Re-thinking Construction with Digital Transformation in 2024

The construction industry is one of the largest industries in the world, with global annual spending on goods and services of over $11 Trillion in 2019, and is expected to grow by 3 percent per year. However, according to a study, it is still one of the least digitized sectors.

Construction companies are now becoming more aware of the potential and plan to invest more in digital technologies. As a result, the digital technologies market in the construction sector or construction 4.0 market is projected to increase by around $29 Billion by 2027.

What does digital transformation mean for the construction sector?

For construction, 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.

What are the benefits of digital transformation in the construction sector?

The construction sector can benefit from digital technologies in the following ways:

1. Increased productivity

A study by McKinsey 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 planning, designing, 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 tasks. 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.

What are the challenges?

Since the past few years, digital transformation in the construction sector has been slow. 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, in this case, becomes a challenge because often, the contracts are short, and there is a misalignment in the motivation of both parties. Additionally, the cost can also be a factor since suppliers often work on small margins and can not spare the cost of 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 it challenging to implement expensive digital technologies and tailor-fit 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 for recording data by subcontractors and vendors.

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. It can also be hard to train the workers to use new digital technologies.

Recommendations

We recommend leveraging low/no-code software to make it easier for your workforce to transition from manual to digital solutions. Offer adequate digital training to retain the employees.

What are some key technologies that enable digital transformation in the construction sector?

• 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.

• Artificial intelligence technology can be used to make better building designs to 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 notify critical issues.

• Through the internet of things (IoT), smart machinery can maintain itself. 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.

• Building information modeling (BIM) is an intelligent modeling tool that can help review the project in real time and help 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.

• Augmented reality (AR) and virtual reality (VR) technologies can enable fast and accurate simulation for architectural and structural planning.
• It can also help in risk mitigation for a construction process.

• Cloud technology can help better manage and store operational data 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.

What are some case studies of digital transformation in the construction sector?

The following table presents some case studies of digital technologies being implemented in the construction industry:

Further reading:

To accelerate your digital transformation process, check out:

• Digital Transformation Frameworks from Top Consulting Firms
• Top 7 Digital Transformation Best Practices for the Organizations
• Digital Transformation in different sectors
• Digital Transformation Case Studies and Success Stories

You can also check our sortable/filterable list of digital transformation consulting companies to find the fit that best suits your business needs.

If you have questions about digital transformation in construction, let us know: