This piece was written to Unissu.com to be the key piece of their ConTech theme month Demember ’19.
A man with steel grey hair
Envision George, a man with steel grey hair, driving a Land Rover and talking to customers on his old clam shell phone. He has no need for bells or whistles, apps or features, he just wants a battery that can run for weeks. A man of traditional values, he’s been engaged for most of his life as a contractor, building ambitious, large-scale projects that take good time to complete. He has nothing but deep respect for manual labour and makes sure that everything his crew constructs is built to last, to remain long after he is gone.
By now, he’s witnessed a couple of recessions and bubbles. He faces these changes like an oak tree – he has seen it all and he knows how the story goes.
Middle-class consumers around the globe are starting to dress the same and decorate their homes in a similar style. Winners of globalisation are businesses that are efficiently connected and on top of emerging trends. Ikea is the text book example of a company that has successfully capitalised on global trends and branded itself as a place where consumers can easily purchase the same thing whether they are in Shenzhen or Austin. Leveraging the data that they gather from customers is what drives their business.
In construction, trends are no longer local; they are increasingly global. People don’t necessarily want the same things, but they do want the same range of options. World -eading construction companies have been aware of this development for quite some time.
We reflected on the evolution of the industry with three of our partner companies: Bonava, Skanska, and YIT.
”The pressure to change practices naturally comes from outside the industry. This is the era of the customer: customers are more aware of their power than ever before.”, says Mia Ollila, Head of Customer Service at Bonava Finland.
There is no such thing as a small mistake in construction. Competition for meeting customer demands and high expectations is real. And now, George is facing a very different world, finding ways to keep pace with the ever-moving, fast-growing global economy. Automation is an increasing trend and already a reality in many areas of the service industry. In the near future, unmanned cargo ships will sail the vast seas, and driverless trucks will roam the globe.
Once upon a time, the emergence of harbours, airports, and train networks gave birth to the clock that is now ticking on every office wall. Soon, global delivery chains will be formed by an organic entity consisting of automation algorithms ready to react to every human need and desire in a microsecond and capable of anticipating these needs.
Like Mia Ollila puts it, ”No matter what the industry, companies simply cannot afford to ignore the customer.”
Placing the customer to the center is the biggest challenge, not least for construction, and for this, digitalisation is the only way forward. Fortunately, George is able to both find new ways to listen to the customer as well as keep his high standards of quality and tradition of craftsmanship.
Changing the game
The first wave of companies attempting to digitalise the construction business appeared some 5-10 years ago. Naturally, it all started with the low hanging fruit: improvements on communication, sharing attachments, and tracking defects.
People from outside the industry have been introducing digital solutions which provide many improvements, like the capability to render 3D models of individual apartments, online configuration shops, different customer management portals, or solutions for tracking resources or tools at sites. Companies with roots outside the construction industry are popping up in many countries, and as great as their innovations are, the solutions aren’t quite reaching the heart of construction business but keep solving the issues on surface level.
What is positive is that the development is accelerated through shared experiences of trial and error. However, it is the process of bringing the buyer, the developer, the general contractor, subcontractors, and material provider under the same umbrella that will truly change the game.
This is far from easy.
Building a house capable of withstanding harsh weather conditions is a totally different ball game than sailing a tanker from Rotterdam to Brooklyn harbour, or making an 18-wheeler drive itself across the States. Over the past few years, innovations have also started emerging from within the construction business.
Co-operation between creative, younger generations in the industry and people like George, who have vision and deep experience, bears fruit. The added value is that these experts really understand the challenges of the industry, which are certainly different from those of the smartphone business, for example.
My colleague, Jarmo Ollila, Chief Sales and Marketing Officer at GBuilder, notes differences in the level of digitalisation between market areas:
“Typically, Scandinavia is taking the lead in digitalisation regardless of the industry. However, many other markets are following close behind. Large companies in particular have been actively setting up innovation units and BIM units, forming their strategies, finding and implementing digital solutions. For example, UK and DACH areas have recently been taking giant leaps in their digital development.“
An often stated reason for turning to digital platforms is the wish to optimise processes. But there’s more to the story.
Construction companies today are typically dealing with severely fragmented data; what could be a powerful tool for driving the business stays as useless bits of data split into several systems. In the information age, data is the most valuable capital. All stakeholders should be able to make use of it – not only construction companies, but the whole value chain.
