Understanding the digital opportunities in construction

By Daniel Cashmore
The construction sector has traditionally been relatively slow to invest in research and development. Digital technologies provide new tools and techniq...

The construction sector has traditionally been relatively slow to invest in research and development. Digital technologies provide new tools and techniques that are set to fundamentally reshape the industry for years to come. Is now the time to look again at R&D programs to embrace valuable digital opportunities? What new risks arise from their use?

The future landscape today

In very simple terms, the opportunities present themselves in one of three broad categories:

Firstly, knowledge management encompasses the collection and analysis of electronically generated data, typical examples being the use and increasing sophistication of BIM and tracking of plant, materials and labor.

Secondly, efficient construction includes the improvements or changes to the construction process itself with examples in the market today including off-site manufacture, 3D printing and automation of plant.

Thirdly, whole life support covers the use of incorporation of technology into the development as a whole, from inception to demolition and re-use. Typical examples are detailed monitoring of the use of buildings to increase energy efficiency, and technology as an enabler for adaptation of space to meet changing needs of users. 

Without a doubt however, the greatest opportunities come not in focusing on any one of these areas or any one type of technology, but in bringing all of the different individual pieces of technology together to provide a holistic solution. This decreases risk through knowledge management, increases output and profitability through efficient construction and provides agility and adaptability through whole life support.

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Knowledge management opportunities and risks

The volume of data being produced in preparing for and carrying out construction operation is increasing if not exponentially then at a very rapid rate, which is a great opportunity for contractors.  The use of the data being generated through smart wearable devices, tracking labour and plant and site investigation and progress reporting by high definition daily drone flight, feeding in to an integrated BIM model which incorporates not only design by time and cost implications has huge potential. The data generated can lead to swift factual resolution of design and construction clashes; manage early warning of possible problems on site; automatically generate measurement and payment notices to properly reflect work carried out in any given period.

If one of the perennial problems in construction is cash flow through the supply chain, imagine an automated process with accurate measure of work, quality and effort required enabling an automated weekly payment cycle. The data being generated and the technology available now could achieve this.

There are two key risk areas around the growth of knowledge management; analytics and retention. In terms of analytics, the vast quantity of data being produced, or capable of being produced is only relevant and can only generate an opportunity if sufficiently sophisticated and reliable tools exist to hone and refine that data to a useable form. Assuming that hurdle can be cleared, the risk remains for errors in the analytics and how non-binary problems and issues are resolved. Turning to retention, the more data collected and kept the higher the likelihood that one will trespass into data protection issues or assumptions of corporate knowledge of events because the systems put in place by the company have captured and then retained the data. Imagine a drone overflying a road project alongside a residential estate, the private properties are not relevant to the project but could easily generate data protection issues for perhaps people sunbathing in their back garden or, at the other end of the spectrum, illegal activity being carried out on the site.

Information and data are not knowledge but the risk is that they can lead to a presumption of knowledge you never in fact had.

Efficient construction opportunities and risks

There is a real and imminent skills shortage in the construction industry, particularly in the UK but on a global basis as well. That shortage could be met with automated production methods from 3D printing to autonomous construction vehicles.

Automating the process adds a further opportunity to more effectively implement just in time materials ordering so that there is no longer a need for site space to be used up retaining a stockpile of materials - a real issue in the continuingly urbanised construction projects in the developed world. Outside the urban environment, the opportunities remain as longer lead times on materials can be actively managed more effectively.

There are two key risks to highlight here. First, automation can reduce agility during the construction phase. Change can be difficult to implement once a process has started. The second risk is very much based around flaws or errors in the process. Are these properly design or design coordination issues, construction issues, software issues, programming issues or something else? A clear matrix of responsibilities will be needed to manage that risk.

Whole life support opportunities and risks

Delivering a whole life project that "interacts" with its environment and is adaptable to the changing needs of business is a key driver for the Real Estate Sector as highlighted in our new 'Future proof real estate - is the property sector ready for the 2020s?'report. Reducing whole life costs and building in agility and flexibility in use, from the construction phase, must be the starting point needed to enable re-investment in more R&D improvements.

The biggest risk here is cost driven. Who provides the initial funding for bringing all of this together or do we have to accept a long slow process of attrition? With other disruptors in the market, particularly in IT and telecoms sectors, can the construction industry really sit back and not invest? The risk of not grabbing the opportunities is obsolescence as newer more agile companies develop better more market friendly and investible products for the built environment at a better margin enabling the upward spiral of improvement.

Joined-up digital delivery

The ultimate goal is to improve across all three of the areas highlighted above. Finding the tipping point at which adoption and implementation of technology becomes not only self-justifying and self-sustaining but is the driver for growth and development for the industry.

There are many macro challenges facing the industry today - from skills shortages to unsustainable profit margins to a drive to reduce construction cost and standardize approaches. Technology is not a panacea and neither is it a wholly risk-free solution of part of a solution to the changing needs of the industry. It is however a step which is inevitable and one to take positively and with one's eyes open so not be dragged along or blind run in any direction that seems shiny and new.

As we have seen in just about every market where digitalization has taken hold; from professional services to heavy engineering - standing still means getting overtaken.

Daniel Cashmore is a lawyer in the construction and engineering disputes team at international legal practice Osborne Clarke.


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