DIGITAL AWAKENING The digitalisation of construction in the Middle East MAY 2021

Sponsored by The best opportunity to deliver impact is through the greater digitalisation of the construction process

2 / Digital transformation in construction FOREWORD SWITCHING ON TO TECHNOLOGY

ith regional budgets under increasing Riyadh’s drive to develop ’s pressure from oil price uncertainty infrastructure to deliver the kingdom’s Vision and from the impact of the Covid-19 2030 economic development plan is set to pandemic, the vast amount of time, make it the centre for regional construction for money and energy lost on wasteful many years to come. Wconstruction practices represents a real threat to As well as housing and infrastructure devel- the region’s development visions. opments, ambitious gigaprojects such as the Calls for reform in Middle East construction $500bn Neom future city, the $16bn Red Sea centre on the need for greater collaboration on Project, and $6.5bn Qiddiya entertainment city projects, and the earlier completion of finalised will showcase the benefits of digital technology in designs. The best opportunity to deliver these construction to deliver leaner, faster, safer pro- changes is through the greater digitalisation of the jects while maintaining construction quality. construction process. With so many innovations that have the poten- But as the regional construction industry comes tial to transform the industry, from drones, robots to terms with the need to leverage technology to and 3D printing to BIM and digital twins, one chal- achieve greater efficiency and maintain quality on lenge for companies is to know where to focus project delivery, the market is diverging. their digital investment. While the UAE, Qatar and Saudi Arabia have The additional financial pressures caused by made significant strides in the digital transforma- Covid-19 mean that there is not always capital to tion of construction, other countries in the region invest in new technology. are proving slow to adopt digital solutions. Partly due to its subscription-fee model, the As part of its drive to position itself as a lead- most popular technology investment for con- ing destination for business and tourism, the UAE struction professionals at the moment is cloud pioneered the region’s use of digital technologies computing, which supports the use of web-based in construction such as building information mod- software as a service (SaaS). SaaS is flexible, en- elling (BIM) on landmark projects including ’s abling data to be accessed from any device with Museum of the Future, Dubai Metro, the Louvre an internet connection, but it is also convenient as Abu Dhabi and Expo 2020. the responsibility for server, database, and code As Expo 2020 draws near and the effects of a maintenance is on the host rather than the user. growing oversupply in high-end commercial and With both the opportunity and the need to residential real estate are felt in the UAE, the focus change, the coming years are set to see a rapid of efforts to reform the regional construction in- acceleration of digital transformation in the dustry is shifting to Saudi Arabia. Middle East construction industry.

Digital transformation in construction / 3 OVERVIEW CLOUD DRIVES DIGITALISATION Digital technology is making inroads into the region’s construction industry

espite low levels of adoption, the poten- construction and transport projects planned or tial for digital technology to deliver signif- underway, including a $ 298bn pipeline of future icant improvements in efficiency, build projects, Saudi Arabia accounts for about 45 per quality and worker safety, is becoming cent of the value of construction market in the increasingly understood by the region’s GCC and . Dconstruction industry. And with high-profile projects such as Neom In a poll of 50 GCC construction professionals future-city, Qiddiya entertainment city, and the conducted by MEED in the first quarter of 2021, Red Sea Project being used to showcase the 100 per cent of respondents said that digital Saudi Arabia Vision 2030 agenda to transform the technology improves project delivery. About 58 kingdom into a globally competitive technology per cent of respondents said that digital transfor- hub, Saudi Arabia is set to be a major driver of mation would have the biggest impact on overall construction digitalisation in the region. project management and performance, while 29 per cent felt that the most benefits would be seen GIGAPROJECTS in speed of delivery, accuracy and collaboration. “The appetite for the use of digital techniques But while there is widespread acceptance of the in the delivery of gigaprojects is high,” says David value of digital technology across the construc- Glennon, digital delivery director at the Red Sea tion industry, its deployment is uneven. Development Company (TRSDC). Asked to provide feedback on the extent of “These are ambitious projects that cannot be digitalisation of the construction industry in each effectively delivered through traditional methods,” of the GCC markets, along with Egypt, survey says Glennon. “The time, cost, quality and sustain- respondents reported that the UAE is leading the ability improvements offered through digital ways way in the region’s construction industry technol- of working at scale becomes a very compelling ogy transformation. reason for change.” This is perhaps unsurprising. BIM was first With an eye to diversifying economies and posi- mandated by Dubai Municipality in 2013 and an tioning themselves on the world stage, the UAE and increasing number of companies in the UAE are Saudi Arabia have an incentive to promote digitali- using drones to map, survey and monitor con- sation in their high-profile tourism developments. struction projects. In 2019, Dubai became the In other markets however, where economic home to the world’s first 3D printed building. development plans are focused more on Not far behind however is the region’s big- traditional transport and infrastructure projects, gest construction market. With some $ 1,137bn of there is less appetite to explore new digital solutions.

4 / Digital transformation in construction THE DIGITAL OPPORTUNITY The level of digitalisation in construction vs the value of planned construction projects ($m)

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OUTER SPACE Digital solutions such as BIM are expected on most projects

4 UAE 3.68 SKY HIGH $129bn BIM is mandated by most leading project clients

SAUDI ARABIA QATAR 3 3.1 BAHRAIN 2.96 $298bn 2.52 2.5 $68bn $25bn $28bn LIFT OFF Digital solutions 2.5 such as BIM used $102bn on some projects

EGYPT 2.14 2 $165bn

LOOKING UP Some interest in digital solutions. But usage is rare

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GROUND ZERO Advanced digital solutions are not Digitalisation rating being used in construction Value of planned construction 0 projects ($bn)

Source: MEED Industry Survey, MEED Projects The MEED digitalisation rating indicates the degree of digital transformation in the construction sector and is based on the perceptions of respondents to the MEED Construction Industry Survey 2021. Digital transformation in construction / 5 Over 41 per cent of respondents to the MEED they had already invested in this and had further survey stated that they used BIM on less than 25 investment planned within two years. per cent of their projects in the region. “Companies are starting to move from a capital “The UAE is the early adopter of technology expenditure model to an operational expenditure in the construction sector [in the GCC], but the model,” says El-Hawary. others will follow,” says Maged el-Hawary, CIO at “So instead of acquiring new technologies, they Dubai-based construction company ASGC. “This use subscription services,” he says. is the cycle of technology. You have leaders in He further explains that software as a service adoption and the others follow at a later stage.” (SaaS) can deliver applications over the internet, which is easier for a company than installing and IN THE CLOUD maintaining their own software. Despite early concerns in the region about data “Software as a service, storage as a service, in- security, especially in government projects, cloud frastructure as a service is the easiest way, and the computing is gaining traction. most secure way to do this is to go to the cloud.” The MEED survey shows that while BIM is the Anas Bataw, director at the Centre of Excellence most widely adopted digital technology on con- in Smart Construction at Heriot-Watt University struction projects in the GCC and Egypt, cloud Dubai says that cloud-based technologies are the computing is now a close second. most important digital investment opportunities “Since 2018, the market has improved,” says for companies today. El-Hawary, “especially since Covid.” “They offer a host of benefits – flexibility, This confirms the findings of a 2020 Trends security, cost effectiveness, mobility of use and Insight survey on construction technologies are future-proof,” says Bataw. conducted by data analytics and research firm “Most importantly, as this pandemic has shown GlobalData, which found that, of all the technol- us, the economic damage caused by long-term ogies analysed, cloud computing received the lockdowns and reduced personnel on work sites, highest proportion of respondents confirming that means that the infrastructure that support remote

MEED CONSTRUCTION INDUSTRY SURVEY 2021 Value of construction projects planned or underway What percentage of your projects involve advanced digital in the GCC and Egypt ($m) construction solutions?

1,137,378 37.5%

22.9% 20.3% 588,503

14.6%

361,174

163,284 141,791 2.1% 2.1% 69,778 46,885

Saudi Arabia UAE Egypt Kuwait Qatar Oman Bahrain Less than 25-49 50-75 per All of them Over None 25 per cent per cent cent 75 per cent

6 / Digital transformation in construction working is critical and cloud-based technologies “There is a lot of high quality local talent driving fulfil this need.” value from the tools,” says Glennon. “This is a skill- In the UAE, BIM has been used on a number set that is important when working on projects of of projects as far back as 2008 and by 2014, this scale and will continue to grow in importance major projects such as Al-Maktoum Internation- as we create our first ‘digital twins’ in the Kingdom al Airport, Palm Jumeirah and Expo 2020 were of Saudi Arabia.” mandating the use of BIM 3D, later updated to BIM 4D. COVID IMPACT In Saudi Arabia, the use of BIM is also becoming Even before the Covid- 19 pandemic, the digital more widespread. transformation of construction was already well un- “BIM been very successfully embedded at The derway in the region. But the pandemic has acceler- Red Sea Development Company,” says Glennon. ated the process. Practices forced on companies “We have seen a shift to a ‘model first’ working during the global lockdown are demonstrating the practice which has allowed us to automate a power of technology to enable remote work and number of tasks, driving efficiency and data to collaboration, to streamline operations, and to improve decision making.” automate manual processes. “We are increasingly seeing this approach being Companies that have not yet leveraged technol- adopted on other projects,” he says. ogy in their businesses are likely to fall behind. “Digital transformation in the construction DATA REVOLUTION industry means that all construction companies Glennon says that data capture and data visualis- are now under pressure to evolve and adapt or ation are growing areas of digitalisation in lose out,” says Bataw. “And for the ones who have construction in the kingdom, with the use of taken up the challenge, they are realising several drones becoming common place. benefits such as increased operational efficien- He also says that Geographical Information Map- cy, lower costs, improved coordination between ping is particularly strong in Saudi Arabia. project delivery teams and much more.”

What phase of the project cycle can be most improved Biggest areas of digital investment by construction companies through digital transformation (% of respondents)? over the past two years (weighted index)?

2.76 2.71 2.66 56% Site execution 2.48

2.19 2.12 52% Design development 1.84

38% Operations and maintenance 1.46 1.43

29% Documentation

29% Pre-construction

25% Planning and briefing

BIM 15% Handover Drones 3D printing

Cloud technology Augmented realityGenerative design Mobile applications Autonomous vehicles IoT enabled equipment

Digital transformation in construction / 7 CASE STUDY RIDING THE DIGITAL WAVE

Consultant Khatib & Alami finds long-term benefits in digital solutions

hatib & Alami (K&A) was an early adop- ter of cloud computing, and found that it already had the foundations in place to respond to challenges such as re- mote working. All that was needed was Kto provide the office-based staff with a com- puter and an internet connection to ensure a 40% smooth transition. improvement in The biggest challenge for K&A was time. In- project delivery and stead of being able to pilot, test and roll out its collaboration efficiency home-working programme over several months, when using the urgency created by the pandemic demanded digital tools an immediate transition. Other challenges included the logistics of en- suring everyone had the equipment they needed, as well as fast and secure internet connectivity. It was also important to consider the human ele- ment by ensuring colleagues felt supported. ENSURING A SMOOTH TRANSITION K&A was quick to deploy remote working strate- gies, followed by an extensive training programme across its design centers to ensure digital solu- Remote working strategies tions were consistently and efficiently used for communication and collaboration on projects. The two main collaboration platforms used by Extensive design training programmes the company are Autodesk BIM 360 (BIM Collab- orate Pro formerly, BIM 360 Design) for technical Use of collaborative platforms design and Microsoft Teams for non-technical collaboration, document and project management. Change in mindsets A dedicated Microsoft Teams site was created for every project and all of K&A’s BIM families and libraries were pushed to the cloud to ensure on-

8 / Digital transformation in construction Digital tools have improved timescales and efficiency for K&A projects such as the concept design of Fahaheel Expressway upgrade in Kuwait (above)

line accessibility and production standardisation, by more than 40 per cent compared to traditional unified across all design centers. methods, resulting in higher productivity, lower Tools such as Autodesk BIM360 and Teams costs and greater consistency. played a vital role in supporting collaboration and For K&A, the past 12 months have swung the communication among K&A’s remote-working, ge- door open to greater digitalisation in the con- ographically dispersed teams. struction sector. Although it will take time to change some ele- EFFICIENCY ments of the ecosystem, the company finds that Visibility was improved for project managers, en- there has been an acceptance of new ways of suring they were better equipped to monitor and working which are likely to remain post-pandemic, control project tasks and schedules. such as holding some meetings virtually instead Although K&A’s digital transformation was al- of face-to-face. ready well underway, the pandemic was respon- At a deeper level, K&A has also observed a sible for catalysing adoption, both technically change in mindsets, and has entered dialogue and behaviourally. with some clients and partners about digital The company estimates that the efficiency of its solutions which would never have been consid- project delivery and collaboration has improved ered previously.

Digital transformation in construction / 9 CASE STUDY SEIZING THE OPPORTUNITY

Al Gurg Consultants turns to digitalisation to ensure employee safety

ne of the biggest challenges for Du- on in the process. Ultimately, says the managing bai-based engineering firm Al Gurg director, the pandemic will be seen as a challenging, Consultants during Covid-19 was creating but positive event in the firm’s history. a safe working environment for its staff “It has made us realise the benefits being lean without impacting continuity of operations and agile in our operational setup and processes,” Oand productivity. he says. “And I believe that the same will be true for Early on in the pandemic, prior to the government the wider construction industry. announcing its precautionary measures, the engi- “The pandemic forced neering firm took the initiative to reorganise work us all to do a lot of environments to ensure social distancing, and pre- things differently, and in pared IT systems in order to accommodate remote the process, we discov- working for most of its staff. ered areas of improve- The firm managed to enable over 90 per cent of ment that we didn’t its office staff to work from home a couple of weeks notice before. before the national disinfection programme started “I believe it will and work from home guidelines were introduced. encourage a lot of inno- In order to minimise contact between staff, many vation in the of the paper-based processes were shifted to industry over the com- Saud Al Gurg, Managing Director, being purely digital. One of the biggest changes the ing period.” Al-Gurg Consultants firm is currently undergoing is shifting to a full Revit and BIM 360 (BIM Collaborate Pro formerly, BIM 360 Design) cloud-based workflow. AL GURG‘S APPROACH TO SAFETY “People are always apprehensive to change in the beginning,” says Al Gurg managing director Saud Al Social distancing environment Gurg. “However, once they start to experience the improvements in efficiencies, they then buy into the new way of working.” Digitalising paper-based processes Moving the company to an integrated digital workflow has helped both both the speed and qual- Integrated, cloud-based workflow ity of work. It has encouraged people to be more collaborative and to resolve potential issues early

10 / Digital transformation in construction CASE STUDY

Al Mahsama agricultural drainage treatment, recycling and reuse plant in Al-Ismailia, Egypt ACCELERATING AGILITY

Hassan Allam Holding champions digitalisation Engineer Aly Kouriem, Group IT Director, Hassan Allam Holding

holistic business response to the Cov- The company also had to find ways to support id-19 pandemic has enabled Egypt- collaboration and the secure sharing of project based Hassan Allam Holding to be more data among different teams that were not physi- agile, more efficient and more profitable. cally placed together. In common with almost every large- “We responded by expanding and promoting new Ascale organisation around the world, Egypt-based intelligent and innovative solutions to ensure agile engineering company Hassan Allam had to adapt business processes,” says Hassan Allam Holding quickly to minimise the disruption to its operations Group IT Director Eng Aly Kouriem. caused by the Covid-19 pandemic. Kouriem says that the new technologies activat- At the top of the list of challenges was the need ed across the company covered the internet of to respond to the sudden surge in the number of things (IoT), virtual/augmented reality, 3D printing, staff working from home during lockdowns. This and business information online dashboards. Cru- created an immediate need to provide remote cially, the new technologies were integrated across access to a large number of business applications the company’s projects and subsidiaries. and online meetings, as well as raising awareness As well as expanding digital services to enable among users of the potential cyber security risks day-to-day operations such as video conferencing of working through the internet. and activating new security management cloud

Digital transformation in construction / 11 The National Museum of Egyptian Civilisation, solutions, the company introduced processes “For sure the success that has been achieved aimed at ensuring continuity on project activities. during the pandemic will have a powerful impact on “These new technologies have supported the the business operations of Hassan Allam Holding Hassan Allam engineering workforce to manage, and its competitive advantages against its com- monitor and control project progress accurately, petitors,” says Kouriem. “Due to the pandemic, plan more effectively and also to take the proper Hassan Allam Holding transformed to be more agile, corrective action remotely and swiftly,” says Kouri- more efficient in utilising business resources, and em. “We accelerated the digitalisation of our engi- more effective in building on available capabilities. neering works using the BIM technologies. And we Meanwhile, Hassan Allam users have become enabled the cloud migration of projects’ data using more knowledgeable and educated about new the Autodesk BIM 360 (BIM Collaborate Pro former- technologies, business solutions and, most impor- ly, BIM 360 Design) platform in order to keep the tant, about their duties regarding security threats continuity of our engineering production of works.” and vulnerabilities.” A single cloud-based repository of engineering data and project documents has enabled greater ENSURING A SMOOTH TRANSITION collaboration with other project stakeholders. “Hassan Allam Engineering & Construction en- gineering teams have accessed the BIM models 7,000 working-from-home employees remotely from their homes,” says Kouriem. “This supported us to meet the deadlines of our com- 5 million remote working hours mitted deliverables”. Kouriem says that Covid-19 has accelerated a digital transformation that was already underway at Increased profit during the pandemic Hassan Allam, and he says that the benefits of the digitalisation will continue long after the pandemic. Zero remote working security issues

