THIS is the era of disruption. Long-stable business models are crumbling. Transformative new tech has made operations faster and more efficient, forcing giants of industry to pivot—or perish.
Yet the construction sector has stood conspicuously apart from this trend. In a report released last year, KPMG noted that only 8 percent of construction and engineering firms are “cutting-edge visionaries,” with 69 percent considered “followers” or “behind the curve.” In general, contractors have been slow to change tried-and-true techniques, resisting the winds of change like so much steel and concrete.
But the sector's foundation has started to shift. 3-D building information modeling (BIM) has endeared itself to a new generation of construction project managers who have used it to improve communication and reduce risks. An obvious next step for many forward-thinking firms is moving to 4-D and 5-D BIM, which incorporates schedule and cost data, respectively. (See “Now You See It,” page 33, for an up-close look at 4-D.)
The real revolution is yet to come. Augmented reality (AR), virtual reality (VR), the Internet of Things (IoT) and artificial intelligence all promise to disrupt the construction project landscape, boosting organizations brave enough to be early adopters.
“Implementing technology successfully can create bold new business models, competitive advantages and increased agility,” says Colin Cagney, director, KPMG Major Projects Advisory, Seattle, Washington, USA. “Contractors that can demonstrate they are cutting-edge increase their chances of working with sophisticated owners.”
KPMG reports that competitive pressure and market forces are key drivers for innovation—and the construction sector can expect both in the near term. As the global economy remains sluggish through 2017 and beyond, project sponsors likely will choose to work with contractors who can give them more for less. Yet, cost and schedule overruns are the norm on construction projects. Large initiatives typically take 20 percent longer to finish than scheduled and close up to 80 percent over budget, according to McKinsey & Co.
In Singapore, where 2017 GDP growth is expected to be at or below the 2016 rate of 1.8 percent, organizations have started to ditch the status quo in favor of tools that help cut costs and boost project productivity, says Nirbhik Sengupta, PMP, head of civil engineering, Tiong Seng Contractors, Singapore.
“During downturns, the most innovative ideas come into the market,” Mr. Sengupta says. “These are the times when the push for technology to improve the situation actually happens.”
“Implementing technology successfully can create bold new business models, competitive advantages and increased agility.”
—Colin Cagney, KPMG Major Projects Advisory, Seattle, Washington, USA
PHOTO BY LAURYN ISHAK
“During downturns, the most innovative ideas come into the market. These are the times when the push for technology to improve the situation actually happens.”
—Nirbhik Sengupta, PMP, Tiong Seng Contractors, Singapore
Slow Change So Far
Global engineering and construction companies have started to evolve. But the real tech revolution remains on the horizon. KPMG's Global Construction Survey 2016 found that:
61% use building information modeling on a majority of their projects.
42% use drones to monitor construction status.
30% use robotics or automated technology.
29% use mobile technology routinely on all projects.
17% use smart sensors to track people on-site.
For a tech investment to deliver strong ROI, it must first be aligned with business needs, says Mr. Sengupta.
“The benefit must be in terms of safety, in terms of cost,” he says. “Productivity and safety should be improved and rework reduced. If there are improvements in these areas, then it's automatically transferred as a benefit for the organization.”
For instance, innovations such as VR and holograms can help streamline communication and reduce the likelihood of schedule delays. The latest headsets and apps layer project information on top of 3-D building models, making it easier for project teams to communicate their plans to clients and project sponsors.
While his company is not yet using hologram technology, Steve Moore, PMI-SP, PMP, division scheduling manager, Robins & Morton, Birmingham, Alabama, USA, believes it also has the potential to help nontechnical decision makers identify issues and offer more informed approvals faster.
“We're going to be able to have the project sitting on the plan table in hologram form, and if you're wearing the glasses you can watch it be built,” he says. “I really feel that's a direction that scheduling needs to go—more visual and easier to absorb and understand quickly. The technology is almost there and should soon become commercially available.”
In Singapore, Mr. Sengupta says virtual design and construction tools are already making headway in the local construction market. The government has played a large part in spurring this progress, offering training courses through its Building and Construction Authority (BCA) for professionals who want to get up to speed on the new tech.
“The BCA has set up a studio for the virtual design and construction (VDC) program,” he says. “As such, VDC and BIM have gained momentum in the local market.”
