Dive Brief:
- Artificial intelligence doesn’t represent an "extinction event" for AEC firms, but it will fundamentally change the way construction pros streamline certain tasks, according to a new report from global consulting firm McKinsey.
- The July 15 report, “How AI is reshaping the future of the AEC industry,” describes two camps of AI users — those who leverage it to automate core tasks, and those who use it as a superficial productivity tool. In particular, firms that control proprietary project data, decision-making workflows and the ability to charge for outcomes rather than work processes will see benefits, per the report.
- “Early adopters are reporting productivity gains from design, modeling, and construction-feasibility workflows, though these advantages will likely soon be table stakes,” the report reads.
Dive Insight:
Overall, the consulting firm advises builders to use the tech to transform domains, otherwise known as end-to-end processes. These can be redesigned independently due to their small size while delivering meaningful impacts to a business, as opposed to isolated deployments, per the report.
“As models become widely available, I think advantage is going to come from those who can redesign their work, their roles, how they operate, how they think about commercial models the fastest,” said Daniel Ahmoye, a partner in McKinsey’s Calgary, Alberta, office, in an interview.
Indeed, McKinsey’s research claims that AI has the potential to automate 39% of nonphysical work in the construction sector, per the report. That’s compared to 50% in the architecture and engineering sectors.
Altogether, the consulting firm identified 150 workflows across 25 AEC-related domains with differing degrees of potential for AI and automation within the process. In particular, the firm claims that skills such as data entry, invoicing and equipment inspection will see the most change by 2030.
McKinsey then divided these automation goals into three time-based phases:
- Near-term, or the first 18 months, with a focus on streamlining end-to-end workflows. These tasks include bid/no-bid analysis, estimating and proposal drafting functions.
- Medium-term, or 18 months to four years, where contractors leverage data advantages. These tasks include using automation to help builders take advantage of proprietary data, such as RFIs, drawings, specs and close-out reports.
- Long-term, or beyond four years, where builders can leverage AI on the jobsite. These tasks include using autonomous construction equipment and transportation coordination between factories, yards and the jobsite.
With these timeframes in mind, however, it doesn’t mean that certain tasks will simply go away, Ahmoye said. Only a certain portion of these tasks can be done by 2030, and that number is narrowed when builders consider the roles people play in their completion.
“Only certain roles can be automated, and it's more about the tasks and the activities,” Ahmoye said.
While the number may seem huge and daunting, it’s more about piecemeal components across an entire set of activities.
“And what really will make the difference is how those activities are daisy chained together or put together in a way that reduces friction and creates easier workflows across the life cycle of a construction project,” Ahmoye added.
McKinsey has waded into the construction industry’s productivity debate before, most famously with its 2017 report on the building sector’s failure to keep pace with the rest of the world. Another report shows that, from 2000 to 2022, global construction productivity improved only 10%, McKinsey experts wrote in Construction Dive.
The report also offers a word of caution for builders amid the ongoing debate of whether to build solutions or buy from software developers who provide technology and expertise for specific issues. High-profile builders, such as Suffolk Construction and Turner Construction, for example, have stepped into the arena to develop their own tools in-house to solve pain points.
“AEC firms have historically struggled to build and scale software products, and AI is advancing too quickly for most incumbents to rely primarily on internal development,” according to the report. Rather, builders should focus on their advantages that competitors or vendors can’t easily recreate, such as with proprietary data or client relationships.
To that end, a company should build where its expertise is the product. That firm should also buy products where another outside source is investing more than the company ever could, said Ahmoye.
“So, to me, it's not a question of what to buy or build. It's more of a question of, where do we see advantage coming from?” Ahmoye said.
Going forward, McKinsey highlighted several steps to help builders prepare for AI integration. These include prioritizing three to five high-value workflows; choosing where to buy, build or partner; scaling with governance and measuring what matters, per the report.
