Digital maturity in Australia’s construction industry is fragmented, according to the Australian Broadband Advisory Council Construction Expert Working Group scoping studywhich explored opportunities and barriers to the adoption of technology in the construction sector.
The study also found that digital technology adoption varies significantly by industry segment, as well as between Tier 1 and Tier 2 companies and small businesses. It suggested that the adoption of digital technologies was significantly influenced by the confrontational and competitive nature of the local construction sector.
It also recommended that more needs to be done to encourage smaller companies to digitize their workflows and processes, including raising awareness of the potential benefits of such a move.
The fragmentation of digital maturity in Australia’s construction sector is fairly easy to see, says Dushyant Shrivastava, head of digital for the Australian arm of multinational construction company Laing O’Rourke. “If you compare construction to other sectors like automotive or aerospace, digital adoption has been much slower,” Shrivastava told CIO Australia.
As a top player in the local construction sector, Laing O’Rourke holds a relative leadership position in the Australian market in terms of its technology position. However, that doesn’t mean Shrivastava isn’t seeing the areas where the rest of the industry is lagging behind in terms of digital reputation.
The construction industry has traditionally been a relatively low-margin business landscape, Shrivastava says, and as such it often witnesses a race to the bottom for contracts. This means that decisions are often made based on cost rather than value, which can be a barrier to innovation as the adoption of digital technologies is believed to increase productivity, streamline processes and improve margins.
The sheer degree of fragmentation in the construction sector is another challenge for digital adoption in the construction industry, says Shrivastava.
“It’s not a highly integrated value chain, so you’re always dependent on other actors within the ecosystem. Even if you’ve had the highest level of digital maturity in relative terms, you’re only as strong as your weakest link,” says Shrivastava.
Digital adoption can be accelerated through public and private sector partnerships
While Shrivastava is not shy that there is room for improvement in the digital space across the construction sector, he prefers to look at the opportunities rather than the limitations – but this requires a team effort from public and private clients, designers and the supply chain to get the whole industry on track.
“Certainly there is momentum and enthusiasm within the sector – digital innovation is becoming a consistent narrative for all organisations,” he says.
Government can play a role by providing more strategic direction for industry adoption of digital technologies, says Shrivastava, Singapore and UK governments are beginning to play a key role in setting specific standards and baselines for digital play introduction.
As a private, multi-billion dollar organization, Laing O’Rourke is certainly helping to lead digital adoption, but the company has focused on being at the forefront. Laing O’Rourke has dedicated operational teams focused on digital engineering and project information management, while also hiring from outside the industry to encourage diverse mindsets.
“Within Tier One designers, the digital narrative typically revolves around 3D modeling or BIM [building information modelling]. At Laing O’Rourke, we take an inclusive approach to digital. For us, it’s not about models and deliverables, it’s how we drive model-based integration across the project lifecycle, how we integrate the deliverables through our systems and processes across the project lifecycle,” says Shrivastava.
However, Shrivastava emphasizes that Laing O’Rourke is not going digital just to go digital – it’s a very purposeful approach. As a result, while modeling is a large part of its digital capabilities, the company’s broader digital game revolves around end-to-end integration in terms of solving specific problems.
Defining and thinking about the specific problem that needs to be solved is a core element of construction giant Lendlease’s ongoing digital journey. And one of the problems Lendlease was trying to solve was finding coordinated and shared ways of working across the company and across the industry.
A problem-centric approach has resulted in industry players using multiple technologies with purposes that overlap in variable and conflicting ways, making it relatively difficult to find comprehensive solutions that everyone can use, says David Lipscomb, one of two co-CIOs at LendLease.
“To really get a much more coherent tech landscape, it is [the construction industry] needs to reflect a more cohesive work environment, with collaboration at a higher level,” Lipscomb tells CIO Australia. “I think it’s kind of interesting because when you look down to the project level, you see a high level of collaboration between people communicating about incredibly complex tasks every day. But the industry as a whole has found it difficult to achieve that.”
