Eight Out of Ten Owners Know the Secret: Connected Construction Is Here
by Chris Bell | April 13, 2022
There’s a common misconception that construction is one of the least digitally innovative industries.
At Trimble, we’ve specialized in bringing innovative digital solutions to the construction industry for more than two decades. We simply couldn’t reconcile this technology-laggard image of the construction industry with the massive amount of innovation and the billions of dollars of venture capital flowing into construction technology we’ve witnessed in recent years — so we did our own research.
Along with Dodge Construction Network — an independent research consultancy and thought leader in the architecture, engineering and construction industry — we surveyed construction project owners impacted by the $1.2 trillion Bipartisan Infrastructure Law. The result is a comprehensive report that shares the true state of the industry when it comes to digital transformation. Our findings were remarkable.
Phase 1 of Digital Transformation is Underway
One of the most illuminating results from the report is that 85% of construction project owners surveyed have begun their digital transformation journey. Their starting place has been to make meaningful productivity improvements by digitally transforming internal workflows — the areas over which they feel they have the most control.
85% of construction project owners surveyed have begun their digital transformation journey.
These initial efforts are focused on reworking existing processes that most contribute to schedule delays, cost overruns, quality deficiencies or safety incidents. Owners have done very well in digitally redesigning and reengineering these workflows to generate greater efficiency and productivity. We call this Phase 1 of the transformation.
59% of owners have frequent breakdowns in communication between themselves and other project team members, and less than half (45%) are satisfied with their connectivity with those external companies.
The Next Horizon: Phase 2
Digital-first owners have now moved on to Phase 2, where they’re looking beyond the walls of their own organizations to find opportunities to transform external workflows in the supply chain. This includes reaching out to general contractors, construction managers, engineering and design firms, architectural firms, and material suppliers to identify the highest-friction intercompany workflows. We learned that 69% of surveyed owners contractually require their contractors to use digital documentation and practices.
Six Sigma analysis reveals that the foremost opportunity for launching Phase 2 of the transformation is through improving the flow of communication and data between owners and contractors — especially in workflows related to on-time, on-budget project delivery. The report shows that 59% of owners have frequent breakdowns in communication between themselves and other project team members, and less than half (45%) are satisfied with their connectivity with those external companies.
What might be surprising to some is that the greatest opportunity here is in digitizing cost-related workflows — specifically, processing change orders and accelerating payments. Of those who’ve made these connections, 89% are using digital workflows for invoices and approvals and 88% are using digital workflows for both change orders and budget approvals. Transforming these two workflows is creating value for both owners and contractors, so it’s a win-win. To learn what other digital workflows are enhancing the process for owners, download the full report.
Why Digital Transformation is Crucial
Currently, there are two very powerful marketplace forces affecting the construction industry:
1. Project volume is growing exponentially and rapidly. According to a recent customer survey, 87% of project owners anticipate substantial increases in project volume over the next few years, largely due to the influx of $1.2 trillion in federal funding. This funding has a substantial and cascading effect on the marketplace, as slated infrastructure projects spawn additional demand for restaurants, hospitals, schools and so forth to support a growing and migrating population.
2. Massive labor shortages are pressuring the industry to do more with the same level of resources. With the combined impact of supply chain issues and related inflation, the costs of projects will grow exponentially. Owners will need to look for every opportunity to reduce costs and streamline workflows. The need to work smarter, not harder, will be more important than ever. Digital transformation is the path to accelerated, efficient, less-costly productivity.
Owners Must Take the Lead
Owners of construction projects are the leaders in this transformation. You, more than anyone else, have both the broad insight across the ecosystem and the sanctioned authority to champion a digital transformation that will help bring your projects to a close on time, on budget again and again—even as circumstances evolve in the marketplace.
Wherever you are on the spectrum of digital transformation, there’s no better time to begin, or to expand your efforts, than right now. If you’re using manual processes, there is an abundance of tools available that can help you make an easy transition to digital. If you’ve digitized in some areas and not others, or if your efforts aren’t yet structured for construction project management, it’s time to take things to the next level.
Examine your workflows and look for your own low-hanging fruit (Phase 1). If your organization has fully adopted a digitized project management information system, you’re ready to turn your focus to transforming intercompany workflows (Phase 2).
Five steps to accelerate your transformation
1. Connect your internal workflow processes.
2. Focus on first-value areas of design collaboration and budget estimate approvals by improving stakeholder integration.
3. Extend your connectivity to external teams as your digital maturity grows.
4. Optimize workflows in cost areas, such as payment applications, change requests and closeout.
5. Share your successes all along the way, both internally and externally, and build momentum until all of your workflows are fully digital and connected.
Choose a strategic partner
Our mission at Trimble is to transform how the world works and help organizations bridge the divide between the physical and digital worlds. We have a material interest in helping all of our clients — owners, contractors, designers, architects, engineers and suppliers — take advantage of the productivity gains that digital transformation affords.
By partnering with Dodge Construction Network, we’ve been able to provide an authoritative state of digital transformation for owners in the construction market. In doing so, we hope to ground you in your current state and shine a light on your future direction. For more details, read the complete Connected Construction: The Owners’ Perspective SmartMarket Brief report.
We invite you to engage us in a conversation to begin your digital transformation journey. Based on our 25-plus years of expertise, we can assess what digital workflows will make the biggest impact for your organization—combined with our strategic advice on how to develop your transformation concept, we can bring value to your organization within the first 30 days of engagement.
Finally, if your firm is part of the infrastructure community, there could be a significant financial opportunity waiting for you. As a public agency, you could be eligible to have your digital transformation fully funded through the American Rescue Plan Act, another state or local relief fund, or the federal infrastructure fund.
Digital transformation in construction is no longer theoretical — it’s the de facto industry standard. Get started on your journey and lead the way with digital transformation.
Key Topics Covered: connected construction