Mobile devices and IoT tech also have the potential to accelerate project timelines and reduce delays, says Enda Casey, virtual construction planning manager for London Bridge Associates (LBA), London, England. His company has begun to automate the data collection process on its London Underground rail projects by placing smart sensors on equipment and tracking performance in real time. LBA also has digitized manual data collection, giving project managers mobile devices they can use to update project statuses while they're in the field.
“We're going to be able to have the project sitting on the plan table in hologram form, and if you're wearing the glasses you can watch it be built.”
—Steve Moore, PMI-SP, PMP, Robins & Morton, Birmingham, Alabama, USA
“You are able to control your schedule in real time using the on-site technology,” Mr. Casey says. “The database can be set up in such a way that if it finds a problem in the data, it can alert the senior management team to intervene.”
From monitoring inventory levels to predicting when a machine might need preventive repairs, IoT networks can take a lot of the guesswork out of risk management. Connected machines will also be able to improve asset use and make work sites safer by ensuring regulatory compliance, says Tushar Shah, PMP, service delivery lead, mobile apps and software development, Atlas Copco India Ltd., Pune, India. Smart sensors can streamline supply chain management as well, he says.
“IoT will help with the efficient routing of components and deliveries by avoiding delays due to traffic jams and weather conditions,” he says. “It will support smart inventory control.”
“IoT will help with the efficient routing of components and deliveries by avoiding delays due to traffic jams and weather conditions.”
—Tushar Shah, PMP, Atlas Copco India Ltd., Pune, India
The proliferation of smart sensors in existing buildings also can help to optimize design, Mr. Casey says. “If you have data from an office block that's in operation, you can give that to your designer,” he explains. “You might find, for example, that not all desks are in use. You can use that data to figure out how to make the building more efficient.”
FACING THE UNKNOWN
Tech innovations can drive significant performance improvements—if organizations have the right people implementing them. And that's a sticking point for some construction and engineering firms. For instance, many respondents to KPMG's survey believe they lack the skills to implement and provide useful insight from the deluge of data smart networks deliver, Mr. Cagney says.
“It's often difficult to quantify the positive impacts on performance relative to the more clear cost and risk,” he says. “This makes it difficult to develop a sound ROI decision.”
This concern is acute for smaller firms that operate on a tight margin, Mr. Casey says. When his firm adopted 3-D modeling software, for instance, leaders worried the technology could turn into a wasteful time suck.
PHOTO BY LAURYN ISHAK
“If there are improvements in [productivity and safety], then it's automatically transferred as a benefit for the organization.”
—Nirbhik Sengupta, PMP
“If our people are not on commission, then we're not generating revenue,” he says. “So how do we change our business?”
LBA's answer was to ask Mr. Casey to serve as an early adopter—and see if he could find a way to effectively use BIM in the business. He started by creating simple 3-D models in the office where his colleagues could watch his progress.
“Once I was able to figure out how to use the technology, it was a lightbulb moment,” he says. “Everyone who had been keeping an eye on me saw how I was adopting the 3-D technology to our work. People started seeing it and getting excited.”
Without buy-in and full engagement with new technology, innovations will fail to improve project delivery. So project leaders must showcase how tools will make people's jobs easier—not harder, Mr. Sengupta says.
“The most resistance comes from the people themselves, because they try to defend their existing way of doing the work,” he says. “But after the first use—if the technology is really helpful—everybody gets used to it.”
CONTROL AND CONQUER
Construction projects are getting more complex and larger in scale, which increases the risk of adopting new technology. But rather than sticking with the status quo, cutting-edge project owners are optimizing project management processes and controls to make new technology implementations more effective, according to KPMG.
“Once strong internal controls are in place,” Mr. Cagney says, “make sure your systems are related through direct connection or at least shared common data formats.”
Formal and informal training also can ensure technology is being adopted consistently across an organization. Mr. Casey says that after his initial 3-D BIM testing phase, which took almost six months, LBA was able to create a training program that gets project team members up to speed in about three days.
“We also post some of our knowledge on our shared system so people can access, for example, standard templates,” he says. “So they don't have to reinvent the wheel.”
Although no guarantees exist that rolling out new tech will produce better project results, waiting for other companies to fail first comes with its own perils, says Mr. Moore.
“There's the risk of being behind your competitors, of missing the boat, of losing your reputation in the market as an innovative company.” PM
A Smarter Future
Tech trends poised to reshape the construction project landscape:
5-D building information modeling (BIM)
5-D BIM visually ties a project's cost and schedule to its 3-D building model. This lets the project team identify, analyze and record the impact of potential changes on a project's costs and timeline.
