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Digital transformation in the construction industry is inevitable. With most organizations encountering ongoing safety concerns, reducing labor productivity levels, and project inefficiencies, the need to execute the right tools in your construction business has become essential.
You need to be digitally efficient to address these workforce challenges and accomplish growth. Using digital technologies, construction companies can capture data more accurately and execute that information into project construction and plans.
This is why we interviewed Felipe Engineer-Manriquez to understand his perspective on the growing demand for construction technologies.
Who Did We Interview?
Felipe Engineer-Manriquez is an Author, Boldt Project Delivery Services Director and Construction Scrum Expert. He is also an international speaker in the industry, motivating hundreds of construction professionals.
COVID has created a pause for many construction professionals to evaluate how they get work done. Many projects were never interrupted by the pandemic, and still, millions across the United States shifted to temporary work from home or hybrid working arrangements.
Those with good communication protocols and habits easily adapted, and those that didn't struggle saw major dips in productivity. I see a growing trend of many small to medium construction companies investing in digital transformation strategies and tools. This is true even among design firms, not just trade and general contractors.
To remain competitive, companies must adapt and evolve their analog processes to keep up with the more rapidly changing environment. Some firms used to track profits and costs quarterly. That approach worked when commodity prices were stable throughout the year.
Today as you can see, the parallel in gas prices, 90-day old prices are different enough to make the difference in winning a project, accurately reporting costs, or cash flow to make payroll. Some companies have already shifted to digital solutions for cost tracking and now review and adapt based on daily profit and loss reports that are kept in near real-time.
The biggest challenge is the awareness that the change has occurred. There are numerous examples of multiple-generation companies where the leaders are at or very near retirement age. They haven't managed and led projects over the last decade and have seen firsthand how the environment has changed how projects are managed.
Most executives are not hands-on with the latest tools inside their companies or familiar with the off-the-shelf technology solutions employed by more sophisticated construction organizations. Don't incorrectly assume that a firm with an IT department is keeping up either.
Many large contractors have IT systems dating back to the late 1990s that are kept alive by large teams of developers that struggle to keep pace with just the updates made by the commercial operating systems like those from companies like Microsoft. On the people's side, many projects are being led and built by members of four generations; Baby Boomers, Generation X, Generation Y, and Generation Z.
Each of these groups has a different set of norms, communication preferences, and comfort with technology. Construction has been a laggard of productivity since the 1970s, and many of the methods used are very labor intensive as compared to other industries like tech, manufacturing, retail, and even agriculture.
A large talent gap exists, and millions of open roles take six months or longer to fill at companies that have been struggling to hire since before the pandemic. Attracting and retaining talent is a major concern of many construction executives. Attracting and onboarding talent will remain a major challenge in the near future.
Big data and the Internet of Things are the next frontiers for construction. Many believe artificial intelligence is the next wave, but that needs a foundation in turning the analog world into free-flowing digital information first.
One hundred years ago, projects were managed with paper and pencil, designed by hand, and built with extremely skilled craftspeople, and all managed by the Master Builder. Today projects are designed with computers, modeled in 3D, and managed with computers, including cloud-based collaboration software run by subject matter experts and narrow roles of responsibility.
Project durations from then to now are nearly identical. Some new Agile trends have emerged in how project management systems engage the people, scope, and technology to design and build projects. Some notable frameworks that measurably improve project success in terms of speed, cost, and quality include Last Planner® System of Production Controls, Scrum, and Takt Planning.
These methods alone or in conjunction with each other reduce project costs, improve quality, and have overall project durations 25% or more faster than conventional project management methods alone like critical path method scheduling or standard project management practices.
I see the industry exponentially increasing the flow of information and raising the bar on productivity and talent retention. There are already trends occurring that shape my opinion of this, including the fact that most employees, according to LinkedIn data, are changing companies every 2-4 years.
Trade and industry groups are also becoming more prominent using social media, as evidenced by online engagement and larger attendance at industry conferences ranging from AGC, CURT, IGLC, and the Lean Construction Institute.
This mixing of professionals engaged in improving the industry is growing every year, and we will reach a tipping point that raises the standards for how projects are developed and delivered. I'm very optimistic about the future, and the speed of change is only getting faster since I joined the industry over 25 years ago.
We create the future.
Set direction, provide support to achieve the goal, and keep learning. This is my approach for iterative improvement, no matter how big or small the goal.
Felipe Engineer-Manriquez is a best-selling author. He has been a proven construction change-maker from million to billion dollar-sized projects and companies worldwide implementing Lean and Agile practices.
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