The Digital Transformation of the Construction Industry

Paul Doherty, President and CEO, The Digit Group

Being a licensed architect (a real one, not a software architect) and a builder that owns a real estate development company, I am always looking for ways to improve my company’s efficiency and effectiveness.  The sooner I can hand over a quality building to an owner, the more money I make.  Attempting to implement digital solutions to accomplish this for over 30 years in a very conservative and slow-moving industry like construction has been amazingly painful.  Construction is one of the world’s largest industries, comprising architecture, engineering, sub-contractors, general contractors and building product manufacturers, with a current US$7 trillion worldwide market (US$1.3 trillion US market) and an anticipated US10.7 trillion market by 2023.

Being a historically cyclical market, adoption of technology has been poor due to:

• Very low investment in research and development (R&D)
• Low profit margins, limiting resources for R&D
• In good economic times, no time to conduct R&D
• In bad economic times, no money or proper personnel to conduct R&D
• Construction being ignored by most IT and Innovation companies

The treadmill of worldwide industry inefficiency and ineffectiveness is being disrupted by a convergence of internal and external changes in the industry. 

  The treadmill of worldwide industry inefficiency and ineffectiveness is being disrupted by a convergence of internal and external changes in the industry  

Internal Disruptors

• Lack of Construction Workers: Due to the 2008-2010 worldwide economic recessions, the construction industry lost an entire generation of workers entering the industry.  This has put the industry today in a bad position of having to deliver projects with fewer workers. This driver alone is the main reason for the quick adoption of IT in the industry. Do more with less.

• Emergence of a New Construction Professional: The companies in the industry that are meeting the market demand for delivering quality and complex projects have employed a new generation professional called Virtual Design and Construction (VDC). The enormous impact on cost savings, sustainable analytics and reporting for the environment, and overall process improvement makes any VDC professional worth every penny spent.

• Building Information Modeling (BIM):  Moving the communication of the design intent to onsite construction has been an issue since the time of the Egyptian Pyramids.   For thousands of years, the design intent was communicated in the form of a 2-dimensional document (a sketch in the sand or papyrus, an artist’s sketch on paper, blueprints). Today’s projects use a 3-dimensional tool called BIM, to communicate design intent in a form of data. This allows all stakeholders on a construction project to share and pass along work performed in a disciplined and organized manner, providing fewer mistakes and increasing profits.

• Virtual/Augmented/Mixed Reality Solutions: The VR/AR/MR solutions that are being used by the Sub-Contractors in the United States are breathtaking. Mostly being utilized and educated by the Sub-Trade Unions, VR/AR/MR technologies are enabling the fabrication, construction, and delivery of numerous trades work without the use of traditional tools (no blueprints, no measuring tape, no levels) and in most instances, with less workers in up to 40% less time.

• Industrialization (Pre-Fabrication, Panelization, and Robotics):  Documented process workflows, machine learning and improved factory produced Computer Numeric Control (CNC) machine outputs are providing the construction industry one solution to the lack of talent and the market need of a quality delivered building.  Katerra, Concept Modular and Aditazz are leading this sector of the market.

External Disruptors

• Good Global Economy: Clients are demanding more complex projects in less time while expecting a low increase in cost. With the internal disruptor of not having enough people to deliver these projects, IT innovation is looked upon as one of the major solutions.

• IT Companies Entering the Construction Market: Oracle has been acquiring construction related companies at an impressive pace, while Facebook and Google have invested in pre-fabrication plants to deliver affordable housing for its employees in Silicon Valley.  IT companies are not confined to a singular industry anymore, but they are influential and are taking charge in the construction industry.

• Autonomous Vehicles, Big Data, Internet of Things (IoT) and Blockchain:  Construction industry data, in the form of BIM, will enable a safe, secure and higher quality of life for people around the world. The ability for BIM to act as the Digital DNA and emerge as the geospatial Digital Twin for that community is a Game Changer in how the IT and Construction industries collide.

• The Financial Industry Discovering the Construction Industry: The volume of mergers and acquisitions (M&A) in the Construction Technology space is at historic heights.  The financial industry is taking a hard look at how automation, in a historically physical industry like construction, can improve on market demands.

• The Cyber-Physical Relationship: The Construction industry authors the Digital DNA of the built environment every day. Using BIM in a gaming environment like TDG’s ORBIÒ provides a multi-BIM digital twin environment as a geospatial tool to place urban assets, like buildings, into a gaming platform. Smart Cities Apps are developed from this platform, creating a Cyber-Physical relationship.

There has never been a better time to be involved with the Construction Industry.  It is an enormous, worldwide industry with a tremendous amount of needs that require automation on a massive scale, just to meet today’s demands. As the industry’s requirements scale to meet the future demands of the market, new IT solutions will be required, and new fortunes will be made to meet our industries future demands. This is a “Call to Arms” to the IT professionals of the world. We need your assistance to digitize one of the world’s largest industries. Are you up to the challenge?