Digital Transformation

With roughly $10 trillion spent on construction-related goods and services every year, the construction industry is the largest in the world. Construction employs roughly 7 million workers in the U.S., and the industry is ripe for prolific expansion as the societal and economic impacts of the Covid-19 pandemic wane. Demand for the construction of new buildings, bridges, roads and energy infrastructure is steadily rising; in the U.S., non-residential construction will expand 4.6% in 2022 , while a 9% growth is expected in the residential sector.

But despite its apt positioning for growth, the construction sector’s productivity is trailing that of other industries — and it has been for decades. Globally, construction sector labor-productivity growth averaged 1% a year over the twenty years, compared with 2.8% for the total world economy. Consider that productivity in manufacturing, retail and agriculture has grown by as much as 1,500% in the U.S. since 1945.

Why is this the case?

Silos Are Stunting Construction Productivity

The construction industry is traditionally dominated by silos. Employees rarely step outside their predesignated realms within a construction business, hindering communication and effective cross-department collaboration. An Accenture study conducted in 2020 stated that 75% of surveyed construction industry executives said that their internal business functions were competing against each other instead of collaborating. Only 22% were actually getting it right. In an industry that operates on razor-thin margins, this can be the downfall of a business.

Let’s look at an example of how construction workers typically get boxed into silos on the job. Project managers are responsible for ensuring a construction project stays on budget, but they usually aren’t involved in the process of setting that budget — the number is handed to them from a different department. That means project managers don’t have a lot of control over that number, and if something goes awry in the field, it becomes exceedingly difficult for them to make sure the job is staying on time and on budget.

Considering the current state of the construction industry, we pose the question: can an industry plagued by low productivity rates really afford to let collaboration fall to the wayside?

Cross-department collaboration is a critical cornerstone to the smooth facilitation of construction projects. It increases efficiency, saves money and keeps chaos from unfolding on a job site when pressures run high and billions of dollars are on the line. Clearly, there’s a massive opportunity for better collaboration across business functions in construction.

The easiest and most obvious solution to this issue?

Digital tools that break down traditional silo barriers and increase communication across projects.

How Digital Tools Enable Better Collaboration

Construction projects are growing larger in scope and size. The expansion of projects introduces more people, more departments, and more dollars into the process. In other words, collaboration is vital if EPCs want to be able to complete these projects on time and on budget.

Digital collaboration tools like HxGN SDx® Projects & EcoSys make that possible. Both SDx® Projects & EcoSys are singular, easy-to-access digital platforms that enable effective communication across departments. This ensures everyone is using the same data regardless of system origination, helping to eliminate double entry, manual processes and human error. With access to the right information at the right time, all project stakeholders can make informed, collaborative, and data-driven decisions effectively and without delays. Stakeholders are notified about actions through an automated workflow that tracks progress against a project’s schedule and budget.

Digital collaboration platforms provide accountability and increased visibility of a project’s progress, enabling enforced inter-discipline communication, faster turnaround of data and documents and consolidation of markups. For example, SDx® Projects helps clients with document control and management, & EcoSys optimizes project management across the project lifecycle. Construction companies that take advantage of digital collaboration platforms like SDx® Projects & EcoSys see a 10% reduction in hours due to more efficient workflows and communication.

Digital twin technology also enhances collaboration that breaks down the traditional silos of construction projects. Sharing digital twin data with all relevant internal departments ensures everyone stays on the same page across the entire project lifecycle. A digital twin makes it easy to share troves of data with external supply chain partners and project owners. With access to the same insight, EPCs and their respective collaborators can make better decisions that fuel the time and cost-efficient facilitation of a project. And when the project wraps up, EPCs deliver the digital twin to the Owner-Operator.

Traditionally, a lack of collaboration (usually brought on by the use of analog documents) leads to delays and miscommunications during change management procedures. This is no longer an issue for EPCs that have introduced digital collaboration tools to their arsenal.

We can point to technologies like J5 Shift Operations Management as an example. This digital tool helps facilitate collaboration by enabling smoother shift operations management and communication to reduce the risk of hazards and human error. Fewer errors yield improved production, less maintenance, reduced losses and fewer customer complaints. Furthermore, improving shift-to-shift communication and reducing the risk of hazardous incidents helps EPCs meet shift handover recommendations from a range of industry and government agencies.

Other technologies like SDx Collaboration help improve information exchange between project stakeholders. SDx Collaboration gathers and leverages data to ensure that the right deliverables at the right milestones are reviewed by the right specialists, based on intelligent rules — leagues more efficient than the traditional manual processes. SDA Collaboration is the first online project collaboration technology architected to simultaneously build the owner operator’s digital asset during the project phase for use later in operations and maintenance.

It’s Not Just The Tech: It Comes From The Top Down

Though increased digitalization is a vital step toward improved collaboration in the construction industry, EPCs can’t rely on digital innovations alone. A broader cultural shift in favor of collaboration must occur in the construction industry, and it starts from the top down. Strong leaders set the tone for their companies, and those who encourage their employees to break through silos will ultimately benefit from greater instances of collaboration.

Leadership’s attitude towards adopting new technologies will also play a large role in its adoption. Construction executives are known to resist adoption and implementation of digital tools given their high initial price points, but the increased workflow efficiency and communication enabled by digitalization ultimately yields a higher ROI.

Could Collaboration Redefine The Construction Industry?

Increased collaboration has the potential to revolutionize the construction industry, and some EPCs have already begun seeing results from the implementation of digital collaboration tools. This is largely thanks to the pandemic; with remote work now more prolific than ever, implementing digital solutions for collaboration simply makes good business sense for EPCs.

Even still, the construction industry has a long way to go before it can be recognized as a leader in digitalization. The gap in productivity present in the construction industry is still a wide one. But the more EPCs invest in collaborative technologies to break down silos and enhance better communication across departments, the more we’ll see progress in construction productivity.

Hexagon’s PPM division provides construction industry leaders with the digital tools necessary to facilitate seamless communication for construction projects of all sizes, scopes, and budgets. Get in touch with us to learn more about these digital solutions and how they can help your construction organization facilitate improved collaboration across every business function.