12 / Digital transformation in construction NEXT STEPS DELIVERING DIGITAL TRANSFORMATION Government mandates and contractual requirements may be required to drive transformation in the construction sector

round the world, architects, engineers, progressive industry. This involves engaging with contractors and asset owners are recog- key stakeholders from governments and clients to nising the benefits of digital technology contractors and suppliers. and are innovating not only in the way Industry events such as conferences, think that they deliver work, but also how they tanks and workshops can be used to reach out to Awork with each other throughout the entire pro- lagging markets, while social media can be lever- cess. The uptake of digital technology in con- aged to enable networking and the development struction however is neither universal nor com- of contacts. plete across the region. The sharing of information, knowledge and suc- MEED’s survey of construction professionals cess stories can foster an atmosphere across the showed that 30 per cent of respondents felt that industry and align peoples thinking. there was very little use of digital solutions – BIM, cloud-based project management platforms, gen- MODELLING SUCCESS erative design or drones - on construction pro- Despite the drive to diversify economies in the jects in Egypt, while a mere 5 per cent said that region, project spending remains heavily reliant they had knowledge of projects that mandated on government spending, which is underpinned the use of technology. by oil revenues. Even in the UAE, which is viewed as the regional Since the sharp fall in oil prices in 2014-15, there leader in terms of the digital transformation of have been massive cuts on project spending construction, only 18 per cent of respondents said across the region leading to intense competition that BIM was established and mandated on most and increasingly slender profit margins at con- projects in the market. struction companies. Given the benefits to efficiency, quality and In this economic climate, it is difficult to persuade safety that can be delivered by digitalising con- cash-strapped companies to invest in emerging struction, it is in everybody’s interest to boost technologies. While there is a degree of consensus technology adoption across the region. that increased productivity through digitalisa- tion could deliver savings of up to one third of the ENGAGING CLIENTS spend on many construction projects, hard evi- A vital aspect of accelerating the digitalisation dence of the benefits of technology is required. of construction is to foster a supportive envi- Demonstration projects driven by government ronment and communicate the vision of a more and private sector clients can be used to prove

Digital transformation in construction / 13 Image source: WAM Image source: Dubai ruler Sheikh Mohammed bin Rashid-al Maktoum attends ceremony to mark the completion of the facade on the Museum of the Future the value of innovations and share success stories through the use of shared data. Contracts are in a more open, collaborative environment. This often being written by lawyers who may not be approach would go a long way towards encourag- familiar with the technology terminology, or the ing investment. issues involved, while clients may also not suf- ficiently understand the technology enough to BUILDING A FRAMEWORK give clear instructions. In any technology ecosystem, the innovation A standardised framework for data processes comes first and legislation follows behind. But as well as skills, tools and guidance would pro- without a working understanding of the new tech- vide stakeholders with the confidence needed nology, it is impossible to understand the out- to embark on the digitalisation journey. comes and risks in order to generate an effective But, even the above actions may not be regulatory framework. enough. The construction industry is notoriously Sandboxes, pilot projects and data from more resistant to change, and it may not be possible advanced markets can provide guidance, but it to persuade sector stakeholders to invest in still takes time for governments to produce coun- new technology and update their tried-and- try-specific legislation that will ensure the safe tested processes. and fair rollout of an innovation. In this case the drive for transformation must It is difficult for stakeholders to engage in a pro- ultimately come from the top, with clear man- cess without a clear understanding of the poten- dates from governments and clients to incentiv- tial contractual risks that could arise, particularly ise digitalisation.

14 / Digital transformation in construction ABOUT AUTODESK ABOUT MEED From the greenest buildings MEED has been integral to to the cleanest cars, the delivering business informa- smartest factories to the big- tion, news, intelligence and gest stories, amazing things analysis on the Middle East are created every day with economies and activities for Autodesk. Over four decades over 60 years. Attracting we’ve worked together with a key senior management our customers to transform audience through its content how things are made. and activities, MEED is a Today our solutions span media brand, publication and countless industries, empow- data business that covers a ering innovators everywhere spectrum of services which to combine technologies in inform, engage, connect new ways, unleash talent, and and ultimately support our unlock insights to make the subscribers and partners in new possible. their business development Visit www.autodesk.ae to and strategic growth. learn more Recently acquired by GlobalData Plc, MEED is now part of one of the largest data and insights solution providers in the world with the capacity to build global communities for our clients. Our purpose is to support the region’s companies to make better and more timely decisions through our innovative data solutions and grow through our com- prehensive and world-class marketing solutions. To find out more email: [email protected]

Digital transformation in construction / 15 www.autodesk.ae