Discussion Paper

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DISCUSSION PAPER

Reimagining construction: The vision for digital transformation, and a roadmap for how to get there CONTENTS

3 PURPOSE 4 EXECUTIVE SUMMARY

6 1. THE VISION FOR CONSTRUCTION 6 IMPROVED PRODUCTIVITY AND PROFITABILITY 7 FASTER, MORE EFFICIENT CONSTRUCTION 8 MORE PREDICTABLE, STREAMLINED CONSTRUCTION 8 SAFER PROJECTS 9 ATTRACTING THE TALENT OF TOMORROW 9 BETTER OUTCOMES FOR CLIENTS AND END USERS 10 NEW BUSINESS MODELS 10 GET THE INDUSTRY VIEW

11 2. THE DIGITAL TECHNOLOGIES DRIVING CHANGE 11 INFINITE COMPUTING IN THE CLOUD 12 BIG DATA 13 SYMMETRICAL COLLABORATION IN THE CLOUD 13 COLLISION OF THE DIGITAL AND PHYSICAL WORLDS 14 SITE AUTOMATION 15 MACHINE LEARNING AND ARTIFICIAL INTELLIGENCE 15 PREFABRICATION AND DIGITAL FABRICATION 16 INTERNET OF THINGS 16 THE BLOCKCHAIN 17 SOCIAL AND MOBILE COMPUTING 17 GET THE INDUSTRY VIEW

18 3. STEPS TO DIGITAL TRANSFORMATION 18 LEADERSHIP AND MANAGING TECHNOLOGY STRATEGICALLY 20 OVERCOMING BARRIERS TO TECHNOLOGY ADOPTION 23 TIME AND COST – THE SMALL BUSINESS PERSPECTIVE 24 THE ROADMAP FOR DIGITAL TRANSFORMATION

26 CONCLUSION 27 USEFUL RESOURCES 27 FURTHER READING 28 CUSTOMER STORIES

2 PURPOSE

This paper re-imagines the future for It is based on a webinar broadcast by The construction. It provides a vision of an industry Chartered Institute of Building (CIOB) transformed by the use of digital technology in May 2018 and a roundtable hosted by over the next 3 to 10 years, and lays out the Construction Manager Magazine in September key steps construction firms need to take to 2018. It features contributions from expert get there. representatives from AECOM, BAM Design, Baxall, Beard, Hill Bespoke, ISG, Mace, Skanska, It answers the key questions posed by Willmott Dixon, Autodesk and the CIOB. construction leaders and managers responsible for strategy, business development, innovation, Join the conversation on Twitter: operations, projects, functions, technology #whatifconstruction and more. It is particularly relevant for those working for, or with, general contractors, smaller contractors and speciality trades. These questions include:

• What does a construction industry transformed through the use of digital technology actually look like? • What are the most exciting technology trends for the next ten years? • What is the roadmap: the key steps, in particular the first, needed to realise this vision?

3 EXECUTIVE SUMMARY

Digital technologies are transforming “Technology is about to really every industry, and construction is no change our industry and it’s exception. Infinite computing, robotics, machine learning, drones, the Internet of important to keep it simple. Things (IoT), augmented reality, gaming Initially it’s going to be about engines, and reality capture, to name just a productivity, so how do we use few, are innovating the design, build and technology to do things better operation of buildings and infrastructure. and more efficiently?

From AI-enhanced decision making on future work pipelines, to algorithms designing That unlocks better profitability estimates, and big data powered scheduling – for the industry which is the implications are profound. The result will be something that we all very much a more profitable, resilient and agile industry, need and desire, and it also and a better built environment. Traditional unlocks the ability to provide barriers to project entry such as capital, knowledge, and efficiencies will crumble as better outcomes for our clients digital technologies democratise and level and the end users that occupy the the playing field, particularly for smaller buildings that we create.” businesses. But, these new digital tools will also open doors for new competitors from other Matt Gough, Director of Innovation at Mace industries to enter.

For many, these changes can’t come soon enough. By 2030, population growth, urbanisation and economic expansion are predicted to increase global demand for construction output by 85%1. Rising complexity and risk, constrained finances, the skills gap, and growing sustainability concerns are already driving contractors to develop new ways of thinking about and delivering buildings and infrastructure.

The paper examines the why, what and how of digital technology. It details what the construction industry has to gain by adopting new digital technologies over the coming decade, and then gives examples of the specific technologies that can bring about these improvements. Finally, the paper provides guidance to contractors on the key steps to overcome the main barriers to adoption.

1 http://www.globalconstruction2030.com/

4 “Technology is driving a new and profound relationship with the built environment and will undoubtedly enable exponential changes in our professions with new levels of productivity and business models which are truly disruptive.

In an ever smart and networked world with increasing levels of intelligent and connected built assets we will see themes such as Building Information Modelling (BIM) converging with advanced manufacture, sensing, data analytics and the digital economy to shape a move towards faster, smarter and better performing built infrastructure.

However, to unlock these benefits we need to marry these maturing cyber physical technologies with a competent and diverse workforce where our behaviours and values provide the foundation for such a shift. Getting the balanced scorecard of teams who integrate, lean workflows and open technology exchange must be our priority and consider change as a holistic and whole life approach.”

David Philp CIOB Digital and Asset Management SIG Chair and CIOB Trustee

5 1. THE VISION FOR CONSTRUCTION

IMPROVED PRODUCTIVITY AND PROFITABILITY

Drastically improving productivity and profitability remains one of construction’s biggest challenges. According to McKinsey, Average UK an increase in labour productivity means that construction project margins fell to just higher value can be provided to customers 1% in 2017.4 with the same or fewer resources, which 1% translates into a desirable mix of higher-quality UK Construction: Margin Pressure, 2017, EY buildings and infrastructure at lower cost for owners, higher profitability for contractors, and higher wages for workers2. Productivity and profitability are inextricably linked. For example, if the workforce is 10% less efficient than expected, profits are currently reduced by a minimum of 5%3. So what’s the best way to improve productivity?

“The need for change is based on productivity and cost. If we carry on the traditional way we will take on average 20% longer than intended. The project teams are asking how we get better and the answer at present is inevitably some aspect of digital transformation.”

Paul Connolly, Technical Services Director at Mace

Digital technology is already making a difference for early adoptors and technology Research from KPMG found has the potential to offer a fast track way that the top drivers for to transform the selection, funding and innovation and disruption delivery of projects – making processes more efficient, faster and cheaper. In turn, in the construction industry this will improve profitability across the are efficiency, planning supply chain. Dominic Thasarathar, Industry and cost reduction.5 Strategist for Construction at Autodesk, says: “Digital technologies will iron out a lot of the Building a Technology Advantage, inefficiency in the design and build process, Global Construction Survey 2016, either at the front end through better KPMG planning or at the back end through things like machine learning.”

2 https://www.mckinsey.com/~/media/McKinsey/Industries/Capital%20Projects%20and%20Infrastructure/Our%20Insights/Reinventing %20construction%20through%20a%20productivity%20revolution/MGI-Reinventing-Construction-Executive-summary.ashx 3 http://training4contractors.org/2016/04/profit-margins/ 4 https://www.ey.com/Publication/vwLUAssets/UK_Construction_Industry_-_Margin_matters/$FILE/ATTJK7IP.pdf 6 5 https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2016/09/global-construction-survey-2016.pdf Research from the World Economic Forum backs this up. It predicts that 10 years of full-scale digitalisation of the construction industry will Just a quarter lead to huge annual global cost savings. of construction projects in the last For non-residential construction, savings in 75% three years came the design, engineering and construction within 10% of their 25% phases are expected to increase from $0.7 original deadlines.8 trillion to $1.2 trillion - and in the operations phase, from $0.3 trillion to $0.5 trillion.6 Climbing the Curve, 2015 Global Construction Project Owner’s Survey, KPMG Meanwhile, McKinsey reports that moving to a manufacturing-style production system could boost productivity in the construction sector by up to 10x.7

“In some cases buildings are still being delivered 50% late and 50% over budget and there are still defects on site. Productivity has only increased by 1% in the last 20 years, so the industry is ripe for takeover. We have to move forward rapidly as otherwise other industries will take over.”

Andrew Pryke, Managing Director at BAM Design

FASTER, MORE EFFICIENT CONSTRUCTION

Just a quarter of construction projects in Digital technologies will make the construction the last three years came within 10% of their process more efficient by bringing these key original deadlines.9 The highly fragmented and parties together. Greater integration across disjointed nature of the industry is one of the the supply chain will, in turn, accelerate primary reasons for this. project delivery and enable more projects to be delivered to deadline. Charles Egbu, Vice-President at the Chartered Institute of Building (CIOB) says integrating the construction process – bringing the key parties together across design, build, operations and decommissioning– is essential. He says: “Too often the construction process is disjointed when trying to connect all members of the supply chain, the small size organisations, the consultants, the big contractors, and those who are key players like the clients and the policy maker.”

6 http://www3.weforum.org/docs/WEF_Shaping_the_Future_of_Construction_full_report__.pdf 7 https://assets.kpmg.com/content/dam/kpmg/pdf/2015/04/global-construction-survey-2015.pdf 8 https://www.mckinsey.com/~/media/McKinsey/Industries/Capital%20Projects%20and%20Infrastructure/Our%20Insights/ Reinventing%20construction%20through%20a%20productivity%20revolution/MGI-Reinventing-Construction-Executive-summary.ashx 7 9 https://assets.kpmg.com/content/dam/kpmg/pdf/2015/05/construction-survey-201502.pdf MORE PREDICTABLE, STREAMLINED CONSTRUCTION

Bringing key parties together across the full “If an asset is to be worth its salt, it has project lifecycle doesn’t just drive efficiency; to draw from a variety of skills,” says it also results in better quality buildings Charles Egbu. and infrastructure.

Digital technologies improve collaboration, “If you look at build quality it’s allowing everyone on the team to access important to note that quality in the same data in real time. This makes it easier to quickly test the viability of different construction is not something approaches, and spot and correct errors that is bolted on, it’s something early on. The result is more predictable, that permeates right from the streamlined construction. beginning of a project to the end, and technology has a role to play Connectivity also makes it easier to bring in in that.” diverse and specific skillsets. This combined expertise results in better quality buildings and Charles Egbu, Vice-President at the CIOB infrastructure for clients and end users.

SAFER PROJECTS

Assuring on-site safety has always been who are likely to draw on the asset when important. And, as construction projects it’s complete,” says Charles Egbu. increase in size and complexity, health and safety become even more critical. Technology will enable managers to predict what will happen on site without putting lives “Digital technologies will help reduce the at risk. Drones, for example, allow contractors number of health and safety incidents in to carry out surveys, or inspect eaves or look construction and improve the welfare and at chimneys without having to physically wellbeing of constructors and also those climb on rooves.

8 ATTRACTING THE TALENT OF TOMORROW

The construction industry is perceived as an Firms that implement a digital strategy to unattractive sector that needs stimulation include people along with processes and and a revived image to attract the talent of technology are more successful in attracting tomorrow. In the UK, 43% of hi-tech firms and retaining talent. struggle to recruit science, engineering, maths and technology (STEM) graduates and more people are leaving the sector than are joining it.10

80% of employees prefer to work for digital leaders and that’s not limited to millennials but applies across every age group.11 In fact, employers who are not ‘digitally mature’ and do not offer opportunities for employees to develop their digital knowledge and skills are five times more likely to see people leave the company within a year.12

BETTER OUTCOMES FOR CLIENTS AND END USERS

Buildings and infrastructure don’t always fully With access to insights on occupancy, usage deliver on their intended outcomes. Take, for patterns, energy consumption, and more, example, the toll road that doesn’t bring in owners and constructors could make better, expected revenue or the social housing that more informed decisions about a building doesn’t improve its residents’ quality of life. and its immediate infrastructure. This could lower costs, increase capacity, improve end- Digital technologies can help the industry to user experience, or even maximise value by make better decisions about what assets to identifying new usage capabilities. build, as well as the mix and nature of those assets to ensure projects meet expectations. Smart sensors generating vast amounts of data will enable connected buildings and infrastructure to become more responsive to the needs of owners and end-users.

10 https://www.telegraph.co.uk/business/ready-and-enabled/stem-skills-shortfall/ 11 https://sloanreview.mit.edu/2015-digital-business-interactive-tool/employee/ 12 https://www.trainingjournal.com/articles/features/digital-transformation-retain-talent 9 NEW BUSINESS MODELS

Digital technologies are disruptive. They have “What the construction industry the power to break and remake business can gain by adopting this new models, reshape definitions of value in markets, wave of technology is to really and create not only new forms of competition, shift from the rear-view mirror but new competitors too. focus that it’s had on productivity, For example, the ability afforded by the IoT timely project delivery, and low to harness insights and feed learnings back margins, and really catapult itself into future projects will present new business into a new era of new business opportunities. Combining asset data with models and experimentation to large external datasets such as population demographics and wealth levels, could help compete differently, whether contractors mitigate uncertainty in project that’s in domestic markets or pipelines. This would enable them to invest whether it’s overseas.” in specific opportunities with a far greater degree of confidence. Dominic Thasarathar, Industry Strategist for Construction at Autodesk And, as contractors gain greater understanding of how assets are used, how they perform across their lifecycle, and total associated costs, they have the opportunity to move into totally new business models, such as Real-Estate-as-a-Service.

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What will be the biggest change that technology brings about in construction in the next 10 years?

What the construction industry stands to gain by adopting new digital technologies in the next 10 years?

The CIOB view on digital technology

10 2. THE DIGITAL TECHNOLOGIES DRIVING CHANGE

Today, the number of new technologies emerging is breathtaking. Individually, each of these has the potential to change one or more For more information on these aspects of the industry. Collectively though, technologies, download the Autodesk Construction Manifesto. the interaction between technologies is giving rise to something bigger. It’s fundamentally And watch the future of transforming the very way in which we design, construction video from Autodesk, build and operate buildings and infrastructure. made with the CIOB. And those changes are about to transform the industry by radically improving productivity, quality, safety, reducing environmental impact, and changing business models. “The CIOB looks at the role The following 10 key technologies offer that technology plays from a considerable potential to help drive very holistic point of view i.e. transformation of the construction industry across the entire life-cycle. over the next 10 years. Most of these Not just technologically driven technologies are available now. but impact on collaboration, • Infinite computing in the cloud commercial models [block-chain • Big data enabled], new roles [such as data • Symmetrical collaboration in the cloud scientists] and a shift towards • Collision of the digital and physical worlds construction in the context of • Site automation advanced manufacturing. We • Machine learning and artificial intelligence believe that technology and • Prefabrication and digital fabrication innovative use of data has a • Internet of Things • The blockchain role to play in almost all aspects • Social and mobile computing of construction and the built environment.”

Charles Egbu, Vice-President at the CIOB

INFINITE COMPUTING IN THE CLOUD Learn more

Cloud computing has the potential to transform ‘start with the end outcome’ to ensure buildings the future of design. It will give even the and infrastructure bids are successful. smallest contractors access to ‘infinite’, Infinite computing in the cloud will enable on-demand processing power. When connected them to explore thousands of combinations of with big data and smart algorithms, infinite parameters – for example, material choices, computing in the cloud will allow the industry financing options, procurement paths, and to solve highly complex design problems and physical dimensions, to arrive on a design that make the best possible design decisions. offers the maximum return for the lowest total For example, it could enable project teams to cost of ownership.

11 BIG DATA AND PREDICTIVE ANALYTICS Learn more

When it comes to harnessing insight from big Data and its effective collection, analysis, data, the construction industry has lagged communication and management are central behind other sectors like finance and retail. But, to digital transformation. with the increase in use of Building Information Modelling (BIM) and other project technology tools, large amounts of highly structured data is being generated in construction too. By mining this data, it is now possible for the Better use of data by construction industry to predict the future. everyone in the industry is central to digital Searching for patterns across projects, transformation.13 together with external data sources, could help contractors identify everything from early signs Unlocking Construction’s Digital of problems in the supply chain, to the best Future: A Skills Plan for Industry, way to optimise cashflow and the root-cause 2018, CITB Research of projects going over time and over budget.

13 https://www.citb.co.uk/documents/research/unlocking_constructions_digital_future_full_report_1_oct2018.pdf

12 SYMMETRICAL COLLABORATION IN THE CLOUD Learn more

Construction teams often span multiple “It’s the ability to work together. organisations and geographies, making To work truly as a team, and collaboration complex. All too often, the draw the skills, the knowledge inefficient flow of information throughout and the competencies, and the project supply chains results in last-minute reworks, unexpected costs and project delays. creativity of the individuals that Traditionally, collaboration in the industry has make up the team, and when we been an asymmetrical process with multiple are able to do that it brings the parties working in isolation across the supply power that creativity can usher chain. Clashes are only detected when these out, and it allows us to add value individual models are aggregated towards the end of a project. to that which the client and the paymaster wants from the project Teams that are connected via the cloud will they’ve commissioned.” be able to collaborate in ‘symmetry’ in real time across geographies and boundaries. Charles Egbu, Vice-President at the CIOB The result will be more streamlined and efficient workflows and flexible project resourcing, leading to increased productivity, Discover how Mace used cloud-based construction as well as more creative and predictable management for new Facebook data center. project outcomes.

COLLISION OF THE DIGITAL AND PHYSICAL WORLDS Learn more

All designs must function in the real world from clients and end users by allowing as built assets. Yet, predicting how buildings contractors to ‘walk’ them through designs and infrastructure may interact physically, prior to construction. These technologies also environmentally, socially and economically offer the opportunity to enhance training or with their surroundings is complex. By merging health and safety by bringing information to the virtual and physical worlds, technologies the point of usage in an ergonomic way. like augmented reality (AR), virtual reality (VR) and gaming engines are making it simpler for project teams to design in the context of Learn how IGA is building the world’s real-word systems. largest airport from scratch with BIM and digital technologies. From design to operations to maintenance, contractors can identify mistakes in the virtual world, rather than further down the line in the real world when they are costly to rectify. AR and VR also make it easier to communicate design intent and gather real-time feedback

13 SITE AUTOMATION Learn more

Drones and reality capture laser scanners “My favourite technology and the can improve the pace and cost of projects thing that I really enjoy working by providing an easier, more comprehensive and safer way to perform surveys, scans and with is the drone – the flexibility inspections on tall buildings and structures, of it and what it can bring. To as well as remote assets like pipelines or rail be able to see in an instant what corridors. Feeding imagery taken from drones you’re looking at, and then take into reality-capture software – which stitches that vision back to your desk. photographs together to create 3D models – The time it saves on site, the quickly and easily brings the real world into the digital environment on a large scale. availability and access to that material.” Robotics are also gaining traction in construction. As a highly unautomated industry, Annette O’Connor, Managing Director at connected robots could have a major impact West Gate Maintenance on productivity. Captured data, fed back to the control system, will adjust the robot’s operation and drive greater efficiency and higher Watch to see construction experts from accuracy. Construction robots will transform Scaled Robotics, Bryden Wood, and AI Build bricklaying and masonry, improving the share insights on how their companies are reinventing the industry. speed and quality of construction work, while demolition robots could provide a safer and cheaper alternative to manually tearing down structures at the end of their life.

14 MACHINE LEARNING AND ARTIFICIAL INTELLIGENCE Learn more

Machine learning (ML) and artificial intelligence better understand exactly where they should (AI) will play a significant role in mitigating focus their planning and training efforts and risk in project management at the construction will be alerted to look out for specific problems site. For example, using AI, contractors will be when they do their safety walk. able to automatically assign priority to issues and assign a ‘risk score’ to subcontractors AI will also enable self-driving or generative working on site to indicate the amount of risk design. It removes the need to instruct tools that they are exposing a project to. This is (by setting rules or applying conditional logic), based on data about past behaviours, current minimising bias and opening up new ways of workloads, and more. working towards solving design challenges. Designers will be able to specify design goals Safety on site will also be improved. AI will and then explore infinite permutations of a allow project teams to predict potential issues solution to find the best option. before they happen. Safety managers will

PREFABRICATION AND DIGITAL FABRICATION Learn more

Prefabrication and digital fabrication will Where standardisation isn’t appropriate, digital accelerate the delivery of construction projects, fabrication, in particular 3D printing, will allow by enabling teams to manage projects from teams to turn a 3D model into a finished real- design through to real-world assets with the world object at the touch of a button. Having minimum number of physical ‘touches’, waste, a bespoke item made may no longer be more cost and supply-chain overheads. expensive than buying a standard off-the-shelf Prefabrication will allow contractors to use component. Rather than focusing on cost or standardised elements for buildings and constraints, contractors will be able to select infrastructure. This could allow the industry to the most ideal solution for a project and deliver unlock manufacturing-style productivity levels. it with minimal waste.

The biggest impact on productivity would come from moving toward thinking about construction as a production system, where possible encouraging off-site manufacture, minimizing on-site construction through the extensive use of pre-cast technology, assembling panels in factories and then finishing units onsite.14

Reinventing Construction: A Route to Higher Productivity, February 2017, McKinsey

14 https://www.mckinsey.com/~/media/McKinsey/Industries/Capital%20Projects%20and%20Infrastructure/Our%20Insights/ Reinventing%20construction%20through%20a%20productivity%20revolution/MGI-Reinventing-Construction-Executive-summary.ashx 15 INTERNET OF THINGS Learn more

The Internet of Things (IoT) is going to help • Infrastructure master planning the industry redefine and unlock new forms Mining collected data through predictive of value from built assets. Digital technology analytics will help to better understand our will become part of the DNA of buildings and cities as ecosystems. This will help to steer infrastructure, through sensors and systems decisions on which assets should be built linked by the IoT, allowing better use of and enable the construction industry to be information to make buildings more responsive more confident about future pipelines to the needs of their owners and occupants, of work. inform future work pipelines, and improve the built environment. “Through connected built Connected built assets open up new assets, the industry can become possibilities on three different levels: the custodians of the built • The individual asset environment. When we Traditionally the value of an individual asset understand how the built was fixed at the time of construction. Now, environment is being used the ability to digitally light up assets enables new ways to add value through repurposing through all this connected data and mixed usage. we will be able to steer future demand and usage.” • At a systems level Connecting assets across cities will make Dominic Thasarathar, Industry Strategist for it possible to optimise the usage and Construction at Autodesk maintenance of infrastructure systems such as public transport, utilities networks, and more.

THE BLOCKCHAIN Learn more

Blockchain technology could add more inspection is successful, then they would be transparency to every type of agreement and automatically paid, regardless of what layer transaction in a construction project. It could they’re at in the supply chain. be particularly beneficial in much-disputed areas like payments and equipment leasing. Blockchain technology also has the potential to transform the leasing process for heavy For example, the blockchain could mitigate equipment like cranes, compressors and the risk of cascading payments that have excavators. The blockchain could automatically dogged the industry for so long. By acting as a manage the reams of paper documents that trustworthy contract administrator, blockchain need to be signed and maintained, as well as technology could offer an error-free process track and record the operational status of the for the monitoring of contracts. If a contractor asset during the lease period. has finished their part of the project and the

16 SOCIAL AND MOBILE COMPUTING Learn more

Some sectors have undergone huge transformation through increased uptake of social and mobile computing. The construction Digital technology is transforming industry still has some way to go but it is easy real-world construction projects. to see the benefit of digital marketplaces for Learn more about what’s happening fulfilling transactional pieces or work, and today from this selection of crowdsourcing too – where large numbers of compelling case studies that use people collaborate to solve problems online. digital workflows today. For example, allowing contractors to access, on demand, the best skills at the right time.

Skanska - Combining mobile and cloud technology on site.

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17 3. STEPS TO DIGITAL TRANSFORMATION

“For us as an industry I think what’s interesting is not necessarily what we have to gain - there’s a huge amount - but what we stand to lose. Construction as it stands is the least digitised of any sector and we can’t continue to be in that place because other industries are having huge transformations and really benefiting from the adoption of technology much faster than we’ve been able to do.”

Matt Gough, Director of Innovation at Mace

LEADERSHIP AND MANAGING TECHNOLOGY STRATEGICALLY

An understanding of the digital technologies • People strategy set to transform the construction industry When it comes to digital technologies, is essential, but it’s not enough on its own. leadership teams should think beyond Successful companies will be those who traditional return on investment (ROI) for integrate digital technology into their corporate the project or for the business and start to strategy and leadership. consider the emotional ROI for employees. They need to make employees feel included Here are four key areas to consider: in the digital journey. Emotional ROI could be particularly relevant for milennials who may • Business strategy value experiences more than a career path. Digital technologies, like AI, fundamentally change the way work is done. This, in turn, Malcom Clarke, Managing Director at Baxall has a knock-on effect on wider business Construction, says: “Fundamentally it’s strategy for construction companies – for about a business model that provides example the fees they charge, the value sustainable profit and enables people to they provide, and the way they position feel rewarded and proud. We added a themselves in the market. If they can solve measure of enjoying being in construction. complex challenges effortlessly – be that For too long people were sitting in a horrid design, commercial or whole-life, then what place. They dreaded it.” should their value proposition be? Mark Norton, Head of BIM at global Dominic Thasarathar says: “At one extreme construction services company ISG, agrees: they might compete with advisory firms “Emotional ROI considers a persons’ focusing on outcomes, at the other they motivation and aspirations within the might hyper-optimise delivery processes to company. A coordinator moved to surveying offer the lowest price. In between there’s a when technology was introduced, and he whole raft of opportunities, but companies became really engaged and moved on leaps can’t take too long in deciding, or stand still and bounds. We also had a guy in R&D and as the democratic nature of technology will when we put in patent applications he was reward ‘first-movers’.” more chuffed with that than a pay rise. You can do things to engage people. It’s not always finances; it’s interest in their job.”

