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Digital transformation to help grow construction sector's financial returns, value

The digital transformation of the construction sector involves the integration of physical and virtual processes and workflows, and will provide between 12% and 16% cost savings over the lifespan of a project, as well as potentially doubling the margins companies are able to achieve.

The construction industry has various technologies and processes, but, while they are digital technologies, they do not represent the digital transformation of the industry, University of the Witwatersrand School of Business chair of digital business Professor Brian Armstrong explained during a July 7 webinar.

International body the World Economic Forum has reported on case studies of the construction industry showing that projects that leverage data and tools to perform lean execution, mitigate and manage risks and support operations and maintenance resulted in a 15% cost savings over the lifespan of a 10 000 m2 vertical office project, with 12% in costs saved during construction and 18% during the operation of the building.

Similarly, a 100-km-long highway that leveraged integrated digital systems will result in cost savings of 16% over the 35-year lifespan and about 20% lower costs during the construction phase.

An industrial complex construction project using data-driven construction and planning, and digital technologies to support operations, will result in a 12% cost saving over the lifespan and 14% lower costs during construction.

"Firms that digitally transform will enable efficiency and quality gains, and this will result in a reshuffling of competitive positions of companies in the sector. An increase in competitiveness will also contribute to greater market influence and market power," Armstrong said.

Material savings in an industry with historically low margins would be transformative, he added.

"Digital transformation means investment and greater effort and there is a need to have people focused on the task in dedicated teams, as well as invest in the foundational digital platform," said Armstrong.

Information and communications technology skills would be required, but it was important that engineers and professionals had good, traditional capabilities and were comfortable and familiar in the new digital world, and understood how digital tools could help them do their jobs differently and better, he pointed out.

"Skills can be acquired by implementing the foundational systems, such as a digital platform, and putting the theory and vision into practice. This is where to start on the way to full modelling of projects, including plan, design, build and operation, which provides the ability to implement changes more effectively and earlier in the cycle and thereby decrease costs and risks."

Professionals in the sector should be part of the digital transformation process and should understand why the company was pursuing digital transformation and the associated changes to their work practices and the development of new habits.

"The key benefits of a digitally transformed company are not the successful installation of a system or its operation, but how the business benefits from its use by its professionals to respond to new requirements," construction multinational Stefanutti Stocks information technology operations project manager Alfred Agei commented.

Stefanutti Stocks moved its digital resources to the cloud over a three-year period and realised unforeseen benefits when restrictions to movement of people to combat the spread of Covid-19 forced a work-from-home situation to which it was readily able to adapt, he said.

Meanwhile, there were also differences in how digitally mature parts of the construction value chain were, and this was a challenge for transformation of the industry, said Stefanutti Stocks group information technology GM Kevin Wilson.

"Stefanutti Stocks' approach is to provide a suite of tools for each project that all willing partners work with, while less digitally transformed stakeholders can rely on their conventional processes, such as paper-based processes. The suite of tools are set for the duration of a project, with new tools and capabilities added to subsequent projects.

"Before the start of new projects, we first engage internal and external stakeholders about the new toolset and how we foresee its use throughout the duration of the project," he pointed out.

Additionally, he said, in some cases, innovation came from the use of digital tools and by professionals on site who identified problems and suggested various ways to leverage technologies to solve them. In other cases, the company identified problems that it then matched to new technologies to solve the problem.

He noted that there must be a feedback cycle and that new uses led to additional uses of systems, such as drones used originally for mapping that could be used for aerial views of a project or to do inspections for record of progress.

The specialists spoke during the official launch of the construction software multinational RIB CCS MTwo construction industry digital platform on July 7. Local construction software company CCS has been acquired by Germany-based construction software company RIB, and an international version of the MTwo cloud platform will be launched during this year.

The MTwo platform is a cloud-based platform designed specifically for the construction industry by experienced practitioners in the industry, and provides different functions as modules that can be used as needed by the company.

"It is designed according to five-dimensional building information modelling principles, and has artificial intelligence and business information systems that users can leverage, said RIB CCS CEO Andrew Skudder.

The platform serves as a single repository of data that can be analysed and used to inform actions and decisions. It can integrate with a variety of digital tools, including three-dimensional design tools, and has more than 2 000 open application programming interfaces that users can leverage to collect additional data, added RIB CCS sub-Saharan Africa head of sales John Gilbert.



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