A Digital Business Transformation Initiative in Construction Sector

Conducted by Biland Sadek, March 04, 2022

Published on LinkedIn on May 30, 2022

I started over 30 years ago as a specialty construction director for large projects in Saudi Arabia, Europe, and the USA. Through my involvement and project experience, I realized how disjointed the construction development industry is and that there is vast room for process improvement. As a result of my efforts to connect the dots and improve the project's delivery I was executing, my career evolved towards Innovation and Technology. As an executive internal consultant for major construction groups in Saudi Arabia, I led and orchestrated all aspects of their organizational and digital transformation programs to streamline AEC processes from planning, design, and construction into facility management and operations.

I recently founded "construct 360", a smart construction system approach that combines my hands-on industry experience with an external/interim consulting perspective that is time-saving and cost-effective. It focuses on leveraging my extensive industry practical knowledge to align organizational processes and systems seamlessly with smart construction principles to reduce project timelines and increase ROI.

I am passionate about developing the most suitable project execution strategies that innovatively leverage technology, processes, and industrialized construction. I help streamline the design/construction delivery process to achieve a digital handover of the Built Environment projects suitable for the owner's asset lifecycle management. In addition, I focus my leadership and orchestration capabilities on leading construction development companies' Digital Transformation Journey toward a streamlined and optimized future state.

One of my most relevant business transformation experiences I had to work on occurred in the form of a transformation initiative to achieve maximum control over a new Design-Build construction project constraint (time, quality, scope, cost, performance) [1] in the context of a mega rush project, managed in a complex corporate environment with high uncertainties. The initiative's mission was to establish a project governance system to maximize and optimize the integration of the involved entities to inspire future projects and become part of the company's organizational process assets through the initiative's success.

The company, a large construction conglomerate, was highly fragmented. There were separate BU's with different departments supported by separate systems for design, estimating, procurement, valuations, and construction planning. In many cases, even the planning process is carried out using a different method at the conceptual and design stage than the one used to manage the project during construction. As a result, receiving an accurate picture of the project from financial and operational perspectives was impossible.

The main transformation drivers were the urgent need to efficiently control the construction materials lifecycle (from conception through completion) at the company's new megaproject and respond to the increased pressure from clients to receive timely information about project deliverables and inventories and cost expenditures.

Since the construction business development phases, activities, and resources rotate around materials selection, design, and management, and to give a clear understanding of the scope of the transformation, I used an umbrella term familiar to all stakeholders, representing the initiative drivers "Project Material Management and Controls."

The transformation aims were to set the foundation to (1) Improve organization Project management maturity, (2) Adopt IPD Philosophies and practices, and (3) Embrace Construction Lean Principles: Customer focus, Culture and people, Workplace organization and standardization, Elimination of waste, Continuous improvement and built-in quality; knowing that a construction and development business success derives from the positive results of its projects portfolio execution and by linking corporate strategy to project operations.

The transformation initiative was built on the principles of continuous improvement. It considered the continuously changing project circumstances and the organization's readiness to change, reducing risks and providing flexibility in dealing with the project through its members' collaboration and active participation.

It was a sound and ambitious initiative aimed at attaining adequate control over construction development project constraints that materialized in a short time despite all foreseen obstacles.

I explored and analyzed the company's functional units to understand the organization's project delivery method and how these functional units interrelate and cooperate to meet their target. The implemented controls ensure the delivery within the constraints.

I also studied the organization's current business situation, heard the users' pain points, and identified key players, stakeholders, and internal and external factors that will affect the business's successful transformation.

This analysis provided essential information about the inputs and outputs of each functional unit and its members' leading roles and responsibilities. The study highlighted the main gaps in the existing management systems within the organization and their impacts on the level of control, transparency, and traceability of material throughout the project.

Moreover, this analysis showed a clear understanding of the steps needed for efficient Material Management, allowing effective Material Control throughout the project lifecycle.

The next step was to establish the foundation of the transformation journey:

1. Company insights and transformation plan
2. Obtain management commitment
3. Establish the delivery structure
4. Set up the unified data structure
5. Enable information integration
6. Build the management information system
7. Implement a collaboration and support portal

I delivered the transformation through an Agile delivery structure that involves people at all organizational levels and functional departments, and it is supported by external specialists when and where required. It is similar to a transformation office but much more flexible and attractive to users. Generally, I avoid using terms that large consultants use, and I prefer wordings that users recognize and understand, resulting from my analysis phase. 

All management decision-making related to the transformation initiative was channeled through a central group entity to ensure alignment, integrity, and subsequent integration with the value chain partners. The active participation of members of the leading group within the initiative's delivery structure provides the necessary support to avoid conflicts and discrepancies. The transformation initiative required that the Higher Management lead the group meetings and calls for such meetings regularly to discuss or instruct on matters related to the project alignment.

