Digital delivery is crucial for today’s construction firms to compete, but companies need to look beyond the technology to focus on helping the people and processes that will ultimately ensure positive and sustainable change, says Claire Rutkowski of Bentley Systems.
The architecture, engineering, and construction (AEC) industry has historically been slow to adopt change – and for good reason. When you are building roads, bridges, dams, tunnels and skyscrapers, safety and compliance are paramount. If tried-and-true processes produce the desired results, why fix what isn’t broken and potentially increase risk?
However, there is mounting pressure to do things differently. Worldwide infrastructure needs are increasing, qualified employees are hard to find and harder to keep and firms are turning away work at record levels. There are three significant trends that we are tracking.
1. Strong demand for infrastructure repair and investment. The construction industry has a robust pipeline of infrastructure buildouts and spending, and the AEC industry will determine how quickly these projects get off the ground. In the United States, the Infrastructure Investment and Jobs Act will allocate $1.2 trillion to improving public infrastructure. Globally, the effects of climate change mean that infrastructure will need reinforcement and upgrades to improve resiliency.
2. Need for new infrastructure. Globally, population growth and migration, rapid urbanisation and climate change are all driving strong demand for new infrastructure to feed, house, transport and provide work and medical facilities to people in new places.
3. Shortage of qualified labour constraints. The full pipeline of projects is good news. The challenge will be for the AEC industry to deliver. The tight labour market and exiting workforce were top challenges noted by more than 82% of respondents in the Deloitte 2022 engineering and construction industry outlook survey. Especially problematic is the ability to find candidates for new digitally oriented roles, such as data engineers, data scientists, developers and cybersecurity.
Digital delivery and the promise of working better, faster and with fewer resources
Given unprecedented demand, AEC firms need to do more with less. New technology is a natural place to turn for efficient and effective solutions – and digital delivery promises the ability to work better, faster, with fewer resources and with better outcomes. Digital delivery means using models, information and supporting applications to help complete a project. For the AEC industry, it means using 3D models and data contained in a digital twin for a paperless, streamlined process, enabling collaboration across the supply chain.
According to AEC Advisors 2022 State of the Industry report, the global AEC market size for all software (not just digital initiatives) was $7bn in 2020 and is projected to reach %16bn by 2028, growing at a CAGR of 10.7% . This spending surge likely means that the AEC industry is shifting from old technology and file-based systems to data-driven, digital and model-based technologies.
The same report found that, on average, CEOs believe within a generation that half of their firm’s value will be attributable to digital transformation. To capture that value, 66% of firms are allocating R&D funding toward digital delivery right now – investing in everything from component-based design and digital twins to automation and remote inspections.
Nobody can afford another shiny new object
Before speeding down this digital path, note that it is about far more than just new technology. If you invest in technology alone, you’ll likely fail. To succeed, you need to not only evaluate and select the appropriate digital solutions, but also address how they will affect your people and processes. If a technology changes, so do the people and processes that use and support it. And change is hard. People have routines and habits. Should employees feel excited or scared by the uncertainty? Should they be change advocates or obstacles?
A new digital application or programme also requires learning new things. In some cases, change is stalled by fear of the unknown and not being able to adapt to new methods. All this to say, change enablement is critically important and, thankfully, well-documented! It does not matter if you follow eight steps or five, Kotter or Prosci – just that you acknowledge how important change enablement is to the success of your digital transformation. Unless you have the people and process aspects figured out, your new technology may stay a shiny object.
The why and what of successful digital delivery
Technology can help AEC firms reimagine their processes so they can be efficient and execute more effectively. But without a thoughtful change enablement plan, your new technologies can become a major headache. Change enablement needs to focus on why this is important to your people and what process will change. Let us dive a bit deeper.
Ensure people understand why change is good for them and the company – Organisations often underestimate the impact that moving to digital delivery can have on the way employees do their job. Your employees have shared values, beliefs and norms. Many are comfortable with their role and the way they do their jobs, making them resistant to change. Change enablement is a critical piece to removing obstacles and driving adoption. To ensure success, articulate the benefits of the new model and desired behaviour for both individual outcomes and firm-wide success. If people understand why this is a good thing, they will be more likely to accept and even embrace it.
Clearly communicate what is changing – Employees’ next question likely will be: “How will this change affect my job?” With your new technology, application, or technique in hand, it is time to transform and improve business processes. Business process re-engineering can range from a light to heavy touch, depending on the project. Goal setting helps you define and communicate what you’re trying to achieve. On the process side, assess your current processes, identify those that need to change and map out how they will change.
Support any new implementation with the necessary training, communication plan and resources. Monitoring the results is essential. If the new process is not working as intended or delivering the desired results, make adjustments. Finally, if employees are at risk of falling back into bad habits, take away the old way of doing business.
Digital delivery is imperative for AEC firms to compete in today’s dynamic market. To meet infrastructure demands and establish new revenue streams, AEC firms need to become digital integrators to transform and expand their business model, providing digital services that go beyond just project handovers.
However, change can be daunting and complex. Do not fall into the shiny object trap. Instead, look beyond the technology to focus on helping the people and processes that will ultimately ensure positive and sustainable change. AEC firms can reap the rewards of digital transformation – improved employee and operational productivity and increased service offerings – by not only implementing change, but also enabling it.
Claire Rutkowski is senior vice president and CIO champion at Bentley Systems.