How Digitalization is Reshaping the Construction Industry

Nobody wishes to be left behind. And the fact is, digitalization is the future. To propel your organization forward, going digital is the best route toward safer, more efficient and cost-effective operations.

But what happens when organizations choose to delay or avoid digitalization? We only need to consider events in recent history to find our answer. Even industry giants and household names were not immune to the dawn of digital.

Take photography giant, Kodak, for example. In 1968, the company had captured about 80% of the global market share in its field. Yet, despite its seemingly unstoppable upward trajectory, Kodak eventually hit a breaking point from which it never recovered due to its rejection of digital photography technologies. In the 1980s, most of Kodak’s competitors had started to make the switch to digital photography. The rise of digital was inevitable, but Kodak executives dug in their heels, citing fears of alienating their customer base with new technologies. For 10 years, Kodak tried convincing its customers that film was better than digital rather than following its competitors’ lead and making the switch. The decision to stay stuck in its ways cost Kodak greatly. In 2012, the company declared bankruptcy, bringing an end to a monumental chapter in photography’s history.

The same story is reflected in other industries, such as the technology and media sectors. Nokia, once holding 50% of its market share, struggled to keep up once smartphones hit the scene. While other companies embraced 3G technology, android and iOS, Nokia was slow to uptake due to a fragmented corporate structure, leaving them behind competitors in terms of innovation and meeting market demands.

Similarly to photography and mobile technology, the construction industry is also undergoing a wave of digital transformation. The rise of technologies like digital twins, BIM, the cloud and other key innovations promise to revolutionize the industry entirely, ushering in an era of construction workflows characterized by improved efficiency and safety, increased transparency and a heightened ROI. The construction industry is traditionally an analog one, but future oriented EPCs would be remiss not to take advantage of the digital technologies making tectonic shifts in the industry.

The Impact of Digitalization in Construction

Digitalization impacts the construction industry on several fronts. Digital technologies help EPCs bolster their efficiency (and save time and money to boot) by automating material readiness, improving safety on the job, streamlining change management and maintaining accuracy across every stage of a project’s lifecycle. Here are the details on how digitalization is reshaping construction.

Automation is Enhancing Material Readiness

Digitalization is empowering the migration from document-centric to data-centric material readiness management within the construction supply chain. Before digitalization, construction firms had to manually track down their assets – an extremely painstaking and labor-intensive process.

Digital tools which provide advanced work packaging capabilities, provide a single source of truth for material availability, improving material control and enabling transactional efficiencies between stakeholders. In a single digital platform, they can compare supply data from purchase orders, shipments and field transactions with demand data from work packages and project schedules, ensuring that workers have their materials ready when they need them.

According to the Construction Industry Institute, craft labor productivity can be improved up to 25% through improved workforce planning and integrated material readiness solutions, and we can point to the U.S. Department of Energy as an example of the magnitude of these savings. By implementing automated work packaging technologies, the DOE was able to achieve over 30% production improvement in the work package planning – a savings of over $1 million a year.

Digital Tools: Promoting Heightened Safety and Risk Mitigation

There are several ways that digital technologies can improve the safety and risk mitigation of a construction site. For starters, they help in identifying a project’s risks, managing those risks and creating robust mitigation plans.

Digital tools like employee tracking technology can help identify and alert employees of potential hazards on a job. This allows contractors to see who is on a job site and where they are located, receive real-time alerts for potential injuries or site hazards and quickly communicate in an emergency. Digital technology can also enable contractors to gather safety incident data for regulatory bodies. Furthermore, digital technology also makes it easier to navigate local regulations surrounding a particular job.

Digital Technologies Empower Laser-Precise Accuracy

Analog change management is a traditionally cumbersome process, but it doesn’t have to be. Digital tools enable swift communication and collaboration across different departments, improving efficiency and reducing errors. Asset lifecycle information management solutions, for example, enable users to capture, organize and relate large volumes of facility information and provide web-based access to everyone who needs it. This level of transparency across every project asset enables efficient, error-free change management.

Looking Ahead: The Future of Construction Digitalization

Digitalization in the construction industry has made leaps and bounds in the last two decades. Looking ahead, we’ll witness even more innovations sparking dramatic improvements to the industry.

In the next several years, we can certainly expect to experience a rise in technologies that empower the connected worker. This includes next-gen augmented reality glasses that enable workers to access and manipulate digital drawings as if they were right in front of them. Dedicated digital commissioning systems will empower streamlined and transparent planning, delivery, verification and risk mitigation of projects. And the more advanced digital twin technology becomes, the more it will be employed to capture a holistic view of a project across its entire lifecycle.

Last Words

Much of the world was stunned to witness Kodak’s and Nokia’s fall from grace. The companies’ once-iron stronghold on their respective markets was made possible by its ability to innovate and use cutting-edge technologies to provide better products to its customers, but missing the digitalization boat was its fatal misstep.

The construction industry would be wise to reference these cases as a cautionary tale. Key players in the construction industry risk incurring Kodak’s same fate if they, too, turn a blind eye to digitalization. Though progress may be outpacing our ability to embrace change, digitalization empowers a safer, efficient, and more cost-effective construction industry – and that progress is not slowing down anytime soon.

Navigating the digital landscape can be challenging, which is why Hexagon is here to help construction professionals and industry leaders enter the digital arena and make the best decisions possible for their businesses. Reach out today and discover the improvements made possible by digitalization. Whether you’re a large EPC firm or a local general contractor, our mission is to help your business embrace digital transformation in a way that works for you.