How digital transformation is taking root within the construction industry
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How digital transformation is taking root within the construction industry

How digital transformation is taking root within the construction industry

The pandemic has turbo-charged digital transformation. Is the construction industry ready to harness the full potential of the available technology?

Spotting the latest tech trends is one thing, but identifying which ones can save your business is a skills set that has meant the difference between success and struggle for many companies during the global pandemic.

Technology is no longer just an industry in itself – it is prevalent in every enterprise that happens to be flourishing in 2021. It leads the way across all sectors when it comes to change, disruption and innovation. Technology and growth are inseparable.

Lockdown, as we all now know, transformed the business landscape forever. Thanks to technology, long-held practices were dispensed with while new features – most recognizably the widespread adoption of video conferencing – are now a firmly entrenched part of daily work life.

Today, cloud-based technology is a dominant force in revolutionising how businesses operate. Platform business models are transforming traditional systems in ways that just a few years ago were considered unalterable. This has been particularly exciting to see in more change-averse industries such as law, medicine and construction. For example, many surgeries and hospitals now accept communication between patients and practitioners via WhatsApp or have adopted specific apps for this function, while virtual platforms have revolutionised lengthy and costly ‘pain points’ in construction such as procurement or building site progress reports.

It’s been a long time coming for construction, which has long been one of the least digitally savvy sectors for many years. There’s no one single reason for this, instead it is the cumulative result of several factors. Multiple stakeholders – contractors, manufacturers and suppliers – whose interactions are usually brief, are generally more preoccupied with the task in hand than adopting new technologies. Paper has long been the preferred medium when it comes to planning projects. Then there is the fact that building sites aren’t usually the traditional environments for tech either: it’s about tangibles such as bricks, mortar and manual work. Finally, budgets in construction are usually allocated to construction materials, labour and so forth – digital technology simply isn’t on the radar of most developers.

However, that is changing in this region. The UAE is a country whose digital transformation has been placed at the heart of the government’s economic strategy. According to government figures, the UAE digital economy contributes about 4.3 per cent of the GDP in the UAE, which is equivalent to Dhs100bn.

With a construction sector valued at $101.45bn in 2020, digital investment funds in the region and beyond are increasingly looking at the potential represented by construction.

A report by McKinsey states that “digital transformation can result in productivity gains of 14 to 15 per cent and cost reductions of 4 to 6 per cent” – this is borne out by our experience of speaking with players within construction whose adoption of digital solutions has been implemented successfully. As with any industry though, it’s important to identify why and how technology will enhance the business. Will it save time? Will it streamline processes? Will the tech improve aspects of a process such as comparing quotes, or enable surveyors to swiftly record build progress?

For those working in construction, the challenges of digitalisation are specific, but the rewards can be great. Technology partners need to come armed with a deep understanding of the industry they claim they can ‘disrupt’. Will the technology solve a problem? There’s a lot of shiny new technology gathering metaphorical dust in a lot of construction office corners.

Tech that enhances communication between different departments, teams and companies represents a powerful and tangible tool for improvement, but hand in hand with implementing new technology comes the need to consider the workforce. Do they need to be trained? How will the time and resources that technology saves be accounted for?

With increased pressure for construction projects to be delivered on time and under budget and a shortage of skilled labour, the potential for digital transformation is still in its infancy, but an alluring prospect for innovators and investors poised to harness full advantage. One take-home from the pandemic has been that when it comes to technology is that early adoption gets you ahead of the game. The most successful businesses of the next decade and beyond will be defined by their ability to harness technology to its full potential.

Rupert Tait is the co-founder of Procurified

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