Project Management Institute

Digital Transformation in Construction

Transcript

STEVE HENDERSHOT

Digital twins. Drones. 3D printing. The construction industry wasn’t exactly an early adopter of digital transformation, but that’s changing fast as companies invest heavily in all sorts of bleeding-edge technology. That will only take you so far, though. Project teams need to be open and willing to innovate.

MIGUEL MONTEIRO

I believe we have to choose the projects that pilot innovation by selecting the teams, the persons that are on those projects. You need to have a certain drive on the people that are on a certain project if you want to implement something. If the drive is not there, if the minimal skills are not there, if the willingness to change and the willingness to develop and the willingness to advocate is not there, it’s very difficult. People need to be willing to change.

NARRATOR

The world is changing fast. And every day, project professionals are turning ideas into reality—delivering value to their organizations and society as a whole. On Projectified®, we’ll help you stay on top of the trends and see what’s ahead for The Project Economy—and your career.

STEVE HENDERSHOT

This is Projectified®. I’m Steve Hendershot. 

Digital transformation was booming in construction even before COVID. Then came the lockdowns, and many construction companies went even deeper into tech as they were forced to navigate new ways of working. 

Global real estate firm Jones Lang LaSalle estimates that three years of development and adoption got compressed into a nine-month window in 2020. Augmented reality, remote monitoring and robotics all helped teams keep smaller crews on-site—without sacrificing productivity. And there were also new digital tools for portfolio and resource planning, workforce optimization and risk management. Last year alone, investors pumped 1.4 billion U.S. dollars into construction tech firms, according to CB Insights. And that’s likely just the beginning.

Today we’ll speak to two project leaders helping guide this transformation. First is Miguel Monteiro, a project director at Besix in Dubai. He’s leading the Uptown Tower project there and spoke with Projectified®’s Hannah Schmidt about the different technologies helping the team build the 81-story building.

MUSICAL TRANSITION
HANNAH SCHMIDT

Talk me through some of the ways you’re using technology on the Uptown Tower project.

MIGUEL MONTEIRO

In our project, considering the usual pain points of a typical high-rise project, we needed to be efficient on manpower. We needed to improve and resolve a silo problem on logistics. And we needed to do something different about the way we track activities. 

Let’s talk about labor control and labor productivity. In a project like ours, we usually get to numbers between three and a half and 5,000 men on a project, on a super high-rise tower. We need to make sure that we don’t waste the precious time of people and labor, and for that, we decided to use WakeCap. WakeCap is a Saudi/UAE-based startup that came to us with an idea of putting a chip on the helmet on every worker, every element on-site. And that allows us to know the exact location of every person at every given moment in time. First of all, it allows us to know the trends of movements of people, and it allows us to understand how much time do we spend, for an example, on vertical transportation, which is absolutely key for our project. So, we know how many hours as a whole and how many hours per men or minutes per men do we spend per day waiting for the lift, waiting for the hoist or inside that same hoist. With that, we can optimize the vertical transportation strategy.

Then going to logistics, we felt that we needed to move away from the very early-stage logistic plans that we have a logistic manager on-site that manages an Excel sheet. We have 100 different subcontractors on a project like this. So, you need to have 100 different interactions in order to coordinate and organize all the deliveries and all the vertical transportation and all the cranes and so on. In order to optimize this process around one platform, we partnered with a Polish startup, which was ProperGate. ProperGate developed together with us a platform that links everyone, allows us to know every single material that comes on-site. We coordinate deliveries; we coordinate vertical transportation. And above all, we save time on every stakeholder. We save time in queues in our vertical transportation, and we have the material just in time on the work front. That is absolutely fantastic from a logistic standpoint.

HANNAH SCHMIDT 

Along with these digital tools, you’re also using an autonomous robot from Schindler for elevator shaft work. How’s that helping with safety and efficiency on the project?

MIGUEL MONTEIRO

We avoid placing men, hanging on cradles from 150 meters or 200 meters above in a dangerous environment, in a confined area that is not very ventilated and it’s really, really hot, because we are in Dubai. Can you imagine how hot and humid it’s inside those shafts? So we avoid putting men in those conditions by a machine doing it. And not only we avoid doing that, we become extremely more efficient and predictable. We know when we’ll finish. If the machine is well-planned, things will happen as planned. 

