Article

Technology Disruption in AEC

Is technology spoiling your day? Perhaps it’s time to think differently…

Historically seen as a technological backwater, the Construction [AEC] industry sector is coming to terms with some of the most significant opportunities for change in living memory. The potential for these new and disrupting technologies may appear to be game-changing, but when faced by the opposing challenges, may actually end up as life-savers. If construction companies are hoping to thrive in this new digital era, they must first survive.

So what are the big challenges? Shrinking life spans of structures, suggest that both usage and tastes have changed. Built assets are now better managed, and their environmental and financial efficiency are known quantities. The less successful buildings are being replaced with more modular, multi-functional ones, and more quickly. This combined with changing lifestyles, expanding population and increased urbanisation are bringing pressure onto all areas of the sector from house building to utilities as well as local government and unitary bodies. The rising cost of materials, higher standards of construction and fewer people available in the labour market (attributable to both an aging workforce and poor attraction), appear to be combining for a perfect storm. As the Farmer report states, it’s time to modernise or die.

The response from the industry has been one of steady, if unremarkable change. The profile of companies has shifted slightly away from the smaller SME type, and bigger multi-talented companies are starting to dominate. Joint ventures and partnerships, previously the preserve of big civils projects, are becoming more common-place as partner companies pool their talent and crucially spread their risk. On the employment side many companies in the sector are at the forefront of diversity and inclusion as they seek to involve people from all walks of life in the seemingly ever expanding need for talent.

So, how should emerging technologies be best adopted by an industry that is not always quick to embrace change? Let’s begin by looking at some of the high level challenges to new technology. As with any disruption it is the change that is often the hardest for people and organisations to absorb. Typical refrains might be “What’s in it for us”, “how do we make this stuff pay?”, “we’ve always done it this way, why change anything” and “we’ve seen it all before, haven’t we, this stuff will only go on to fail?”

These statements contain more than a grain of truth. But these need some serious debunking now or we risk what many observers refer to as a terminal ‘lock-in’. Change is one of life’s constants, but ask yourself, have you ever felt you were on top of change in your organisation and truly in control of everything? So just why is the current wave of technology being spoken about as it is? Are we truly entering the fourth industrial age?

The underlying suggestion is that it is the rate of change that has changed. Things like innovation, rapid prototyping, lean iterative process design, agile skills and citizen design are about taking a human centred approach to uncover unmet needs to develop potential new solutions, and to do that more quickly than ever before.

"Never in human history has the present been more temporary" - Gerd Leonhard

Think about it, todays best consumer products all have their own weaknesses, but as the history of iPhone development has taught us, people will accept imperfections if the product delivers on more of their needs right now. It is in the nature of humans to accept the ‘nearly right’, rather than wait for the ‘really right’.

So what are all these new technologies? Things like virtual reality, drones, robotics, wearable tech, mobile tech, blockchain and machine learning represent something of the candy-store of choice out there.

Technologies in the current wave, including those above, can be split into three broad categories:

AI
This is anything ‘smart’, or ‘learning’ or ‘autonomous’.

Immersive
Which can be anything that talks about a ‘reality’, human brain interaction and physical augmentation.

Platform
Is anything based on large scale computing power and support such as the Internet of Things (IoT) or quantum computing.

Having a good range of initiatives is important as technological change is absorbed by companies at different rates. You should always keep your eye out for the quick wins, but be very aware that the path of progress can be longer than you anticipated! This rate of adoption can be tracked and categorised. Which one does your organisation most resemble?

Innovators
These are the very first to experiment with a new technology when standards don’t exist, but bugs certainly do

Early adopters
Not necessarily on the bleeding edge, but among the first 15 percent to start using a technology in its early days

Early majority
Describes the group who adopt a newish technology before 50 percent market uptake. Not trend setters, but still getting in early before it became mainstream.

Late majority
Describes the group that adopts a technology once it's established (and perhaps a bit cheaper) and used by the majority of a given population

Laggards
Comprise the group that for one reason or another refuse to start using a technology even though almost everyone else has been using it, perhaps for years

It will come as no surprise that ‘laggards’ are almost the biggest group, but within the Construction sector there is plenty of good innovation going on. But innovation is nothing without transformation.

Transformation is about finding ways to improve business performance through technology. You should spend time to fully understand the business process you are about to change. Check its alignment with the strategy of your business, challenge assumptions and ask those difficult questions. Always talk about the business benefit of the change you are proposing, try to remain impartial and pragmatic, and always communicate in a positive way.

Final Thoughts

The industry is currently teetering towards something that might turn out to be a real recession. With construction output steadily falling and the impact of Brexit on our long range order pipeline and supply chains not fully understood. The outlook is certainly a challenging one.

But there are many opportunities too. Saving on waste, both physical and time within the whole construction process, will improve productivity and unlock billions. Rapid adoption of new innovations, techniques and technologies will create class leaders who will go on to dominate key activities. New ways of thinking, such as more joint venture partnering will ensure that the right specialists are engaged, and when allied to good, efficient contract management should reduce the financial risks and administrative burden to all partners in the chain.

So our advice is to be ready for anything, back your people and their ideas, be open to R&D as a principle and work out how to best finance and afford it. You need to support and embrace a fail-fast culture for smaller projects and endeavours. Also look to join special interest groups who are trying to move forward with technology for the greater good of their membership.

Gone are the days when your company has all the resources it needs in house. It's time to work together, collaborate around ideas and use technology (accepting all its imperfections) in order to deliver better products and services into our sector in the longer term. Remember, many of the technologies out there are no more than ‘tooling’ and all the things that make up the real value of your company, such as people, brand and culture are the true constants in what will become a very variable world.

Is the cloud secure enough?

24 January 2019 , London Office

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