3 reasons why the moment is ripe for digital disruption
- The market size opportunity is huge and global. The global engineering and construction (E&C) industry is overflowing with revenue potential. In fact, E&C is slated to become a $17.5 trillion business by 2030. However, through their failure to optimize project portfolios and streamline delivery techniques, global firms leave more than $1 trillion on the table each year, according to McKinsey.
- Project delivery is becoming increasingly complex. Projects are either mega, distributed globally, compressed, or involve a growing number of parties. This requires us to manage projects in new and innovative ways. That said, according to a recent McKinsey study, the IT spend in construction is less than 1%; second to only hunting and fishing.
- We’ve reached the perfect storm in tech disruption. We can leverage cloud, mobility, artificial intelligence (AI), building information modelling (BIM), virtual reality (VR), machine learning, etc., to solve these problems. We have a global opportunity to change the face of construction.
Now is the time for bold changes in construction
Traditionally, construction has lagged behind the manufacturing industry in terms of innovation. Manufacturing have distinguished themselves from other industries by digitizing and standardizing their processes, reducing waste, and controlling their environment to ensure increases in quality and safety. Because of these technological advances, manufacturing growth and opportunity have jumped ahead of the global economy, while the construction market trails behind.
Many people think standardization equates to lower quality goods, such as prefab, or less options to choose from. However, process standardizations does not mean less choice for consumers or less product output. Because manufacturing has invested in technology and processes, there are more options in consumer goods than ever before. The industry has relied on standardization to progressively become better. This “continual improvement loop” is a key component to standardization.
Moving ahead: Machine learning, standardization, and continuous improvement
Many people in the industry are leaders in their profession. For example, experienced project managers at the top of their game know how to avoid certain pitfalls. However, they’re relying on their intuition – another word for “experience”—that you can’t quite put your finger on. Historically, the next generation of project managers will make the same mistakes on their path to developing the same level of experience as their predecessors. The industry has come to accept that errors will continue to happen, but, that shouldn’t be the case. We should be leveraging all of this learning, so that when new people enter the industry, they aren’t making the same mistakes.
We must leverage new technologies – AI, BIM, VR, machine learning, etc. – to continually innovate and boost humans’ effectiveness. These technologies will help us standardize, improve quality, build safer environments, and develop repeatable processes. We rely on these machines to help us comprehend the streams of information flowing from projects and systems. If we can’t digest this influx of data, we can’t improve our processes.
In addition, humans should be doing the higher-level jobs and focus on safety and quality instead of focusing on administration and mundane tasks. We should be looking for ways to improve instead of grappling to make sense of information and data entry. Machines should be doing this for us –the number crunching and hard work – so that we can lift ourselves up and focus on innovation and change management.
