Rob Phillpot discusses the uptake and benefits of technology in the construction industry with AECOM’s Prakash Senghani
With the volume of construction output set to grow by 85% to $15.5tn by 2030, the Engineering and Construction (E&C) industry is pivotal to the world economy. According to a BMI Research report, the Middle East and North African construction market is expected to be worth $336bn by 2020, up from $235bn in 2016, a net growth of 43%.
Deloitte’s ‘GCC Powers of Construction’ 2017 report states there are over $2tn worth of projects currently in the planning stages in the GCC countries, with construction accounting for more than half the value of the pipeline. However, for an industry of such importance, the uptake of technology has regularly been criticised.
Is that a fair assessment of the industry, specifically in the Middle East? Are there signs of a changing digital landscape here, and how are companies in the region dealing with the five key challenges identified by the Global Industry Council report earlier this year?
As a reminder, the five key challenges are:
- Integration across the Ecosystem: Organisations are grappling with complex digital ecosystems that have multiple platforms creating and duplicating data
- Rationalisation and Standardisation: Complex and non-standard processes and systems need to be rationalised across projects
- Building Digital Talent: Organisations not only lack teams of IT experts but also senior leaders who can lead the change, as well as a broader workforce that is digitally savvy
- Securing Digital Adoption: Workforce apprehension arises from cultural and technical challenges and can slow IT adoption and value realisation
- Establishing Value and Return on Investment (ROI): Organisations find it difficult to measure and communicate the benefits gained from large digital investments
AECOM, a member of the Global Industry Council, has consistently innovated, exemplified through its AECOM Teams initiative. It enables more efficient transformation by helping project teams plan for and implement the right tools, take advantage of innovations and resources elsewhere in the organisation, improve data management by connecting to data lakes, and cultivate digital skills.
Prakash Senghani, digital project delivery lead for AECOM, is based in the Middle East and has seen how the industry is trying to evolve. He says, “Although the industry here still struggles with particular issues – primarily late delivery of projects, cost overruns and adversarial contracting and disputes – we’re seeing positive movements towards digital transformation.”
Senghani feels that as well as helping to tackle these issues, technology is already providing many benefits to projects in the Middle East, including efficiencies from digitising paper-based processes. Removing the need to scan or copy multiple documents multiple times is not only time efficient but also saves on paper. The time saving frees people up to focus on more value-added activities, which is a return on investment of having a single frictionless platform.
He goes on to suggest that having systems that can work together, as well as a consistent approach to data management, enables information to be easily stored and makes the quality of information indisputable. An unintended benefit is that having a digital twin improves the quality of work from staff because they realise everything is being captured, recorded and monitored. Integration across the ecosystem as well as rationalisation and standardisation, are being increasingly addressed in the region, he notes.
“There’s an innovative culture here and the Middle East is leading in some key digital transformation areas. The Dubai 3D Printing Strategy mandates that by 2030, at least 25% of every new building in Dubai will use 3D printing technology. Also, blockchain technology is being heavily implemented by the Dubai government for services ranging from remittances to retail transactions and is an area that Dubai is looking to lead in generally,” Senghani says.
“We’re anticipating that these innovations will inevitably impact and shift over to the construction industry. We just need to take time to identify the best use cases for it, but already in terms of security, we can see the value of removing that third party to guarantee trust.”
He cites developments in Saudi Arabia where cities such as Neom and Al Qiddiya are being developed from the ground up, which will provide a unique opportunity to embed digital from the beginning.
“With all of this, though, we still see obstacles to digital transformation. Talent is a challenge because it’s rare to find someone with a technology background who also understands the construction industry,” he points out. “At AECOM, we’re bringing in people from places like the gaming industry and other tech industries to help shape the digital skills we have available. Additionally, we’re observing the way other industries such as manufacturing and finance have successfully adopted and embraced digital for the betterment of their respective fields.”
The industry needs to encourage people from these backgrounds to see they have a career opportunity in construction, and Senghani believes that’s going to take a concerted effort to invest in technology, eradicating the perception that technology is for every other industry but construction.
“In the Middle East, implementing change can be tough because there are so many hoops to jump through. Construction is a heavily regulated industry and it can seem quite expensive to implement digital transformation if you don’t look at the long-term value you receive. To some businesses it can feel like a leap of faith, because the benefits can seem intangible; this is because there are some benefits that are not easy to put a monetary value against.
“But there’s definitely a momentum in the industry and a willingness to change. The businesses that have successfully implemented digital transformation have been those that have encouraged adoption among their staff from the outset. A lot of this is down to communication. You need to define a plan and communicate this to the business, so everyone knows what is happening and when but also ensures they understand why the change is important.”
Overall, there are a lot of positives to take from what is happening in construction in the Middle East. