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digital-construction
21 min read

What Are the Major Benefits of a Digital Construction Company

Almost every sector has embraced digitalization in recent years. The benefits have been endless, from increasing speed and efficiency and generating data that has further improved processes. However, digital transformation in construction has moved at an unhurried pace.

Some companies have embraced the change and felt the benefits of digital transformation, while others have been slower to evolve.

One McKinsey study suggests that engineering and construction is one of the world's least digitized sectors. There are several reasons why construction has failed to keep up with the pace of change. For example: 

  • Construction projects involve independent subcontractors and suppliers hired for short periods and are therefore less willing to invest in long-term strategic changes.
  • Each construction project is unique, so new tools and methodologies aren't always transferrable.
  • Many construction businesses lack other sectors' research and development (R&D) budgets. 

McKinsey Global Institute Industry; digitalization index; 2015

Source: McKinsey Global Institute Industry; Digitalization Index; 2015 or latest available data

While the above factors are indeed roadblocks that have slowed down digital transformation in construction, they are not impossible to overcome. With proper guidance and consultation, any construction company can unlock the benefits of digital transformation.

A large part of a successful transformation comes down to perspective. Therefore, digital transformation in construction requires a holistic approach, where leaders must consider each level of the project life cycle.

Any transformation needs to be effective, agile, and non-invasive. Construction companies need to be able to embrace these changes without incurring a penalty. On the contrary, any evolution must bring tangible improvement to the business.

Digital transformation in construction needs to be flexible, modular yet holistic and customized to each organization. It should be mindful of the politics and culture of each business so that it can implement lasting changes across each area of the company, from pre-construction, operational efficiency, the supply chain, and staff.

According to a 2022 survey from Zippia, CEOs said the top benefits of their companies going digital include:

  • Operational efficiency (40% of respondents)
  • Faster time to market (36%)
  • Meeting customer expectations (35%) 

Furthermore, 70% of companies either have a digital transformation strategy or are currently working on one.

The above benefits of digital transformation are relevant to any company, construction included. Greater efficiency, speed and client satisfaction have a place in any business. However, there are also several additional reasons to digitalize a construction company.

This article will further explore the main benefits of digital transformation in construction.

01. Deliver better processes and results to the clients

One of the biggest challenges with the traditional construction model is that the participants operate in siloes. There are separate contractors and subcontractors, different disciplines, and operators.

While each division works on the same project, it's generally a far cry from the holistic, harmonized units typical of other well-run organizations.

Digital transformation in construction is focused on leveraging modern and connected systems to improve processes. However, it is also about enhancing all business functions so that construction companies can provide an excellent client-focused experience.

Governments and stakeholders demand shorter life cycles, superior value for money, and improved productivity. However, traditional construction setups are not well-positioned to achieve these efficiencies.

By embracing modern technology and a digital mindset, construction organizations can improve their processes. These enhancements can happen across every aspect of construction, from planning, materials management, people management, and introducing disruptive technology like robotics and machine learning.

Also, advanced 3D modeling can give developers, clients, and contractors parametric design tools to predict future project problems or alterations.

The results of using modern and connected systems are:

  • Considerable reduction in late changes
  • More efficient process
  • Shorter project life cycles
  • Reduced costs 

Overall, the client experience will be improved by greater efficiency and collaboration.

 02. Better connected processes with countless operational efficiently

The siloed nature of construction projects can lead to significant inefficiency and project overrun. A survey of construction leaders done by Plangrid suggests that almost half of all rework results from miscommunication.

Communication methods that connect previously siloed departments have revolutionized many global businesses. For example, the prevalence of smartphones, tablets, and IoT-connected devices can be used on the construction site to help turn plans into reality. Instead of operating off paper plans, workers can use secure, cloud-based systems to plan and implement their work.

However, it's not just about improving the faithfulness of designs from the office to the site. Project managers and teams can be connected and connect with real/time updates and feedback on what is happening, which work is completed, and if there are any problems or issues to be considered.

Connect workflows, teams, and data

Source: Autodesk; Connected Construction; A Better Way to Build

When all stakeholders work off a digitalized and updated set of plans, sub-contracts scheduling and management can become easier to forecast. Additionally, teams can adjust their supplies and resources immediately in response to new updates or changes, reducing waste and lost time.

03. Cost-efficiency

A World Economic Forum (WEF) study has highlighted some case studies that show the benefits of digital transformation in construction.

The paper examined projects that use interoperable data and connected cloud technology platforms to:

  • Enhance design optioneering
  • Improve decision-making
  • Enable real-time communication
  • Facilitate real-time monitoring
  • Use advanced project planning
  • Apply smart collaboration models
  • Integrate design, modeling, planning and collaboration
  • Reduce waste and non-value-adding activities
  • Adopt new business models

The WEF found that implementing a digital model reduced construction costs by 12% for a 10,000 m2 vertical office project. Furthermore, highway construction project costs were reduced by 20%, followed by a 14% reduction on an industrial complex.

Applications of BIM along the E&C Value Chain

Source: WEF; Applications of BIM along the E&C Value Chain

The study cited that these projects can significantly reduce costs due to improved digital tools, better collaboration, and reduced materials utilization.

Digital transformation makes organizations more competitive, meaning they can bid for projects without cutting corners.

04. More resilient to changes and delays

Any construction project is bound to experience delays and complications. Contractors or sub-contractors may also be affected when the supply chains are disrupted, or construction elements become more complex than expected.

Too often, construction projects run over time and budget due to uncertainty. Changes happen on an ad-hoc basis as clients and contractors become more aware of project requirements.

Late changes are frequently a consequence of clients' sudden realization that plans they initially agreed to are not-fit-for-purpose. These changes can lead to extra complexity, rework, and occasionally, significant redesign.

Collaboration, data sharing and streamlined processes between all parties, including clients, are one of the significant benefits of digital transformation in construction.

05. Recruiting young talent

Recruiting the best young talent is a challenge in every sector. Getting the best workers requires various considerations, like company maturity level, compensation, benefits, and the right culture.

However, the opportunity to work with cutting-edge tech and exciting new processes has enormous pulling power in technical fields.

Ambitious new graduates and experienced construction workers alike appreciate tools that make their job more stimulant, efficient and precise. Similarly, they are attracted to big projects that give them a chance to learn new skills and interact with modern technology.

Investing in digital transformation in construction is about much more than buying technology and software that can improve your organization. It is also about fostering an exciting culture that values growth and innovation.

The best new talent wants to work in forward-thinking modern environments. They use technology to achieve great things in their personal lives, so they reason their workplace should be the same.

They want to work for organizations that share their ambition and provide opportunities for training and experience with connected technology and modern methods and approaches.

Construction has a reputation for an overreliance on manual processes that are not well connected. However, many businesses are embracing new technologies like robotics, AI, machine learning, and blockchain. For graduates and passionate construction workers, access to the latest technology is a huge plus and a potential benefit for their growth within the industry.

In a tight job market where the best graduates are the subject of an intense tug-of-war, digital transformations can give you a competitive advantage that can attract digital talents and improve your productivity and ROI on key staff.

 06. Modernizing and not being left behind

Right now, many construction organizations are sitting on the fence. They understand digital transformation’s benefits but aren’t sure how they can deliver them.

Digital transformation offers ways to, amongst other things:

  • Modernize construction methods
  • Transform the supply chain
  • Improve project management and delivery
  • Improve collaboration across the board
  • Integrate data for better forecasting and insights
  • Enhance operation and reduce overheads
  • Attract digital talents
  • Open up new revenue streams

While several companies are sitting on the sidelines, weighing how they will approach their transformation, their competitors started years ago. They have been experimenting with new technologies, implementing them, and training their staff.

In many cases, these businesses are on track and already unlocking the benefits of a more modern, connected approach. These businesses are finishing jobs earlier, saving money, and delighting customers. As a result, they are moving ahead.

Waiting too long will leave you at a disadvantage. Other businesses will take the best clients, workers, and jobs and compound their advantages. Being left behind is a natural consequence of inaction.

While digital transformation in construction has moved slower than other sectors, it's very much on its way.

How Constuct360 can help digitalize your construction company

When you need to digitalize a construction company, it can be challenging to know where to start. Changes made at the department level aren’t enough to effect proper organizational transformation; they need to happen holistically.

The Construct360 approach assists construction businesses in planning and orchestrating their digital transformation process execution. Working with Bashar and the Construct360 system will provide an individual and flexible implementation plan with transparent performance and measuring parameters.

Book an initial discovery call as the first step to a customized, cost-effective, and time-saving digital transformation journey that can move your company into the next growth phase. I take the time to understand your company, challenges, and objectives so I can tailor an approach that will work with your reality.

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Bashar is a Business Transformation Leader and the founder of Construct360, a smart connected construction development system. Bashar experience encompasses over ten years of leading digital transformation programs for significant construction groups, with several billion US dollars in projects portfolio.