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//Digital transformation in the construction industry: is an AI revolution on the way?

Digital transformation in the construction industry: is an AI revolution on the way?

2019-07-18T14:21:38+00:00 July 18th, 2019|News|

Publication: Information Age

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Whilst digital technology has transformed everything from hospitality and banking, to healthcare and e-commerce, the UK’s construction industry has been slow to adopt this change. But is an AI revolution on the way?

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The majority of industries have begun their digital transformation journeys. Digital transformation in the construction industry, however, has been slow. Perhaps, this failure to adopt digital technology has been based on a systemic resistance to change?

Indeed, this desire to adopt new technology is being hindered by almost all construction organisations overlook the importance of a technology partner in enabling training and up-skilling, according to a new report by Zen Internet. It found that, as is so often the case with traditional industries, culture is a significant barrier to embracing this necessary change.

Despite this, it appears that there is a willingness to embrace the digital future in this industry and the report reveals that digital transformation has now laid its foundations firmly within the construction industry, with many organisations already working with new technologies such as AI.

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• More than half (55%) of large construction firms (over 250 employees) and a third (28%) of smaller organisations (under 250 employees) are already using artificial intelligence.
• Over half (51%) of construction firms surveyed see cultural change as a barrier when implementing a digital transformation project.
• Almost all (86%) construction firms surveyed overlook the importance of a technology partner.

There is an appetite to change, with the construction industry looking at a range of technologies, on top of AI, that could help them in the future, with virtual reality (28%), cloud computing (24%), software defined networking (20%), blockchain (19%) and Internet of Things (17%) all seen as key to future development by those in larger organisations.

According to Tech Nation’s 2018 report, technology is expanding 2.6 times faster than the rest of the UK economy, and yet the construction industry has been slow to implement digitalisation strategies that could bring increased efficiency and collaboration as well as reduced costs.

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We only have to look to Mark Farmer’s landmark 2016 report, ‘Modernise or Die’, which warned that failure to innovate poses a serious threat to the UK construction sector.

This was recognised by the Construction Leadership Council, which published its construction sector deal with a focus on transforming the industry through a ‘bytes and mortar’ approach to smart construction.

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Culture change: the biggest barrier

Zen’s report suggests that digital transformation appears to be a strategic priority for the leaders of construction firms, with CEOs (52%), CIOs and CTOs (32%) amongst the biggest drivers of such projects.

This top down approach, crucial for driving change in any business or industry, is still not having the desired results. Cultural change (51%) is cited as one of the biggest challenges to implementing a digital transformation project, highlighting the need to get company-wide buy-in. Nearly all (89%) companies surveyed, who claimed to have already completed a digital transformation project, note that cultural changes are needed from within to make it a success. According to the report, overcoming cultural resistance is only topped by the importance of communicating the value of digital transformation to key stakeholders and investors (62%).

James Albiges, general manager — Network and Communications at Zen, commented: “Initiatives such as training and up-skilling will help tackle cultural change from within a business. This coupled with clear objectives and a formulated strategy will go a long way in making your digital transformation project a success.”

Failed projects can cost an average of $655,000 to the bottom line, yet despite this, almost all (86%) construction organisations surveyed overlook the importance of a good technology partner as an enabler of an effective digital transformation.

Digital transformation: it’s a no brainer

The majority of the construction firms surveyed said they have either completed a digital transformation project or have one currently underway — over half (61%) noted improved efficiency and reduced operational costs (58%) as direct advantages. On top of this, following the initial investment, two-thirds (66%) of companies noted a subsequent reduction in costs as a result of the new technology deployed and a third (33%) reported an increase in sales.

The benefits of implementing a digital transformation project can also go beyond the organisation itself, with half of respondents claiming it has enabled increased collaboration within the ecosystem, stemming from streamlined communication and networking — the report concludes that when progressive technology is fully embraced, a more streamlined approach to conducting business across the supply chain can be achieved.

“It’s fair to say that the construction sector has traditionally been slow to adopt change, but things have clearly moved forward in recent years, with digital transformation now a key consideration for the sector,” said Albiges.

“But it is important to note that a digital transformation is not just a means to an end. It’s an ever-evolving process to deliver profound change, fundamentally altering much of the world around us. It is important for construction organisations of all shapes and sizes to understand what digital transformation is, and how a business can benefit from it. There’s no one size fits all approach and there are different solutions for different business needs. With the amount of technologies and number of vendors to choose from, knowing where to start can be a real challenge. That’s why it can help to find a provider that will put your organisation’s success top of the agenda and one that has the right expertise and experience in delivering successful digital transformation projects within the construction industry.”

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