triggering of necessary actions. Since all topics can be closed directly at the customer’s site, superintendents report significant time savings for administrative tasks and travel time as well as a significant reduction of overdue activities.
Internet of Things technology is allowing even further potentials. Every physical object can now be smart and connected to the company backend system as well as to other physical objects. A use-case with high potential is the life-cycle management for parts, especially for those with safety relevance, from the creation in a manufacturing plant over the logistics chain to the construction site over the installation and initial commissioning until the replacement. Unlike the contemporary use of bar codes and QR-codes, sensor technology such as RFID or iBeacons allows on top e.g. the gapless localization of objects, checking if a part was exposed to conditions that may impact its operability (e.g. falling, extreme temperatures, humidity) as well as the recognition of counterfeits.
The possibility to collect with every smart physical object a variety of environmental data leads to insights beyond traditional capabilities. This is especially true for the service of facilities being put into operations. For example, “smart” elevators and escalators constantly collect sensor data and send them over the Internet of Things to the Schindler backend systems. These manifolds of data, “big data”, are processed in a Business Rules Engine which creates maintenance alerts long before an actual breakdown. These alerts and repair hints are then dispatched in real-time to the service technician.
Two further technologies with the potential to shape the processes in the construction industry are wearables like glasses or watches and augmented reality. Although Google glasses did not kick in yet, we at Schindler still believe that in future protective glasses for installation workers, technicians and so on will be used to display additional information, e.g. which screw to fasten in which sequence. Enriching the visual field with context related information on how to perform specific tasks will among others increase safety and reduce training requirements and efforts.
Having outlined potentials of new technologies for digitization of business in the construction industry, the question still remains where to start and how to lead the digital transformation journey.
There is no off-the-shelf transformation program. On the contrary, digitization has to be embedded in the business strategy of a company and be aligned with the vision how the company will serve customers and earn money in the future. Therefore, digitization is not about technology.
Especially in large traditional enterprises it is absolutely necessary to create a two-speed environment, where besides the traditional operations new ideas can be explored in a start-up-like spirit and tested fast with agile development methods. At Schindler, our Global CIO Michael Nilles decided therefore to establish the ‘Schindler Digital Business’ unit in order to drive innovation within the group.