The construction industry is one of the largest sectors globally, with annual spending on goods and services reaching into the trillions. Despite its vast scale, this industry remains one of the least digitized.
Construction companies are now becoming more aware of the potential and plan to invest more in their digital transformation (DX) efforts. As a result, the digital technologies market in the construction sector, or the construction 4.0 market, is projected to increase by around $29 billion by 2027.1
What does DX mean for the construction sector?
For the construction sector, digital transformation means harnessing the power of digital technologies to make operations more efficient, productive, and safe. Digital technologies can be introduced both at the management level of construction organizations and the field level of construction sites.
Benefits of DX in construction
The construction sector can benefit from digital technologies in the following ways:
1. Increased productivity
A McKinsey study stated that the global productivity growth of the construction sector averaged 1% a year over the past two decades, which is significantly lower than other sectors. Digital technologies can help improve productivity by optimizing the planning, design, and management of the building environment and other construction operations.
2. Increased safety and risk mitigation
Various risks are involved in a construction project, and digital technologies can help mitigate those risks. For example, by using high-tech devices such as laser scanners or laser distance meters, field workers can gather essential data without risking their lives.
3. High-quality building
Through digital technologies, human errors can be reduced in construction engineering and architecture tasks. It can help draft accurate designs and documents and improve the overall modeling of the building.
4. Improved collaboration
Digital transformation can also provide a shared data environment, improving collaboration between subcontractors and suppliers in a construction supply chain and speeding up the workflow.
DX challenges in construction & solutions
Digital transformation in the construction sector has been slow in the past few years. Digital transformation is not an easy task, and like every other industry, construction also faces many challenges that decelerate digitization in the sector. Some of these challenges are:
1. Lack of alignment
A construction company works with many small and medium-sized contractors and suppliers. Implementing digital technologies becomes a challenge in this case because often, the contracts are short, and there is a misalignment in the motivation of both parties. Additionally, cost can also be a factor since suppliers often work on small margins and can not afford expensive technologies.
Recommendations:
Working with digitally active suppliers has both short and long-term benefits. You can incorporate your long-term suppliers and vendors in your digital transformation journey. For short-term suppliers, it can be beneficial to incorporate digital requirements in the vendor selection process.
2. Unique projects
Often, unique construction projects require bespoke design and delivery approaches. This can make implementing expensive digital technologies challenging and tailor-fitting them to the project. However, this challenge does not apply to long-term projects, which last many years.
Recommendations:
To implement customizable and cost-effective digital solutions in your construction company, consider working with a service that provides the level of required customization. The current market offers a number of such digital solutions at competitive prices.
3. Poor data management
The construction sector has been poorly collecting and managing data for a while. According to a report, poor data strategies cost the global construction industry about $1.85 trillion in 2020. Since a large amount of data is required to implement any digital technology in a business, poor data management problems in the sector can become a barrier to implementing digital solutions.
Recommendations:
This issue can be resolved by implementing more digital data management methods at operational and management levels and integrating applications used by subcontractors and vendors to record data.
4. Worker training problem
Getting the employees or workers on board is crucial before implementing any technology in any business. Since the construction industry relies on an aging workforce, there is resistance to accepting new technologies. Training workers to use new digital technologies can also be hard.
Recommendations:
We recommend leveraging low/no-code software to help your workforce transition from manual to digital solutions. To retain employees, offer adequate digital training.
Key technologies enabling DX in construction
1. Large Language Models (LLMs) & Generative AI
Generative AI and LLMs like GPT-4 are transforming construction workflows by automating complex tasks and augmenting human decision-making:
- Generative design: AI creates optimized building designs (e.g., energy-efficient layouts, material usage) based on project goals, reducing planning time by 25%.
- Automated documentation: LLMs draft contracts, safety reports, and permits by analyzing project data and regulatory requirements.
- Risk prediction: GenAI analyzes historical accident data and weather patterns to flag high-risk scenarios before breaking ground.
- Real-time collaboration: NLP-powered tools translate multilingual team communications and summarize meeting notes to reduce delays.
- Predictive maintenance: LLMs interpret IoT sensor data to forecast equipment failures and recommend proactive repairs.