Like Shrivastava, Lipscomb can see how the nature of the local construction industry, particularly its fragmentation, has to some extent stifled the adoption of digital technologies. In addition, there are differences in the compliance laws in the respective regions in which projects take place.
“It is a challenge to create consistency and cohesion in this environment. And I think that’s the big challenge for the industry. I don’t think any particular software will necessarily solve this; I don’t think any particular company will solve this on their own,” says Lipscomb.
Instead, cross-organizational and cross-industry coordination could help create a more cohesive landscape and create a digital foundation that more players in the industry would benefit from.
Lendlease has worked internally to coordinate in key areas to ensure such cohesion and has invested in developing and building its own solutions to fill some of the gaps it sees in the market.
How Lendlease used digital technology to create internal coordination
A key solution that Lendlease has developed to achieve such coordination is a platform called One Lendlease Interactive Digital Mentor Platform or Oli, which was developed to provide a project management framework to help Lendlease employees across the company share processes to pursue.
“This is a digitized way to really start visualizing our pipeline, understanding our investment decisions and accelerating the decision [making] process and ultimately gain much better control over risk as we work through our pipeline,” says Lipscomb.
In fact, the OLi platform is claimed to have helped Lendlease make great strides in achieving a level of understanding of the types of information it wants to capture across the business that was previously unavailable. Ultimately, the solution helps Lendlease address a problem that many, perhaps all, construction companies struggle with managing risk when building a pipeline of the projects they want to deliver.
Launched in late 2020, the platform has automated the process underpinning the company’s investment profile for construction. This, in turn, saves Lendlease significant time and allows its staff to focus more on understanding customer needs and defining key project deliverables.
“[One] One of the benefits of this investment is taking risks in managing our projects in order to get a better outcome from the projects. Some of these results are only visible two or three years after the start of the initiative, but the key for us is better management and understanding of the data of our projects and their implementation. And then the result gives us confidence to continue investing in other ways to collect data and manage it in different ways than we have done so far [previously]says Lipscomb.
From a business perspective, the company is using this digital initiative and others like it to see how it can make better use of data and leverage it for smarter tools and artificial intelligence (AI) based capabilities to give it the foundation to further develop its efforts, products of better quality on the market.
One of the keys to success is helping Lendlease leadership “make the most of the fact that we are a global company,” says Lipscomb.
“And that’s not based on centralization and people defining a global process, but on collaboration and collaboration with each of our companies around the world to better understand what’s going to make an impact,” says Lipscomb.
Find the purpose of digital transformation
When it comes to embarking on a digital journey, a company must determine what is most impactful, its core purpose, and the specific problem it is trying to solve.
One of the best ways Shrivastava believes other players in the local construction industry can become more digitally mature than just articulating the specific problem they are trying to solve is by identifying their purpose.
“Thinking about my experience outside of construction and then at Laing O’Rourke, I would say first and foremost that it’s crucial to have a very clear goal in mind. Otherwise, you can waste money and start watching a lot of digital plays without getting any tangible results,” says Shrivastava.
The way to do this is to first identify the problem that needs to be solved, which would then translate into a clear strategy for achieving that goal, says Shrivastava.
“My strong recommendation would be to then layer that with a value-based approach. It allows you to consistently monitor and course correct to ensure you are generating results and not just economic value,” he says.
Achieving effective digital adoption also requires strong executive sponsorship – not just lip service, but genuine endorsement from senior leadership.
“The leadership team needs to commit and fulfill that commitment with investment and funding,” says Shrivastava.
Perhaps most importantly, Shrivastava points out that digital journeys don’t have to be undertaken alone. “Look to build the right ecosystem around you, the right partners, whether it’s startups, established tech companies or consulting firms, you need that level of support,” he says.
Finally, Shrivastava recommends that other players in the local construction industry looking to expand their digital presence and capability should not attempt to undertake a large-scale transformation all at once. “It’s good to have a big vision to guide you, but then tackle smaller pieces and get some runs on the board before you start developing the coalition of the willing,” he says.