18 • Skills The increasing digitalisation of construction requires the industry to reconsider its At the heart of approach to skills and the way it identifies digitalisation is a need future skills requirements. But it’s not as for a digitally-skilled straightforward as sending everyone on an workforce. Construction IT training course. businesses not only

need to be able to use “As technology providers we technology, but to make believe deeper collaboration the most of it. The right with the industry will have the skills are a key catalyst for digital growth. greatest impact. Maybe that means new business models.” Leaders need skills in Dominic Thasarathar, Industry Strategist for implementing digital Construction at Autodesk change and creating the right structures and culture. Managers and “To seize the opportunities presented by these emerging technologies we will have to operatives need problem- embark on a training programme unlike any solving skills and greater other our industry has seen before. Our new digital savviness.16 analysis estimates that we will need to reskill over 600,000 construction employees over Unlocking Construction’s Digital the next two decades, from trades vulnerable Future: A Skills Plan for Industry, to technological change to new roles created 2018, CITB Research by technology.” Moving to Industry 4.0, Mace15

“There’s something for everyone model versus leaping to something else? to learn. It’s exciting, but it In terms of skills, many in the industry have does mean someone could come said we need more tech-savvy people, which and take over. But bringing is true. But consider that, as technologies like AI mature, the skillset required will shift people from the gaming from the tech-savvy to those who are skilled industry into construction to in ‘knowing the right question to ask, in the bridge the skills gap is exciting. right way’. They won’t need to get under the It’s not about muddy boots; hood of technology.” it’s robotics and AI.” Cross-industry partnerships and

collaboration will also be critical in Andrew Pryke, Head of Design at BAM addressing the skills gap. Felipe Manzatucci, Director of Digitalisation at Skanska, says: Dominic Thasarathar asks: “How much time “We need to open our eyes and realise that should the industry dedicate to solving the we are all in the industry. We need to realise problems that have taxed its legacy business there are no barriers between BAM and

15 https://www.macegroup.com/perspectives/171027-moving-to-industry-40 16 https://www.citb.co.uk/documents/research/citb_constructions_digital_future_report_oct2018.pdf 19 Skanska and Autodesk working together. to succeed. This will be challenging for By collaborating we are driving success in the many, especially in terms of getting buy- industry and we will all benefit. in from stakeholders who require proof of We need to acknowledge that we’re not taking ROI. Leaderships teams must navigate this away others’ intelligence or market share, but mindset change to create a culture where we’re helping each other with education.” people are free to innovate rather than bogged down by fear of failure. • Culture change Across the construction industry there is a reluctance to take risk. There are many “Technology adoption and uptake reasons for this stasis; the opposing business isn’t the issue. The biggest barrier goals of project participants, the manner in to adoption is more fundamental which projects are procured, fragmentation of the supply chain, lightly capitalised balance than that. Even just onsite sheets, the uniqueness of each project, the devices are a big mindset change. variable cost nature of contracting, and more. It’s a corporate change. There are To compound matters, the cyclical nature of a lot of sites where internet and the industry provides only limited windows in mobile phones are banned. The which to address these issues. fundamental way we think is the But, to make the most of digital technologies, thing that needs to change.” the industry needs a more agile mindset and a recognition that it might fail in order Stefan Mordue, Regional Consulting Manager at AECOM and the CIOB Special Interest Group

OVERCOMING BARRIERS TO TECHNOLOGY ADOPTION

Integrating digital technologies into the a lot of resistance to it, so we had an uphill corporate strategy creates a solid top down battle. But, by focusing on what it is trying to approach, but it’s likely employees and do – the data management, it then acts as an clients will, sometimes unconsciously, enabler for everything else for construction. put up resistance. All of a sudden in 6-9 months there has been huge uptake from everyone – supply chain Here are four key areas to consider: and internal people. What we have found is that making it so that it’s at grass roots, so • Employee inertia people on site and in construction teams are Digital technologies necessitate new leading it, and they want to do it, has made workflows. For some this is easy, but for uptake very fast.” others change can be difficult. Building information modelling (BIM), for example, • Client resistance has many advantages but someorganisations Not all scepticism is internal. Clients can have found that their employees have been also prove resistant to change. Kirsty Lever, reluctant to embrace it. Regional Construction Manager at Beard, explains: “We are a very traditional building Andrew Gamblen, Digital Manager at Willmott contractor, so our workforce doesn’t want to Dixon, agrees: “At the start of BIM there was embrace [digital technology] and a lot of our

