Digital transformation is one of the hottest topics in the construction industry. Employers are grappling with how digital technologies can benefit their businesses and how they can harness the technologies' growth potential. The idea is to use smart ways to integrate new technologies into day-to-day business processes and use technology to change how construction companies work.
Several construction companies use digital technologies to improve their production, efficiency, and customer service. For example, For Construction Pros reports that construction companies could see a 50–60% increase in productivity by adopting advanced automation and digitizing their processes.
Yet, construction companies still need to overcome several obstacles to undergo digital transformation. In this article, I'll talk about some of the things slowing digital transformation in construction and how you can get around them.
What Is Digital Transformation in Construction?
Digital transformation creates opportunities to change and improve traditional construction. In addition, the digital world has given us access to previously unavailable information, data, and knowledge.
Digital transformation integrates information and digital tools to optimize construction processes and automate operational functions to make them more efficient. As a result, a construction company can become more productive and effective at what they do daily by going through this change.
It is about creating transformative layers of technology across your operations at the highest level. But digital transformation looks different for every business, and that's okay. There's no one-size-fits-all definition for construction digital transformation or how to pursue it.
Digital technologies help construction companies develop a holistic view of their operations and make better across-the-board choices to efficiently reach their goals with minor rework, delays, and conflict.
Moreover, a construction company cannot afford to be uncompetitive or stagnant in the face of the rapid growth of the Internet, innovations, and the digital world. Construction companies must understand their customers' needs and customize services to meet those needs. This digital transformation in construction is not a process without challenges, but there are ways to make it happen.
The Importance of Digital Transformation for Construction Companies
1. A Better Customer Experience
There is a world of possibilities with better digital capabilities, faster design and construction cycles, and easier project planning. And it all starts with the customer.
Today's customers expect a whole new set of interactions, even in construction. They want to see accurate, up-to-date project information at their fingertips, and they want it fast. Those expectations influence their purchasing decisions and customer experience.
Any construction company with excellent customer experience has the potential to increase credibility, sales, and profits.
2. It Increases Market Responsiveness to Changes in Demand
Companies need to be responsive and adaptable to stay competitive in a changing environment. The benefits of digital transformation will run throughout an organization when construction companies invest in it.
Digital transformation in construction improves emerging technologies to increase efficiency due to the changing market. Companies that respond fast to market needs can stay ahead of their competitors, enhance control over their products, and provide their customers with better choices.
3. Improved Flexibility, Agility, and Innovation
The spirit of innovation and flexibility is the hallmark of a design and build company. Changing from a one-size-fits-all approach to one that meets today's innovation demands will revolutionize the way we do business. This can create long-term growth as improvements are made on an ongoing basis.
4. It Empowers Decision-Making by Deepening Data Analysis (Big Data)
According to Numbering Institute for Market Demands, digital transformation is essential to allowing construction companies to meet the needs of their customers.
Improving how companies use information can empower decision-making by deepening data analysis.
This would allow construction companies to make estimations, calculations, and predictions faster and more accurately about their products and services.
5. It Improves Operational Efficiency and Productivity
Increasing corporate efficiency and reducing information silos are two of the key outcomes of digital transformation in construction. As a result, businesses can use new technologies more strategically, connecting more projects and becoming more productive.
The result is a boost in productivity and profitability through reduced costs. Furthermore, it will help construction companies make the best use of their essential resources. It also helps integrate the operations, improve communications, and increase productivity.
A digital transformation increases operational efficiency and makes an organization more profitable.
Major Obstacles to Digital Transformation in Construction (Plus Workable Solutions)
To overcome the significant obstacle of digital transformation, a construction company must first identify those obstacles. Here are some of the biggest problems you'll have to deal with and some ideas for dealing with them.
1. Ineffective Data Management
Data management is a significant obstacle in creating a digital transformation that provides value to the construction team and the customer. The consequences of ineffective data management generate large amounts of misinformation about project status, budgets, and resources.
According to a Gartner study, 40% of company data is inaccurate, incomplete, or unavailable, which prevents businesses from implementing data-driven strategies.
Construction companies have long managed their data with spreadsheets. However, this can lead to confusion, high costs, and risk of errors. In addition, data management plans are often missing before digital transformation projects begin in some construction companies.
The sheer amount of information can be overwhelming, and making crucial decisions with bad data is difficult. However, there is plenty of room for improvement.
Construction companies can increase productivity and profitability by streamlining their data management with modern technology. Documentation will be more accessible, invoices will be visible, and project planning and execution will run more smoothly.
Solution
Today, many construction companies are still trying to solve issues of poor data management. They need a solution that allows them to get the complete picture of their business, improve efficiency and save money simultaneously.
Effective data management for construction companies depends on understanding their data needs and data storage, search, and organization. An enterprise Database Management software (DBMS) might be the solution. However, viewing this as an independent factor might not be a good idea. Instead, it should be seen as part of a whole that includes people and processes.
Construction companies must understand the need to change how things are done to reap the benefits of digital transformation.
2. Employees May Struggle to Learn New IT Skills
ConstructionDive reports that most construction companies have been slow to invest in IT, even though it appears reasonable to assume that it will always be an essential part of construction processes.
This is because most of their employees work long hours, are hard workers, and their work is of high quality. However, they are not as eager to learn new skills.
Furthermore, some leaders and project managers are also experiencing difficulty adapting to IT skills in the construction industry.
Solution
IT skills are needed in design, project management, and process improvement. Employees who can upskill to learn those three categories benefit the most.
Learning new IT skills has never been easier. However, it's time to rethink how you communicate and deliver training. Each company must evaluate its needs and tailor training to specific skill sets. Context ensures you're committing the right resources to the right jobs at the right time.
Construction companies must redefine their transformation strategy and educate their staff about its importance. They can achieve this through digital transformation awareness and employee training and development.
3. Budget Concerns and Restraints
Budget concerns and restraints are the biggest obstacles to digital transformation. Companies fear that the process will be time-consuming and costly and also fear that the process will fail. To transform the construction industry into a digital one, construction firms must invest in new R&D methods, procedures, and resources.
The construction industry, a cyclical sector, struggles to generate profit in the current economic and business climate. For many companies, the idea of transforming their digital infrastructure is a difficult conversation to have.
The thought of spending extra money on technology or software in a time when budgets are often being cut is scary. This is because of the high amount of funds necessary for technological development, software, hardware, and personnel. Therefore, it can be a daunting task for management.
Solution
As the construction industry evolves and opens up to technology, construction companies face challenges integrating digital tools. A partnership with a consultant who understands your budget concerns and restraints could help you quickly and efficiently shift your company.
Bashar helps construction companies take advantage of all that digital transformation has to offer by navigating around budget concerns and restraints. Unfortunately, most construction companies are immersed in conventional methods, so they need someone who can help them adapt to new technology in a safe and measured way that won't disrupt their daily business operations.
4. Evolving Customer Needs
Adapting to changing customer demands in the digital age is one of the biggest challenges for construction firms. Customer involvement is critical to the process; they must have a say.
A construction company that is late in responding to customer needs and changing management is like a person who takes the time to turn on the headlights of his car only after he has already crashed into the wall.
Organizations with higher staff turnover, decentralized decision-making, and information silos will have more difficulty adapting to change. Therefore, they must find technical solutions to bridge the gap between legacy systems and digital innovations.
Solution
Customer behavior and expectations are changing, and new technologies are challenging the status quo. To compete in this ever-changing market, construction companies need to have robust systems in place and be able to adapt and update their business models.
This means having the flexibility to quickly implement new technologies as they become available while still maintaining quality products and services. Furthermore, by shifting their mindset from product-focus to customer-focus, construction companies can transform by delivering solutions that inspire and accelerate building projects.
5. Companies Do Not Approach the Transformation Process Holistically
Construction companies are not approaching digital transformation holistically. Instead, they often think about digital transformation as a process of integrating technology with existing methods, but it is much more than that.
Furthermore, they view themselves as an amalgamation of siloed techniques. This makes it challenging to adopt a unified system design. As a result, companies have no systematic method of prioritizing new technologies or tools. The obstacles that stand in creating a digitized construction business go far beyond the technological issues.
Solution
Successful digital transformation in construction is possible. Companies must adopt a holistic approach to the entire transformation process - from reimagining their business to reorganizing and restructuring their systems, processes, and people.
Companies often start with a specific project and then add on another piece of technology. Unfortunately, the solution-first approach can be expensive, and impact efficiency as employees must learn to use several new tools.
A more holistic approach is to take an inventory of all the digital technologies people use, define their value within the organization, and determine what tasks are still done manually.
Conclusion
Construction companies that want to disrupt their industries and remain relevant should embrace the challenges of digital transformation. You can speed up decisions and adapt to new circumstances by creating a company-wide context for understanding.
When it comes to digital transformation, you must remember that there is no right or wrong approach. Ultimately, it is not the best technology but the best knowledge that makes a company successful. What Construct360 offers is knowledge about planning, executing, and all the dependencies between the processes. The final step is to start and stay committed all the way through.
Do you want to start your digital transformation journey in your construction development business? Then, take action and book a discovery call with Bashar today!
