New technology within the construction sector remains a quagmire for companies, offering considerable disruptive potential as well as risks related to increasing complexity. A new survey highlights that mid-sized companies are leading the industry in adoption, while around 20% of companies surveyed are aggressively investing in innovation with good results.
Technologies affecting the construction sector are on the rise, as innovation adds additional tools to monitor construction and inspection of infrastructure, while process and workflow technologies are being developed to transform the management side of the construction sector.
To explore in how far technology has penetrated the heart of construction, KPMG conducted a study (‘Global Construction Survey 2016: Building a technology advantage’) among around 220 senior executives in the industry.
The report notes that a range of technologies are currently being used across the lifecycle of projects. These include drones for monitoring and simulation for the design and construction phase; equipment/material connectivity and tracking for the construction phase; automated technology for the construction phase; mobile technologies, platforms and reporting for the construction and operations phase; project information encryption for the whole project cycle; integrated real-time and analytics across the whole lifecycle; building and information modelling across the whole lifecycle; and 3D printing.
According to the firm’s analysis, these technologies provide – in certain contexts – a range of benefits, from decreased costs and project transparency to improved productivity and efficiency through fault detection, remote monitoring and automated trucking.
Industry leaders are faced with difficulties, however, as the volume of projects increases, 55% of respondents say that they are increasing, and as the complexity of projects increases – with new building techniques, materials and designs – so do the risks. 78% of contractors say that risks are on the rise, while 41% of owners say they are on the rise. Technology itself, however, to the lament of several executives, creates additional risks, summed up by one executive as, “Is technology a solution or a problem in and of itself? It is a challenge on its own.”
Respondents were asked to describe in how far they are leveraging current technologies. The survey highlights that, across company size, there is considerable variation in uptake. Cutting edge visionaries, who score above 70% adoption on the survey, are the most highly represented in companies with revenues of $1-5 billion, at 14%. Large companies, those with $20 billion or more in revenues, have a relatively low level of cutting-edge visionary companies, at 7%, but a large cohort of industry leaders, at 46%. Small companies, with revenues of less than a billion, are the most likely to be behind the curve, at 43%.
The difference in adoption, according to the firm, is the result of a host of factors, from lacking in funding for small players, to mid-sized companies seeking to boost their competitive advantage by investing in new technologies.
The need to leverage new technology to ‘disrupt’ current practices differs across the companies surveyed – some are jumping onboard, while others are waiting to see whether the ship is seaworthy. Of owner respondents, 19% say that they are aggressively innovating and have had good results. For contractors this comes in at 24%, while 45% of owners, and 38% of contractors, say that they are innovating in a few areas with positive results. 10% of owners believe that they need to innovate to remain competitive, while 15% of owners say that they are starting to innovate on a trial basis. 11% owners says that their current business model is sound and already includes leading practices.
Getting the most out of technology remains problematic, according to the report. One area in which technology has been touted to improve outcomes, is operations. Running large, complex projects creates considerable planning, resourcing and scheduling difficulties for management. Technology, particularly data collection and analytics combined with various operation requirements, has the potential to leverage broad data streams to deliver forecasts for resource requirements and staff deployment.
Difficulties are abound, however; and, according to the firm’s analysis, the complexity of systems, coupled with insufficient resources and fragmentation of data, is making it difficult for project leaders to leverage the data they have collected for actionable insights. Around a quarter of respondents say that they are able to obtain fully integrated project overviews in real-time at the push of a button, while 49% of owners and 33% of contractors have to use multiple software systems that need to be manually monitored from which to derive insights.
The firm concludes, “Technology plays an integral part in helping the industry realise these goals by enabling enhanced design, planning and construction. When applied effectively, technology can significantly boost a sector that for many years failed to improve productivity. Yet, despite substantial investments in innovation, the construction industry is struggling to reap the full benefits of advanced data and analytics, drones, automation and robotics.”