20 clients don’t want to embrace it, but that’s Meanwhile, on-site training can upskill the more that they don’t want to pay for it. It’s a existing workforce. Paul Connolly, technology brick wall for us.” director at Mace explains: “We have training programmes based around familiarisation Similar to employee inertia, one of the ways and education. We give [our employees] to overcome client resistance is to show tools to see if they can drive a model, open them the benefits. Once they understand, a model. Then we have teams on site, so they will come back for more despite the each project has a digital engineer who additional costs in some instances. “Just do trains 20 or 30 people. It has to be habitual, it and let them come along for the ride,” says just like updating your CSCS card. Make it Mike Beckett. “Then the client sees it’s BIM part of the process.” and employs you for the next job. Don’t sell it to them, just tell them they’re getting it.” Mentoring can also be used to address the skills gap. “We still have an ageing Malcom Clarke agrees: “We are working with workforce we need to keep with us for 25 schools that didn’t want [BIM] but we carried years,” says Mike Beckett. “I am fanatical on and have just shown after two years there about technology, but I find it harder and is 47% less energy used than the benchmark. harder to keep up. There is room for two-way The client is now asking about their other mentorship where young people can show 19 academies across the south east, saying the grey hair brigade and vice versa.” Stefan they don’t know what the others are costing Mordue agrees: “Technology doesn’t negate against the original design.” the need for experience, so coupling those two skillsets can only be good thing.” Educating clients about the benefits of digital technologies is also important. Moving forward, all employees will need the Mark Norton says: “It does come down to skills to be able to: education. We have done a few teaching sessions. [Clients] were disinterested until • Think creatively about problems and their they saw results and once they restructured solutions [their programme], it took two weeks off, so • Understand how to use digital tools they now want everything 4D sequenced. It’s • Assess which tools to use in which education and demonstration - if you can circumstances demonstrate the value people get it quickly.” • Manage the data that flows to and from the use of these tools • Skills gap The current skills gap is a pressing issue that must be addressed. There needs to be a push to change qualifications, courses and apprenticeship programs to include digital skills and introduce more digital training programmes on site.

Regarding digital skills, Andrew Gamblen says: “Those on [Willmott Dixon’s] graduate programme spend three to six months with the digital team. Our ethos is to keep our digital teams small though, as we want it to be business as usual.”

21 Two core competencies needed to push the construction industry forward

Flexible mindset

• Curiosity • Problem-solving • Creativity • Emotional intelligence Seek out • Communication improvements, make them happen

Understanding tools and data Consider alternatives

• Knowledge of how Industry specific tech works • Range of tech avaliable/ being developed Do what they’re told • How data can support tech development • Collecting, storing, sharing, using data

Use what Know what’s Know how to they have available solve problems, implement change Source: CITB Research 17

CITB Research groups these skills into two • Identify their basic skills needs core competencies that are needed to push the • Proactively drive their own professional industry forward: having a flexible mindset and development to include the skills needed an understanding of tools and data. for both a flexible mindset and digital technology and workflows But it isn’t just the organisation who should • Seek the required knowledge/skills take responsibility for upskilling the workforce. appropriate to their role Individuals must also take charge of their own • Seek opportunities where they can get digital transformation. Here are the key actions involved – just do it, keep it simple and employees should carry out: seek results • Stay in the game – it’s exciting and a whole new world of opportunity is opening up!

17 https://www.citb.co.uk/documents/research/citb_constructions_digital_future_report_oct2018.pdf

22 TIME AND COST – THE SMALL BUSINESS PERSPECTIVE

Digital technology adoption across the own productivity, we’re improving our own construction industry is on the rise, but there safety and we’re bringing forward ideas that is still a way to go until many reach maturity – make ourselves invaluable to some of the large especially small-to-medium-sized businesses contractors. Our clients want to see technology, (SMBs). In contrast to larger organisations, they want to know what we can offer them.” where training is more readily available, some SMBs fear that digital technologies will cost Malcom Clarke advises to focus on the them more time – and therefore money. efficiency gains rather than immediate costs. But to do nothing may cause greater harm He says: “The efficiency gains pay for it twofold. in the long term. We’re still hitting SFA targets, are below budget and our margins have gone up and our Annette O’Connor, Managing Director at family- supply chains’ margins have gone up too. The run building contractor West Gate Maintenance, efficiency gains are phenomenal.” says: “If we don’t embrace and take forward technologies we’re going to become dinosaurs in the market and we’ll make ourselves extinct. Find out how Fortis, a smaller general contractor of Technologies very much are being driven 75 employees, saw the potential of enabling digital by the big boys and the big construction workflows to improve the quality of its projects. companies and we are being forced into it, but by embracing technology we’re improving our

23 THE ROADMAP FOR DIGITAL TRANSFORMATION

Digital transformation can be daunting for “Just get on with it. Whether a client wants it, those just starting out. Breaking the journey whether staff or supply chain realise what it is, down into key steps helps to make the whole just do it and eventually everyone follows as process more manageable. Drawing on the they will eventually see it’s a better way.” insight of experts and those working in the Malcolm Clarke, Managing Director at Baxall industry, this roadmap highlights the steps Construction construction firms need to take to realise a new and more successful future. Collaborative working