Higher-definition surveying and geolocation
Tech that combines the power of high-definition photography, 3-D laser scanning, geographic information systems and drones can bolster the accuracy and speed of geological surveying. The 3-D images created also can be integrated with advanced project planning tools, such as BIM.
Digital collaboration and mobility
The time for paper has passed. Real-time project information sharing using mobile devices fosters transparency, collaboration, risk assessment and quality control.
The Internet of Things (IoT) and advanced analytics
IoT tech lets construction machinery, equipment, materials and structures communicate with a central data platform to track performance data. The insights gained from this new flood of information can help project teams improve efficiency, reduce delays and manage risks.
Future-proof design and construction
Innovative building materials and approaches, such as self-healing concrete, aerogels, nanomaterials, 3-D printing and preassembled modules, can cut costs and speed up project timelines while increasing quality and safety.
Source: Imagining Construction's Digital Future, McKinsey & Co., 2016
Now You See It
4-D scheduling helps project managers identify—and avoid—problems that could cause injuries, slowdowns and rework.
4-D building information modeling (BIM) layers schedule and resourcing timelines onto a time-lapse video of the project's 3-D model being built. This helps project teams identify potential conflicts, says Steve Moore, PMI-SP, PMP, division scheduling manager, Robins & Morton, Birmingham, Alabama, USA.
“A conventional schedule can get very difficult to understand if you have 100 pages of a bunch of bars,” he says. “But when you see it in a video format, it all comes together, and you can see conflicts that otherwise you wouldn't be able to see.”
For example, project managers can see when tasks that require the use of cranes are planned to happen too near to one another, which could lead to accidents or delays. When this type of concern is identified six months before it becomes an issue, the team can avoid scrambling to find a fix at the last minute.
“If you don't catch these things until right before they happen, it costs a lot more money to overcome them,” Mr. Moore says.
Robins & Morton is using 4-D BIM on a three-year hospital reskinning project that launched in August in Galveston, Texas, USA. The team is responsible for removing and replacing the exterior. The catch? It has to keep the hospital open and active during the entire process. The 4-D schedule has allowed Mr. Moore and his team to show clients when the pedestrian bridges are going up and down, and communicate exactly how and when patient touchpoints and entrances will change through-out the project timeline.
“The schedule can show how we're going to get people in and out of the building at different points, how we're going to keep people safe and how we're going to pull it off with all those moving parts,” he says.
Mr. Moore is also using 4-D on an ongoing convention center project in Miami, Florida, USA, where his company serves as the subcontractor responsible for the concrete work. A 4-D schedule allowed Mr. Moore to clearly communicate timeline concerns to the project's general contractor.
“We can show, ‘Here's what you're asking of us, and here's why it's not feasible,'” he says. “It helped us to collaboratively improve and agree on the schedule.”
In Transition
A project manager talks about technology in China's construction sector.
Technology adoption hasn't been consistent across the globe. While many large engineering and construction companies in Europe and North America have integrated 3-D building information modeling (BIM) software in some way, other regions have been slower to get on board.
Organizations in China are just beginning to move to BIM, says Chris Tian, PMP, project manager, EC Harris, Shanghai, China. He shared his thoughts on what's next for the country's construction sector.
“The Chinese government is pushing the application of BIM very hard. BIM can raise the profit of contractors by 5 to 10 percent.”
—Chris Tian, PMP, EC Harris, Shanghai, China
How is technology changing the way projects are run in China?
Throughout mainland China, we're now looking at the possibility of adopting BIM to improve performance. This is a pretty new concept. In China, there has still been no project using BIM from design to maintenance. People are talking about it, but the tool is still not widespread or fully integrated.
However, the Chinese government is pushing the application of BIM very hard. BIM can raise the profit of contractors by 5 to 10 percent.
How does BIM help increase a contractor's profits?
You can control the project much better. For instance, BIM helps you control cash flow because it tells you when to purchase materials and what quantity you need. It helps to speed up construction and reduce waste during construction.
What needs to happen to increase the adoption of BIM in China?
First, clients must acknowledge this new tech will also benefit them and be willing to pay more for the service. Second, we must have professionals who are able to apply BIM in project management. The transition will take another five to 10 years.