HANNAH SCHMIDT

Talking about all this technology from the digital tools to robotics, what skills are needed in order to successfully use or efficiently use this tech, such as, do you need somebody on-site who knows how to run the robot, maintenance or using these digital tools, things like that? 

MIGUEL MONTEIRO

One very basic skill—willingness to do. That’s the most desirable skill if you want to go on any innovation journey. In order to implement innovations, we need to change behaviors. We decided to have a change manager, which we call digitization manager. If we would not have these change managers, change would not happen, and we would not be able to change behaviors.

So, whenever a tool comes, there is a [responsibility] to implement the tool, make sure that the tool starts running and then transfer the tool to the operations team, but be there to support—one person, which connects with the developers, which connects with the operations and is there always to support and never lets it die. Because it’s very easy to implement something, then you move your focus and suddenly that tool dies. We need to have management buy-in, change management control, change management drive and the people as well willing to change. 

Are they digital experts? No, they are not. But we need to have some digital experts on the developer’s side. We can’t develop it ourselves. We are masons and architects and steel-fixers. We are building. But on the other side of the fence, there’s someone there to help us, and we have the change manager to change the habits from the hardcore and old-style construction to the new trend. 

HANNAH SCHMIDT

What about stakeholder buy-in for using tech in these projects? How do you build that support from that management level or C-suite level, even?

MIGUEL MONTEIRO

Short answer is with results. The big question mark is results will only come after implementation. So, in the beginning, we have to make a business case. We have to create expectations. We have to manage costs very efficiently on these tools. And then, as we gradually demonstrate results in every single step of the way, we will gradually get buy-in on those same tools and platforms. So, how did it happen with us?

We had certain tools, and we had certain problems. Whenever I approach C-suite management, I sold our ideas in order to obtain a certain gain from our investment. There was a return on investment. And the startups were not prepared to show us from what we spend, what do we get? Because they didn’t have that data. It’s very important for whoever is developing new technologies to be very aware of whenever we invest money and time, we need to convince all stakeholders on the return of our investment. And the return of our investment, it’s not time only. It’s time, resources, money. It’s a series of things and, as well, the opportunity cost on doing it elsewhere with some other technology. 

So, from the beginning, the business case has to be very well set. And the results and the quick wins have to happen and need to be demonstrated. We need to make regular presentations. We need to make regular celebrations on everything we do so that everyone understands how much are we winning with that so that people come and feel pulled with this trend.

HANNAH SCHMIDT

What value has this tech delivered to the project so far, and how is that being measured?

MIGUEL MONTEIRO

The answer to your question is very difficult to quantify, considering that we are talking about startups and we are using these tools for the first time. So, a lot of what we are doing is R&D—R&D from the software developers and R&D from ourselves. Because we don’t even know what we know. We don’t even know what we need. So, it’s very difficult to quantify what we get when, in the beginning, we didn’t know what we needed. We know we have a problem, but we don’t know how to solve, so we take a trial-and-error approach, and we will eventually get somewhere.

With WakeCap, we needed to understand where do we waste. But we could only understand where do we waste time after looking at the data. As we started looking at the data, we started verifying we are not present on the work front time enough. So, our percentage of time working on the work front is much smaller than we thought we would be. We were, at that time, at 59 percent. From 2,000 men that we have right now on-site, we were only on the work front 59 percent of our time. As we started taking actions and as we started improving the logistics and the vertical transportation, today we are at 79 percent in direct productive areas. By looking at the problem, by taking actions and by measuring every week what are we achieving, we could celebrate on a weekly basis the rate of reduction of the waste and then the increase of time in the productive area.

Now, does that have an effect on productivity? We don’t know yet. Productivity is a result of many, many different things. The first aspect about productivity is we need to be at the workplace, and that we are controlling with WakeCap. Now, do we have engineering on time? Do we have training for the people? Do we have materials on time? Do we have a method that is easy enough to execute? That is achieved through other processes that do not depend on WakeCap specifically. So, in this case, yes. How can we measure? By analyzing data, by taking adequate actions.

Whenever I’m asked, “How much have you saved by using this technology, and what’s the ROI?” What I can quantify is what we were doing six months ago and what we are doing now. And the balance between the 59 percent and the 79 percent, it’s 20 percent of my total hours. We were just wasting them, and now we are not wasting them anymore. If we multiply that by the time it costs us per hour, we’ll have an ROI, a direct ROI.