- Compliance automation: AI scans evolving building codes and updates project plans to ensure regulatory alignment.
2. Big data
- Historical big data can identify patterns and possibilities of risk, which can increase safety in a construction project.
- Big data can also be used to anticipate the weather, traffic, and the most optimal environment for increased project efficiency.
3. Artificial intelligence (AI)
- Artificial intelligence technology can be used to make better building designs and increase building lifetime.
- AI can also be used to automate repetitive tasks to increase productivity.
- Machine learning can be used to monitor work progress and help identify critical issues.
4. Internet of Things (IoT)
- Smart machinery can maintain itself through the Internet of Things (IoT). For example, a cement mixer can order cement automatically when it runs low.
- Geo-location can also be used to identify dangerous areas and notify workers before they enter them.
- IoT-enabled smart devices such as sensors and monitoring systems can be used to reduce waste on a construction site and reduce the overall carbon footprint.
5. Building information modeling (BIM)
- Building information modeling (BIM) is an intelligent modeling tool that can help review projects in real time and improve collaboration between engineers, architects, and other construction professionals.
- It supports the planning phase of the construction project to reduce clashes between different departments and human errors.
6. Augmented reality (AR) & Virtual reality (VR)
- Augmented reality (AR) and virtual reality (VR) technologies can enable fast and accurate architectural and structural planning simulation.
- It can also help mitigate risk during the construction process.
7. Mobile and cloud solution
- Cloud technology can help manage and store operational data better and significantly improve integration between subcontractors and suppliers across the construction value chain.
- It can also help reduce data gaps that cause problems while implementing new digital solutions.
Case studies of DX in construction
The following table presents some case studies of digital technologies being implemented in the construction industry:
| Type of project | Company | Business Function | Case Study | Result |
|---|---|---|---|---|
| Process improvement | Norway road network project (Connected 5 islands) | Construction project | • DCW 4D Mass Haul Earthworks Solution • Software to optimise digital workflow • Based on advanced data visualization and analytics • Project planning, simulation | • Reduce transportation planning and construction budgets by 20% • Increase productivity and reduce unnecessary work |
| Process improvement and innovation | Bechtel USA | Innovation process | • The Future Fund: A platform which helps implementation of innovative technology in the business. • Platform enables the employees, suppliers, and customer to create ideas for innovative improvements in the company. | • Successful implementation of thousands of digital solutions throughout the value chain |
| Process Improvement | TAV Airport Construction | Planning and Management | • Big Data: Built building information models and geographic information system with computerized maintenance management and building management systems towards Airport construction projects | • Improved asset and facilities management • Improved analytics, performance, and energy management |
FAQs
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What is construction digitization?
Construction digitization refers to the integration of advanced technologies like artificial intelligence and computer vision to enhance various aspects of the construction process. By utilizing computer vision models and machine learning models, construction projects can leverage image data and video data to monitor progress, detect anomalies, and ensure safety through applications such as object detection and image classification. Data collection and data preparation are critical, with high-quality labeled data and annotated data sets forming the backbone of training datasets. Tools for data annotation and creating synthetic data help develop robust computer vision algorithms that accurately reflect real-world data and desired objects. As models are trained using large datasets and supervised learning, they improve in performance, making tasks like facial recognition and image segmentation more efficient, ultimately driving the success of construction digitization projects.
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What is the digital construction process?
The digital construction process involves integrating advanced technologies like artificial intelligence and computer vision to improve efficiency and accuracy in construction projects. Utilizing computer vision models and machine learning models, this process leverages image data, video data, and other data sources to perform tasks such as object detection, image classification, and anomaly detection. Critical steps include data collection, data preparation, and data annotation to create high-quality training datasets. Tools for data labeling and creating synthetic data enhance the model training phase, allowing the trained models to recognize images, segment data, and monitor progress effectively. This approach ensures that the digital construction process accurately reflects real-world data and improves overall project performance and safety.
Further reading:
To accelerate your digital transformation process, check out:
- Digital Transformation Frameworks from Top Consulting Firms
- Digital Transformation Case Studies and Success Stories
If you have questions about digital transformation in construction, let us know:
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