Accelerating the
Industrial Internet of Things

How Digitization Is Disrupting Construction: Strategies Forward

Published on 11/22/2016 | Strategy

297 1

Michael Shomberg

Michael Shomberg is Global Vice President and General Manager for Engineering, Construction, & Operations industries at SAP. He is responsible for the company’s overall strategy for this industry, oversees the global business in the sector, directs product and solution road maps, and leads go-to-market activities.



From 3D printing to prefabrication and assembly, the digitization and industrialization of construction is already underway. Knowledge and technology developed by the other industrialized industries is enabling construction to leapfrog to the latest, proven methods at breakneck speed.

Today’s construction industry is at an inflection point. Digitization is changing everything, including barriers to entry. In the new digital world, new business models are emerging, disrupting the industry and requiring new processes for the way we work and deliver services.

Digital technologies changing the construction industry: 3D printing & IoT

From supply chain to workforce planning, digital technologies are bringing greater efficiency and scalability to the construction industry. Robotics and 3D printing, for example, require 30% to 60% less building materials and can be completed 50% to 80% faster. The market for portable and modular buildings is growing as digital technology powers faster completion rates. Portakabin, a UK-based construction company building, uses 3D building information modeling (BIM) and a factory-like setting to construct portable and modular buildings 50% faster than conventional buildings. This allows Portakabin to obtain a higher level of precision, delivering construction on time and within budget.

The Internet of Things (IoT) is powering new efficiencies and smarter asset utilization. For example, CCC, a large Middle Eastern contractor, faced weak demand in 2008. The company had two choices: become more efficient or go out of business. Today, CCC uses IoT to monitor and improve the utilization of its assets, saving approximately $15 million per year.


Digitization of construction: does your business have the right strategy?

Construction companies that shift to digital stand to realize significant gains over the competition. These are the five key areas being most impacted by digitization and industry transformation:

1. Expertise and knowledge

As a new generation enters the workforce and more experienced craftsmen retire, there is an urgent need to make up for the resulting experience gap. Capturing and utilizing best practices can no longer be just a goal; it must be a reality. Otherwise, accidents, rework, and delays will become more commonplace – jeopardizing safety, efficiency, and productivity.

Technology-savvy millennials expect digital rather than paper-based processes. For example, consider the knowledge and experience that helps determine the amount of consumables or small tools required for a job. This knowledge will need to be translated into a format, such as tablets, that can be easily accessed at the job site.

2. Construction sites

Many activities traditionally performed piecemeal onsite will be consolidated and moved to efficient factory-like settings with safety and equipment availability greatly improved. The use of modern, lean techniques, including a major role for robotics, will improve quality, greatly reduce waste, and improve costs and schedules

Prefabricated “Lego-like” components will be produced with great precision and transferred to the job site. Here, 3D models and wearable technology will direct “skilled-enough” labor to quickly and accurately assemble the components.

Sensors gathering up-to-date information will transform the construction site, improving safety, monitoring progress, and reducing unnecessary downtime by anticipating and correcting potential problems, like a lack of materials or equipment issues.

The project status will be continuously transmitted back to headquarters to ensure contractors are paid faster and that their pay is based on progress.

3. Project collaboration

Owners, contractors, architects, and other members of the construction team will work on contracts designed to improve information sharing. They will be compensated based on the project’s success, rather than individual accomplishments. For example, project-as-the-tenant collaboration systems will be available to everyone on the project. This includes up-to-date structured (2D/3D renderings, job cost, etc.) and unstructured (documents, procedures, manuals, etc.) information.

With project collaboration, case studies show that change orders can be virtually eliminated. RFIs will document decisions already reached in the field. Under this new digital model, trust and respect are commonplace, driving the shared stakeholder collaboration that is paramount for greater success.

4. Skilled labor network

Labor unions are evolving. A digitally networked workforce may replace some aspects of their role. Skilled craftsmen and staffing firms will post online for available jobs with large contractors. Contractors, in turn, will be able to compare the costs, track record, skill set, availability, etc. of every person before the hire, similar to Angie’s List in the consumer marketplace. Pre-negotiated contracts based on volume and certified suppliers will save contractors time and money. An Uber-like availability and simplicity will be accompanied by reliable feedback.

Unions, in turn, will implement new training programs to help members better understand these new technologies and enhance skill level.

5. Commissioning and operations

The handover of critical information from the construction phase to the operational phase will occur seamlessly and without having to re-enter the information into asset systems.

BIM data is linked to the ERP and project management information, providing visual components throughout the process that will help minimize errors and costly rework.

Information captured in the design phase will have a common thread that will be used to populate the information in the asset management systems.

Equipment installed in the construction will have information on warranty and maintenance stored in an open network that operators will be able to access well after the construction phase is completed.


Next steps: moving towards full digitization

The digitization of expertise and knowledge, intercompany collaboration, commissioning and operations, and the construction site as a whole demands new business models and construction methods. Companies must be prepared to embrace these changes or risk being out-performed and out-innovated by the competition.


You can find the original article here

Feature New Record