MUSICAL TRANSITION
STEVE HENDERSHOT

Technology isn’t just making project teams more efficient and resilient. Matt Gough, director of innovation at Mace in London, spoke with Hannah Schmidt about how the construction company is using tech to not just increase productivity but also to tackle global challenges like climate change.

MUSICAL TRANSITION
HANNAH SCHMIDT

We’ve all seen the numbers on tech being used in construction. What do you think is driving that growth?

MATT GOUGH

We use the Justin Trudeau quote that says that, “The pace of change has never been this fast and will never be this slow again.” And that is very much the case for technology within construction. In my experience at Mace, the touch paper was lit when the government here in the U.K. put the BIM level 2 mandate down around 2012, which was, in essence, you’ve got to digitize. And if you haven’t done that—you can’t meet these BIM level 2 expectations by, I think the deadline was 2016—then you can’t tender for public sector work. And it was a real good incentive, necessity for change and adoption. So, all of a sudden, we had our clients, and in some respects policy, asking us for different things. We had a proliferation of companies trying to sell us things, which was the existing tech providers but also an increasing amount of startups. And then we had a business which was keen to digitize and to embrace new technology, but not necessarily understanding how to do so successfully and consistently. 

The reality for any person working in the construction industry at this point in time is, how agile are you? How quickly can you adopt and adapt to the opportunity of new technology? And can you be the people that find a way to really realize the benefit of that to make yourselves more efficient, or faster, or safer, or to reduce your cost? That is happening across the entirety of the sector, not just here in the U.K., but globally. We’re in a technology race, almost, and it’s a very exciting time to work in the industry as a result, I think.

HANNAH SCHMIDT

And then there’s COVID-19. Can you walk us through how that changed things for tech?

MATT GOUGH 

For most, COVID-19 has really driven adoption. For us, I think the most important thing that it’s done is raise the awareness of what these technologies and tools can do into the boardroom because we have already a huge amount of projects putting really good work in, but the reliance on the data during the pandemic to help to manage and mitigate the risk of the pandemic has meant that those technologies and tools have become much more important to us as an enterprise. I think that’s true of many companies, right? You need that transparency and visibility of progress. You need to know how many people are on your project. You need to know what’s happening with your materials. All of that information was there, at your fingertips, but it wasn’t necessarily the most important thing, and nowadays it is.

So having proven that during COVID-19, the challenge for the sector is how do we keep that momentum and that pace up? How do you keep delivering technology with benefits that allow you to continue to capitalize on the pace and the opportunity? It’s a bit like the vaccine, right? Globally, we’re able to collaborate and partner on developing a vaccine in 12 months that would’ve normally taken the world 12 years. And that’s a real demonstration of how technology helps us.

So, what are the next big challenges that are coming down the path toward us as a society? And how do we use that same spirit of collaboration to respond to them effectively? And for us it’s quite clear what the next challenge is. It’s the climate emergency. Moving on from the pandemic, it is now, “Where do we start to focus our efforts on continuing to deliver the right value and outcomes to society?” And for us, that is very much pointed toward helping to accelerate the built environment’s response to the climate emergency.

HANNAH SCHMIDT

How are you seeing tech deliver value?

MATT GOUGH 

There’s some interesting areas that we are really trying to accelerate. One is can we use technology to reduce the requirements for people to have to travel to or to be on-site? And one example where we’ve been able to do that well is through a startup here in the U.K. called Disperse, who we work with. And Disperse are essentially an AI-enabled, 360 camera platform. How we’re using them is to go around our projects on a weekly basis and to capture photographic records of progress on-site. Each of your projects, you’ll have the floor plans, you’ll have the areas that you want to record progress against, and what happens is Disperse comes to the site, take all the photos, upload that to the cloud, the clever AI does the processing, and then our project teams get a report back on a weekly basis sharing with us what progress has taken place and what stage we’ve got to. The photographic records and the information that we have access to means that we can complete a number of the activities that we would normally need to be on projects making physical inspections for online. And we can provide progress updates to our clients and to our clients’ project managers.

