November 21, 2022

The Role of Digital Technology and Modernisation in Construction – the Key to Success

The construction industry is well-positioned to make good use of a range of technology on offer. Indeed, many digital applications are already being used in the construction sector to positive effect: Modular construction, building information modelling(BIM), big data, additive manufacturing, robotics, IoT, and virtual twins to name a few.

In this article, we’ll decode digital transformation advances in construction, see how the industry has fared in terms of modern advances, and examine how incorporating technology can help the sector improve further.

Is technology in the construction industry still at a nascent stage?

Technology today is broadly accepted as a way to effect positive change in the construction industry. The move from siloed legacy technology to a data-driven and analytical digital approach has helped the industry to level-up.

Still, in comparison to other sectors the application of technology in the construction industry, particularly in the back-office, has seen a slower paced adoption. In 2020, an International Data Corporation infobrief showed that the ANZ construction sector should be using more digital tools. However, just 38% of the respondents surveyed for the infobrief expressed their willingness to establish a digital transformation roadmap for their construction companies within the next 12 months.

There are several factors responsible for the historical digitalisation gap. Impediments in the amalgamation of technology have been largely influenced by the way the construction industry works, operating in a linear manner involving different stakeholders and complex supply chains.

Construction task completion is passed on by one partner to another as a project moves towards completion. Challenges like collaboration obstacles, lack of skills, and budgetary issues have slowed down a more unified and effective approach to industry-wide digitalisation. Occasionally, business leaders lacking the right level of experience or the latest insights into the adoption of modern solutions have also hampered progress.

Today however, technology is being accepted as a must-have, and we expect to see its adoption accelerate over the next few years.

Digital Construction

How is digitalisation helping to transform the construction industry?

The potential impact of technology on the construction industry is significant, presenting businesses with an opportunity to streamline more traditional processes to achieve greater efficiencies, reduce errors and improve profitability.

For example, technology can provide construction businesses with tools for project completion time tracking and for moving paper forms online. It can also provide a more efficient solution for field and site data collection.

Technology can help deliver improvements in pre-construction with considerable efficiency gains in bid team performance. Furthermore, the time saved by applying digital tools can be invested in relationship management and communications.

Research indicates productivity gains of 14 to 15 percent and cost cuts of 4 to 6 percent are achievable through digital transformation.

Amalgamating modern technology with construction business processes

Where they have been used, purpose-built digital solutions for enhancing business productivity in the construction industry have proved effective and help the sector to remain competitive.

At its core, digitalisation is about driving progress, boosting productivity, and increasing revenues. But it contains the added benefit of making tasks less arduous, allowing projects to be completed faster and with less effort. The result is that an organisation and its people work together in a more synchronous and aligned manner, a win-win for owners and employees alike.

It is these more manual and time-consuming tasks that should be primary targets for modernisation. As an example, the processing of progress claims has traditionally been a cumbersome and heavily administrative task, as the construction sector contends with a complex partner and supply chain. Managing compliance documentation, tracking applications, reconciling data and trying to detect errors has traditionally seen a lot of valuable time wasted. Manual management of payment applications was an area in dire need of a digital solution, which is the reason Payapps was founded.

Additionally, the pandemic highlighted the importance of having mechanisms to facilitate remote work in the construction industry. With bespoke technology in place that recognises the unique needs of the construction industry, remote work can be more easily incorporated into the sector.

For more information about post-pandemic success, read our report: "Thriving in the Construction Industry Post-Pandemic."

Flexible working options for employees can also be facilitated by having a well-thought-out digitalisation strategy in place. More than ever, especially post-pandemic, all industries are aware that office employees don’t have to be at their desks all of the time. Employees want the freedom and flexibility of working from wherever they want.

Digitalisation can also be used to measure the movements of on-site materials. For example, the Internet of Things, as explained in this article from McKinsey & Company, can be applied to allow key on-site elements such as machinery and equipment to communicate to a central data platform and capture key performance metrics for further analysis.

Taking the right steps to support the best possible technology adoption in construction

There are several steps business leaders could take to proactively make digitalisation a success.

      Devise the right digital transformation strategy - a detailed study of your current operational procedures and the possible solutions that can deliver improvements can be the foundational stone of your digital success.

     Prepare your organisation for cloud adoption - cloud technology has a significant role to play and is currently being used in various industries to positive effect. The construction industry can also leverage this technology to drive efficiency and cost gains. The cloud provides a central database that’s easily accessible, and data is continually backed-up and shared safely to multiple stakeholders, whereas data on a laptop or other device can be vulnerable to loss.

      Ensure the security of your systems - this is a key component of your digital strategy. Construction firms cannot afford to compromise critical client or commercial data, which means strong security mechanisms must be in place.

      Take advantage of and share operational knowledge - getting the right people in your team to devise your digital transformation strategy is pivotal, as is ensuring that operational knowledge is shared. This sharing of knowledge will help you identify areas that need to be addressed during the project or managed on an ongoing basis once it has been completed.

      Invest in your employees - make sure all internal stakeholders are on board with the digitalisation steps the company is going to make. Investing in upgrading the skills of your employees will bring benefits to any company in the long run. Ensure your employees get the required training to make the best use of any new tools.

      Communicate the benefits of new technology -this is vital for overcoming people’s natural resistance to change. Briefing employees about these benefits and conducting training sessions can go a long way towards affecting a smooth transition.

Digital acclimatisation

Despite the best approach to communication and training, digital transformation still means employees will be contending with a new working environment. That means construction firms will need to constantly check and reassess whether new systems are working as intended, and gather feedback from users as early as possible to understand any issues or knowledge gaps.

If there is a gap in employee training, or a need to fix processes using any new technologies, these should be addressed as early as possible. Feedback should regularly be gathered from users so all systems are continually fine-tuned.

New working environments are often met with resistance, and people tend to stick with methods they are accustomed to. However, teams can accept and welcome new solutions as long as there is thorough communication around the efficacy of any new systems, and the right level of training is available to start using them. It also helps when solutions are intuitive and easy to adopt!

Avoiding business modernisation is avoiding growth

The availability of digital tools has given business leaders an opportunity to advance toward growth. The benefits of digitalisation are validated via multiple industry case studies, therefore saying no to modernisation is only going to hamper the long-term growth of your business..

Technology that facilitates collaboration can benefit both contractors and subcontractors and can lead to smoother communication and interaction along the supply chain. Simply put, legacy methods of communication and management are increasingly seen as outdated, reflecting poorly on firms which have not embraced more efficient and seamless digital technologies.

With the right approach to strategy, training, testing and communication, digital technologies can be a transformative and positive force for growth in the construction sector. For firms which take the right steps, productivity, profitability, and competitive advantage awaits.

Ready to learn more? Read our article about strengthening your construction business in a post-pandemic environment, covering 6 ways to reduce costs and improve profit margins.

Payapps: a progress claim processing digital solution

Taking steps to digitise and streamline key business activities, many prominent construction firms in Australia and New Zealand are using Payapps for their progress claim processing. Payapps is cloud-based software that can help you to easily create, assess and approve progress claims up and down the partner and supply chain. Contact us today for further information and to book a demo.