The Potential for Digitalization in Construction

The emergence of construction technology has sparked an overdue, industrywide revolution. As technology companies attempt to capitalize on the unspoiled market, the industry is becoming infiltrated with a slew of enticing new options. Innovative project management and scheduling software, building information modeling (BIM), lean tools, value stream mapping (VSM) and 3-D printing are flooding the market. These solutions present enormous efficiency opportunities to an industry that has suffered a productivity decline of 19 percent over the last half century.

However, realizing the full potential of industry digitalization requires companies to go beyond the nuts and bolts of day-to-day construction operations. Long-term success demands the complete marriage of technology and strategy. It entails an innovative approach to one of the oldest industries on earth.

Merge Strategy & Technology

Too often, strategy and technology operate in organizational siloes. For example, one company had an outdated project management and accounting system that was understood and operated by only two employees in the information technology (IT) department. The information bottleneck not only presented an internal threat to the company due to the heavy reliance on a few individuals; but it also prevented the company from establishing a modern strategy. The company failed to merge innovation efforts with its overarching plan, which kept it from being as efficient and cohesive as possible. Employees failed to understand how systems were supporting the organizational vision and how technology was propelling the company toward better serving the customer and reducing the company’s overall cost structure.

As stated by Brendan Adams, vice president of operations at 8020 Builders, a Denver-based general contractor, “People are attracted to shiny objects. The key to executing a strategy is to make objectives clear.” Adams describes the temptation to adopt a slew of different “best-in-show” tech options as they emerge in the market, but states that “after clarifying [8020’s] strategy, it became obvious that what we needed was to focus on the technologies that would enable us to solve the problems of our customers.” Strategic transformation must be underpinned by organizational innovation. The two ideas should work in tandem, or they will begin to compete with one another. Successful initiatives begin by evaluating how the technology will impact the strategy. This first requires the company to define its strategy.

Where does the company want to go, how will it differentiate itself and how will it build in adaptability to sustain a competitive advantage? It is paramount to your success to craft a solid strategy for onboarding a solution before you ever begin the implementation process.

Evaluate Critical Tradeoffs

Next, a company must assess the viable technology solutions and understand exactly how each option supports the strategy. Technology implementation is neither cheap nor easy. Too much adoption at once will overburden systems, confuse employees and result in inefficiency. Every company must articulate how each technology option will impact the business and establish a step-by-step plan that coincides with the strategy.

Many companies have attempted to integrate lean construction principles without investing in the proper technology. These companies’ competitive advantage relied on achieving an advantageous cost structure through minimizing waste and maximizing value. However, management failed to implement the appropriate tools to execute such a plan. By integrating lean technologies, such as a last planner device, the company could have optimized pull planning to reduce process redundancy.

Other companies have effectively aligned innovation with strategy. Layton Construction focuses on healthcare construction. Due to the liability and complexity involved in healthcare projects, the company has effectively implemented technologies to improve safety and quality. Steve Serra, superintendent of Layton Construction, said the company’s integration of BIM360 has vastly reduced mistakes in the field.

Another example of this is a firm that planned to expand geographically in the next year. The company determined to implement and train employees on new project management software anticipating territory growth.

As the company migrated to the new location, current employees were comfortable with the systems and processes in place and were able to coach new hires effectively. It optimized its processes, such as RFI submittals, and enhanced communication at its core. The company was able to seamlessly transition into a new stage of technology adoption and strategy by blending the two business functions.

Effective Implementation

Bringing in key players who understand the business and will be responsible for using the software is crucial. Let’s return to the example of the company with the alienated IT department.

The project management capabilities were put into the hands of two people whom had never even been to a jobsite. Since the success of implementation will be largely determined by the key users of the technology, it is important that management understands the perspectives of different company players. The technology functions for each group must be related to each individual’s operations and the strategy at large.

Onboarding a new system requires employees to change their ways of thinking and processes that are often engrained over time. Introducing technology as more than a technical platform will incite organization-wide acceptance of the solution.

The supportive reaction will motivate employees to get the most out of the technology and the company to advance its strategic objectives.

Successful implementation of any change to a company involves careful planning and a focus on complete employee adoption. Evaluating your company’s specific needs prior to choosing a project management solution, as well as getting extensive employee input from every department of your company will set you up for a smooth transition.