The central/primary group entity role was leading, orchestrating, involving, and engaging people in the transformation process. It was about getting buy-in from key stakeholders, ensuring that the transformation plan is continuously aligned with its future strategy, and securing needed internal and external resources to implement it. Because of culture, skillsets, and technology changes, governance played a vital role in the transformation. Therefore, when identifying those who were to be involved directly and indirectly with this project, it was essential to define their roles as stakeholders from a change management perspective. Knowing the stakeholders' role in the project or the organization helped address the process of the change adequately.

The design of the transformation plan adopted a systematic and holistic approach to existing organizational problems and targeted results. The implementation I orchestrated followed the "design thinking/ doing" method to develop a thorough understanding of the user's goals from multiple emotional, psychological, and behavioral viewpoints. Then, through an agile, iterative process of observation, ideation, rapid prototyping, and testing, it's a mindset that draws upon the interaction of all these components.

In overseeing the transformation journey, I used a carefully crafted digital platform tailored to the initiative's specific objectives. This involved incorporating detailed steps, documents, processes, workflows, and analytical tools within the platform during the planning, design, and implementation phases.

Throughout the process, I ensured the platform's adaptability and responsiveness to the dynamic needs of various business units, ensuring a seamless workflow and continual improvement in material management processes.

The platform was designed to facilitate an agile "Integrated Project Control" approach, promoting efficiency in project management. It not only supported the initiative's vision, mission, and strategy but was also configured to accommodate the unique requirements of different departments.

Furthermore, the platform served as a robust "data management framework," enabling efficient handling of information in line with the transformation journey. Its continuous enhancement was geared towards maintaining alignment with the evolving needs of the organization, allowing users to navigate significant changes without disruption to their routine tasks.

Q7 - What are the key Transformation KPIs that you closely monitor?

To monitor the progress and measure the achieved benefits of the transformation journey, I relied on metrics that were embedded in the digital management platform and aligned with the company's transformation plan strategy, objectives, and priorities, which aim mainly to control and positively impact the following performances:

1. Unclaimed Changes -> Owner, Designer, Consultant
2. Negative Cash Flow -> Owner, Subcontractors, Vendors
3. Billing Delays -> Consultant, Subcontractors, Vendors
4. Under/ Over Payment -> Subcontractors, Vendors
5. Unplanned Deliverables -> Designer, Subcontractors, Vendors
6. Surplus/ Waste -> Owner, Subcontractors, Vendors
7. Low performance -> All Participants

At project maturity intervals, the attained performances were then benchmarked to a baseline of a similar company's earlier megaproject performances.

Although it was a requirement in the plan to attract and retain talent, the company declined to introduce a reward system due to organization size and specificity. Hence, the only reward I could offer to the engaged teams was the learning experience and personal achievements they would obtain from participating in this exciting initiative.

A successful digital transformation in the construction business improves the efficiency of operations, increases the company's visibility, makes it more cost-effective, mitigates with-agility present and future technological disruptions, and allows healthy growth of its business.

Hence, success is defined as achieving the desired results and is measured by looking at the company's established metrics (see my answer to question 7).

Transformation is a complex process requiring the right tools, techniques, and orchestration capabilities to succeed. It can be hard to understand which challenges are most important, but here are three of the most common transformation challenges:

1. Understanding and navigating the change journey
2. Managing change resistance and internal politics
3. Measuring the digital transformation success

The three recommendations for companies to embark on the construction business are:

1. Assess the company's current state; this includes understanding where it is now and where it wants to be in the future.
2. Identify the strategy, goals, and objectives for Digital Transformation. These will help determine which people, processes, and technology best suit the company's needs.
3. Conceive an agile delivery structure that delivers the transformation journey harmoniously and continuously tailored to the company's maturity level.

Finally, before embarking on a digital transformation, it's essential to plan how companies measure success, outlining clear and practical metrics.

Current times are revolutionizing the need for a different construction approach. Continuous supply, quality improvement, technology adoption across all phases, sustainable development, and workforce organization will center on the new era of construction. From streamlining specific processes to collect, manage, and analyze data to embracing new business models, it's no longer a question of whether to use technology but how and why.

I passionately consider that technology should empower businesses to achieve their greatest ambitions. Unfortunately, many traditional and disjointed organizations find themselves in a different reality. They feel trapped in complex, outdated, and inflexible technologies that hinder rather than liberate them through intuitive and innovative solutions. This is precisely why the "Construct 360" system was created.

I am deeply committed to driving impactful change through the "Construct 360" system transformation approach. My collaboration with construction and real estate development businesses spans their entire transformation journey, even when the ultimate goal is uncertain. To me, collaboration involves bridging silos, engaging with stakeholders, and openly addressing their expectations. It revolves around the exchange of ideas and fostering openness.

Successful achievement of transformation objectives demands a meticulous understanding of the overall problem scope and the crafting of a tailored or federated solution that aligns with the distinct business requirements of the client. Success hinges on a comprehensive consideration of all constituent components within the given context.

I firmly believe in a collaborative approach with the client, emphasizing a thorough understanding of their needs and incorporating them into the solution implementation. This entails working with the client, not just for them.

[1] The way these factors are managed, both individually and collectively, determines the success or failure of a project and, ultimately, of the project-based businesses behind it.