Exploring the current state of digitalisation within the UK’s construction industry, a new report from Zen Internet, the UK’s largest independent technology service provider, has found that whilst organisations are already starting to implement new technologies, cultural change is still a barrier to completely embracing technological change.
Surveying over 100 IT decision makers across the construction industry, Zen’s Bricks, Mortar and Digital Transformation report found that over half (55%) of large construction firms, and almost a third (28%) of smaller organisations are already using artificial intelligence (AI). The industry is looking at what technologies could help them in the future, with virtual reality (28%), cloud computing (24%), software defined networking (20%), blockchain (19%) and Internet of Things (17%) all seen as key to future development by those in larger organisations.
According to Tech Nation’s 2018 report, technology is expanding 2.6 times faster than the rest of the UK economy, and yet the construction industry has been slow to implement digitalisation strategies that could bring increased efficiency and collaboration as well as reduced costs. Mark Farmer’s landmark 2016 report, ‘Modernise or Die’, warned that failure to innovate poses a serious threat to the UK construction sector. Later, the Construction Leadership Council published its construction sector deal with a focus on transforming the industry through a ‘bytes and mortar’ approach to smart construction.
Driven from top down, but challenges remain
Digital transformation appears to be a strategic priority for the leaders of construction firms, with CEOs (52%), CIOs and CTOs (32%) amongst the biggest drivers of such projects.
Despite this top down approach, cultural change (51%) is cited as one of the biggest challenges to implementing a digital transformation project highlighting the need to get companywide buy-in. This is only topped by the importance of communicating the value of digital transformation to key stakeholders and investors (62%). Nearly all (89%) companies surveyed who claimed to have already completed a digital transformation project note that cultural changes are needed from within to make it a success.
James Albiges, General Manager – Network and Communications, Zen, commented: “Initiatives such as training and upskilling will help tackle cultural change from within a business. This coupled with clear objectives and a formulated strategy will go a long way in making your digital transformation project a success.”
Failed projects can cost an average of $655,000 to the bottom line, yet despite this, almost all (86%) construction organisations surveyed overlook the importance of a good technology partner as an enabler of an effective digital transformation.
Spend money to make money
With almost all (83%) construction firms surveyed stating that they have either completed a digital transformation project or have one currently underway, over half (61%) noted improved efficiency and reduced operational costs (58%) as direct advantages. Furthermore, following the initial investment, two-thirds (66%) of companies noted a subsequent reduction in costs as a result of the new technology deployed and a third (33%) reported increased sales.
The benefits of implementing a digital transformation project can also go beyond the organisation itself, with half (50%) of respondents claiming it has enabled increased collaboration stemming from streamlined communication and networking. When progressive technology is fully embraced, a more streamlined approach to conducting business across the supply chain can be achieved.
Albiges concluded: “It’s fair to say that the construction sector has traditionally been slow to adopt change, but things have clearly moved forward in recent years, with digital transformation now a key consideration for the sector.
“But it is important to note that a digital transformation is not just a means to an end. It’s an ever-evolving process to deliver profound change, fundamentally altering much of the world around us. It is important for construction organisations of all shapes and sizes to understand what digital transformation is, and how a business can benefit from it. There’s no one size fits all approach and there are different solutions for different business needs. With the amount of technologies and number of vendors to choose from, knowing where to start can be a real challenge. That’s why it can help to find a provider that will put your organisation’s success top of the agenda and one that has the right expertise and experience in delivering successful digital transformation projects within the construction industry.”