The Next Phase of the Digital Transformation of the Construction Industry

By Stephen Jones, Senior Director, Industry Insights Research at Dodge Data & Analytics

Stephen Jones, Senior Director, Industry Insights Research at Dodge Data & Analytics
Stephen Jones, Senior Director, Industry Insights Research at Dodge Data & Analytics
I have been in the design and construction industry for almost 50 years, and since 2006 I have been producing a series of free research studies on global construction technology at Dodge Data & Analytics. From my vantage point, I think we’re about half way through what will be looked back on as about a 30-year technology-driven transformation of the entire global design, construction and built-asset management industry, from AI-enhanced design to extensive industrialization of the build process to digital twins for ongoing operation. I tell everyone (especially younger folks) that this is THE best time to be in this industry, ever.
The goal is an environment where digital information is a utility, like water from a faucet or electricity from an outlet. You can pretty much take for granted it will be flowing, with adequate volume and reliable quality, providing relevant benefits for everyone. Of course, we aren’t there yet, so our research is constantly assessing where various segments of the industry and regions of the world are in their relative transformation journeys. Our approach with any trend is to quantify exactly what the best users are doing with various tools or practices, what tangible, scalable, repeatable benefits those activities are providing, and what is needed for continuing advancement. We also study how they make decisions about technology and the policies they put in place to optimize its success.
I think we’re entering an exciting new phase of this transformation. Until recently, most construction companies looked at their organizations as somewhat fixed entities, into which they were selectively inserting technology to solve specific problems, enhance selected workflows and improve particular outcomes tightly related to cost, schedule, productivity, safety, or other relatively tangible metrics. It has not been a holistic re-invention of how the whole ecosystem operates. Its been much more inward-looking, essentially creating silos of excellence. We were not leveraging technology to advance the whole industry.
But as construction technology evolved from a myriad of point solutions towards more collaborative platform-based solutions, companies began to see that if everyone on a project could operate at a certain level of digital capability, then they all benefitted exponentially. It amplified the positive impact of each company’s technology investments without requiring more resources. In fact, it began to demonstrate that a tech-forward project team could do more with less.
This growing awareness has led us to this next phase where companies are willing to re-examine everything about how they do their work. Entire companies are “going digital” where technology isn’t applied like band-aids to persistent wounds while trying to minimize disruption to conventional practices. Instead it forms the fundamental foundation of who the company is and how it operates. Construction technology is so ubiquitous that it becomes invisible. Its benefits are baked in and create a powerful competitive advantage, both in project delivery and the ongoing war to attract and retain the best talent.
And this has spread to entire project teams who now collaborate to determine who should do something, not just default to who always used to do it. Team-oriented innovations like lean construction and integrated forms of agreement legislate productive transparency and cooperative work plans, all of which can now be effectively supported with a wide variety of interoperable technology solutions.
So, how does a successful company that has reached that position by traditional methods, evolve to become a truly digital enterprise without risking losing what it is that made them successful in the first place? Or how does a company that already considers itself pretty tech-savvy stay at the leading edge? From my perspective, the answer is profoundly simple yet often overlooked in the rush to chase the next shiny object that appears on the construction technology horizon. Construction is a people business, and “going digital” is 10% technology and 90% sociology. You can’t just buy (or license) your way to a comprehensive digital transformation. You have to develop digital DNA in your organization, and that can only be done with its people. If given the chance, your people and your key partners and clients will lead the way.
For example, if your company is a General Contractor, when is the last time you asked 10 of your best trade contractors how your company can do a better job leading projects, coordinating all their work and making them more successful? There will be plenty of tech opportunities uncovered in those discussions but in the enlightened context of how they will support improved processes from the bottom up. Top-down tech implementations were a necessary phase to establish proof-of-concept and get people past any initial phobia that new tech would make their jobs more complicated. But to drive out remaining ambivalence it is critical to engage the ground-level users in discussions about process, not tech. People don’t come to work to use tech. They come to work to complete projects. And have these conversations with your whole project ecosystem i.e. staff, partners, clients, suppliers and any other stakeholders where information exchange is critical.
And if it turns out that Artificial Intelligence or Virtual Reality or drones with LIDAR will help, then go ahead, but not just because it’s the cool new thing. Do it because it effectively addresses bottom-up needs. And people will embrace it with open arms. That’s a hallmark of a truly digital organization, not one that just dresses up like it.
I realize it may sound counter-intuitive that the next wave of the tech revolution isn’t really about tech. But remember, the best tech is beyond “user-friendly”, it’s totally invisible because it applies so perfectly to the job it supports. Commit your organization to letting people lead and your digital future will be bright.