While some construction firms are on the forefront of incorporating technology into employees' daily workflow, others have struggled to add digital solutions to their projects. A group of McKinsey & Co. analysts has looked into the reasons why some engineering and construction companies fail in their efforts to digitalize. They include:
- The presence of a multitude of independent subcontractors and suppliers that have little incentive to embrace new methods during the brief periods they are on the job.
- Projects that vary greatly, leaving engineering and construction (E&C) companies struggling to develop tools and methods they can apply repeatedly.
- Limited research and development budgets that prevent companies from spending as much on digital as companies in other sectors do.
- Jobsites in remote, harsh environments that are not well suited to hardware and software developed for an office environment.
“It is no wonder,” they write, “that many engineering and construction businesses end up with little to show for their technology investments.”
But the benefits of technology are many, they say, noting that research by the McKinsey Global Institute indicates that digital transformation can result in productivity gains of 15% and cost reductions of up to 6%.
The group identified five practices that have helped construction firms overcome challenges and successfully implement digital technologies. They include focusing on fixing pain points instead of installing IT solutions, reskilling and restructuring engineering teams and adjusting project baselines.
The team also identified "digital use cases" as one of the main ways that construction companies can increase success with digital technologies. These involve applying one or multiple digital technologies to realize a specifically defined, discrete and quantifiable benefit, article co-author David Rockhill, McKinsey & Co. associate partner, told Construction Dive.
For example, one contractor developed an app to allow supervisors to sign completion certificates digitally. After the app was developed, the team defined a new use case to push safety briefings and alerts through the app so supervisors could disseminate them to teams.
Another E&C company embraced the potential of enterprise-wide use cases by standardizing the specifications for its insulation panels. Previously, the company had sourced similar products from different suppliers. By digitizing and standardizing element data, the company gained an enterprise-wide view of element volumes, which allowed it to standardize specifications and aggregate purchase orders to obtain savings.
Rockhill said that use cases are critical to help contractors get the most value out of their technology investments.
"A focus on use cases allows companies to prioritize implementation of digital tools and technologies that will improve a specific operational process, address a need and create real impact — rather than risk technology just being implemented for its own sake," he said.
Here are Rockhill's tips for getting the most out of use cases:
Start with the desired outcome and the related processes, not technology. Use cases should create impact by improving a process or processes on a project, for example by reducing costs, accelerating delivery or improving quality, he said. It is important that front-line workers who are involved in the process implementation are part of the effort to identify valuable use cases and the particular levers that need improvement.
"It is important to remember that technology is just the enabler," he said.
Describe use case clearly and set motivating targets. The most effective use cases are clearly communicated with a focus on the anticipated impact, therefore helping to build understanding, support and adoption in the workforce. Furthermore, organizations should set and track progress against quantitative targets for improvement.
Focus on use cases that connect different functions and disciplines. Fragmentation is one of the main drivers of low productivity in construction. Any digital use cases that reduce the friction between different trades and functions can have a significant impact on productivity.
The McKinsey team noted that use cases require an ongoing commitment. "The creation of use cases is an ongoing effort, and new opportunities for improvement often emerge once first-wave use cases are in place," they wrote.