And the other bit that that helps us to do, we’ve got some quite significant policy and regulation change coming here in the U.K. We had the tragedy of the Grenfell accident four years ago now. As a result of that, the industry has had to have a bit of a difficult look in the mirror at whether how we build things currently is acceptable, is safe enough, quality assured and good enough quality. And as a result, there’s going to be a number of changes in what we refer to as the Building Safety Act here in the U.K., one of which is the “golden thread of information.” We will need to be able to prove at all stages of the project that things have been scoped, designed and procured professionally, let’s say. And when you look at how the information that we’re capturing through tools such as Disperse, we’re already starting to create this really quite rich information source of the progress and the installation, quality, etc., on the projects that we are responsible and fortunate enough to build.

HANNAH SCHMIDT 

How do you build buy-in either from the management level but also on-site with the project team members? And also, what kind of training does that look like to make sure that new technologies can be introduced on-site to team members, used and then correctly executed?

MATT GOUGH 

A lot of it is about usability. We use that line, “nobody needs training in order to use Google to search for something,” right? And you want your construction technology, you want your technology that you use at the workplace, to be as simple and as intuitive and as clear and obvious as that. We haven’t really been in that space in the construction industry for many years. A lot of our, let’s say, legacy tools and software, etc., aren’t necessarily that built for usability, almost. But we’re starting to see that change significantly. 

And then the final part of this is a cultural piece. You have to create the conditions for, let’s say, innovation, right? You need to create an environment where people are empowered and able to try new things and are encouraged to do so and supported. And also an environment that is safe enough such that, if it doesn’t work, you can fail fast, you can learn from it, and you can carry on. And that more open innovation model is not something that is that common or consistently held in our industry in the past but is very much becoming the MO and how certainly Mace wants to do business moving forward.

HANNAH SCHMIDT

How can project leaders help engage their project team members when they’re working on this and engage people for adoption, for innovation, and create that mindset of willingness to try and to work to adapt and adopt?

MATT GOUGH

Our project leaders have massive responsibilities on their hands in terms of the amount of people that they have oversight for, the amount of revenue and finance, etc., that they are churning through their projects on any sort of weekly or monthly basis. So the culture in construction is quite supportive in that respect. But a lot of the time what happens is contracts and the way that things are procured kind of gets in the way and limits innovation, almost. It’s the adversarial nature of construction that I know we’re all trying to move away from, but just creating those relationships and environments where you can collaborate, and your partners, whether that’s your designers, your engineers, whether that’s your supply chain, feel like they are able to proactively challenge and try new things without fear of being penalized if that goes wrong. 

That’s the massive transformational piece in the industry. And as soon as we unlock that, we find the right way of creating enterprises and projects where people have shared ambitions, incentivization in the right way, so pain-gain mechanisms, etc., I think we will see a complete shift in terms of how projects are delivered and just how broad and deep this technology adoption can go.

HANNAH SCHMIDT

What tech do you expect to see in the construction sector in the next five to 10 years?

MATT GOUGH

We are doing some really interesting stuff around artificial intelligence and machine learning across data to make better decisions. The construction industry hasn’t got access to enough data at this point in time, so we’d need to first drive up adoption of technology. Once we’ve got it, and we’ve got consistent volume of data, how we can optimize what we do through AI is, I think, a real gamechanger at the moment.

We’re seeing a huge amount around new materials because we do need to keep building things. Urbanization and the rate of population growth means that we’re just going to keep building. New material tech that can help us with low-carbon solutions, I think, is going to be really important. 

We talk a lot about industrialized construction at Mace. We talk about moving from construction to production, and within that, how can we digitize the supply chain is an area of real focus for us and also real opportunity. That’s essentially partnering and working with our supply chain in order to help them to digitize. But also using digital technologies, whether it’s tagging and tracking the materials, tagging and tracking of productivity, etc., within our supply chain is very important.

For a long time, we’ve been quite hung up on technology in the construction sector and this kind of perceived fear. There’s a lack of digitization. There’s been a tone over certainly in the years that I’ve been in this space that we’re not doing enough, and we’re going to get disrupted. There’ll be the Blockbuster moment in construction by some big, clever tech company or what have you. And the reality is that that was a little bit of a misnomer. Technology is an enabler for the construction sector to do things better.

MUSICAL TRANSITION
STEVE HENDERSHOT

The next era of brick-and-mortar construction will be supported with a whole virtual infrastructure behind the scenes. And that future promises sturdier and safer structures—delivered with greater consistency and efficiency than ever before. 

NARRATOR

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