“After negotiating with hundreds of stakeholders and starting the actual construction work, companies may feel that the tough part is almost over and all that is left is to finalise the construction work. However, the customer’s journey is only about to begin,” says Mia Ollila. “The challenge is, in my opinion, the systematic understanding in construction that when the customer gets the key to their new home, their work is done. Therefore, it is only human that construction business still lags behind in creating a customer-centric culture. But is this acceptable? By no means.”
Large construction companies recognise the potential in extending the services offered to the consumer, including the phase after they have settled into their new home. Valentin Velinov, Development Manager, BIM and Digital Services at Skanska for one, notes as follows:
“BIM models in themselves provide valuable source data, but digital twin platforms provide efficient ways to enrich the models with external data sources e.g. IAQ and product/material data. This enables introducing new kinds of digital services and serves as an efficient platform for maintaining the property.“
Building information models (BIM) are now offering numerous opportunities for meaningful collaboration. Compared with first wave solutions, platforms based on BIM models have endless possibilities for integrated solutions.
Established companies like Procore, Katerra, and Autodesk are strong players in the field, and more are coming. Tomi Virola, Development Manager at YIT observes that although the digitalisation of construction business started from ground zero compared with other industries like financing or travel, the development within the past years has actually been relatively fast.
Pulling information into one, digital platform is indeed the way to get big data at your fingertips. Not only to control the present but to predict the future. Although the possibilities of construction business digitisation are still largely unexplored, it is fairly obvious who will be pulling the strings. World leaders in construction will tune into the desires and wishes of the consumer. This seems to resonate with the construction companies we meet daily.
Mia Ollila, for one, says that being close to the customer is integral to the Bonava brand.
”Now we must work intensively to utilize digital methods for planning, for the construction process itself, as well as for leading the customer experience. To optimize the workflow, to guarantee high quality results, and to further improve the customer experience.”
Digital twins, drones, 3D printing, sensors, laser scanning, big data. In the end, it boils down to basic questions like communication, usability, and scalability. A strong foundation is cast when sales, project management, sites, and supply chains share the relevant information under a single umbrella. Breaking down communication silos within the construction organisation is imperative when leading your business through this transformation.
Now that things are finally coming together and construction companies are starting to make use of the benefits of digitalisation, it is intriguing to follow what kind of practical use cases will develop around virtual reality and augmented reality applications, for example.
Valentin Velinov from Skanska predicts that the introduction of new technologies will give birth to a variety of new, customer-based services, especially as it becomes increasingly easy to integrate with third parties:
“For example, we introduced a fully digitalised way of buying a new home. The customer may handle everything from selection to payment and ownership transferal from the comfort of their own couch.”
Tomi Virola from YIT sees offsite building as one major trend. A strong digital foundation is an absolute must in making sure that modules created in different factories are compatible. As modular building becomes more popular and more common, BIM models gain more ground and, eventually, become an absolute necessity in efficient, optimized construction.
The role of construction industry will expand from construction itself to enabling a continuous development focused around the home and its inhabitants
According to Virola, YIT not only sees digitalisation to be aligned with their core value of customer-centricity, but sees that going digital allows process optimisation and provides a chance to give YIT employees the best possible tools for their daily work:
“Competition over good and capable employees,” he says, “is hardening and top employees seek for meaningful jobs with an employer on top of their trade.”
Digitalisation not only affects the construction phase, but digital models can be used throughout the lifecycle of the building. Velinov argues that digital twins based on BIM not only serve construction projects during planning and production needs, but also during use and maintenance.
A shared language and a common platform made possible by BIM models will organically sprout different kinds of new digital services and business activities. The role of construction industry will expand from construction itself to enabling a continuous development focused around the home and its inhabitants.
At its best, technology can help pave the way towards a global culture of co-creation. The way I see it, including the end-users is significant, but not sufficient in itself. For the next generation of home buyers, technology is not just a tool helping them perform specific tasks, but a fundamental way of creating and maintaining relationships and forming an identity.
When I look at my son playing Minecraft, building skyscrapers and villages with his friends, it is clear what their generation will expect. The future of construction is in the hands of companies who are able to provide them with the range of choices and control they are accustomed to in the virtual realm.