Take a more integrated approach to design, build and facilities management and prioritise the development of collaborative, real-time 1. Manage processes and shared information across the technology supply chain. strategically “Realise there are no barriers between BAM and Skanska and Autodesk working together… by “For ‘at scale’ digitalisation, leadership needs collaborating we will all benefit.” to fully understand the potential of digital Felipe Manzatucci, Digitalisation Director technology and how to make it flourish through at Skanska changes to organisational structure, skills investment and culture.”18 Unlocking Construction’s Digital Future: A Skills Plan for Industry, 2018, CITB Research 3. Educate and skill the workforce

2. Change Understanding digital tools and data the culture “Educate and demonstrate to people what [digital technology] can do. Teach them how to Just do it: flexible mindset fish rather than give them fish.” Mark Norton, Head of BIM at ISG Seek opportunities for involvement in your organisation’s digital transformation, and At the heart of digitalisation is a need for a think creatively about the challenges and digitally-skilled workforce. There needs to be their solution. a push to change qualifications, courses and apprenticeship programmes to include digital “The organisations that are most successfully skills and introduce more digital training integrating technology are those that are using programmes on site. digital tools to solve specific problems.” Unlocking Construction’s Digital Future: A Skills Plan for Industry, 2018, CITB Research

18 https://www.citb.co.uk/documents/research/unlocking_constructions_digital_future_full_report_1_oct2018.pdf

24 Learning from other industries Digital workflows

“Technology transfer and joint ventures. Get the Today BIM workflows are being adopted across millennial to move from Airbus to Mace the supply chain, evolving from a tool that or Skanska.” has historically been used to drive efficiency Andrew Pryke, Managing Director at within design, into one that connects design to BAM Design the build process, and from there to facilities management. What can the construction industry learn from manufacturing, with its high productivity One [supplier] said he didn’t realise [the build] and its lean, systematic method for was a BIM project but [did say]: “I now know waste minimisation? why we used 60% of resources and took us half the time to build it. We got on site and everything was in the right place.” Malcolm Clarke, Managing Director at Baxall Construction

4. Digitise Optimise data usage processes Data and its effective collection, communication and management are central to Collaboration digital transformation.20 Unlocking Construction’s Digital Future: A Skills The emergence of real-time collaboration Plan for Industry, 2018, CITB Research environments should help shift the industry to symmetrical collaboration as connectivity through the cloud will enable all project 19 https://www.autodesk.com/campaigns/the-power-of-digital-for-construction participants to effectively work in one ‘virtual’ 20 https://www.citb.co.uk/documents/research/unlocking_constructions_digital_ future_full_report_1_oct2018.pdf project office.19 Constructing with the Power of Digital, Autodesk

25 CONCLUSION

It’s an exciting time to be in construction, as supply chain. Those leaders who appoint digital digital technologies promise to bring about technology evangelists at a grassroots level, as unprecedented change. But there’s no point well as mentors to increase digital skills across waiting for the competition to get ahead. the workforce; or those who educate clients and Now is the time to embark on your digital employees about the benefits of new digitally- transformation journey. supported processes like BIM will succeed in a digitally-transformed industry. The vision: Successful individuals will be those who Digital technologies have the potential to drive proactively drive their own professional greater productivity and profitability, creating development to include the skills and more value as well as much safer construction knowledge needed for a flexible mindset projects. Technology will generate insights that towards digital technology, workflows and enable planners to better understand our cities data management. as ecosystems, enabling organisations to better predict pipelines of work. Design will be more Finally, the good news is that Autodesk and the predictable and streamlined, and there will be CIOB are here to help get you started. greater integration across the supply chain, leading to better outcomes for the client and end users of the asset. And digital technologies will secure the future of the industry by attracting future talent and disrupting the old For further information order to open up new business models and please visit us online at: opportunities. www.autodesk.co.uk To date, the industry’s rigid structure – @Autodesk_UK commercially, contractually, in terms of the lack of certainty around pipelines of work, etc – has #whatifconstruction made it difficult for construction companies to take a big bet on technology in the way https://www.ciob.org/ that other industries have. However, digital @theCIOB technology adoption is now more democratic thanks to its increased commoditisation. This significantly lowers the barrier to adoption, particularly for SMBs and those looking to offer more value and new services.

The roadmap:

Successful organisations will be those whose business leaders integrate digital technologies into their corporate strategy and put in place initiatives to break down barriers to adoption. For example, those who encourage a culture of innovation to use digital tools to solve problems, streamline workflows, optimise data management and collaborate across the

26 USEFUL RESOURCES

BIM+ library of news and project case studies: Autodesk free introduction on how to use http://www.bimplus.co.uk/news/ software, Autodesk reseller network for product and BIM training: https://academy. CIOB training courses: autodesk.com/ BIM Technician: https://www.ciobacademy.org/ product/bim-technician/ Autodesk knowledge network: A rich repository BIM Management: https://www.ciobacademy. of more than a million contributions from org/product/bim-management/ Autodesk, its community, and its partners https://knowledge.autodesk.com/ 6-week free BIM course: http://www. bimcampus.co.uk/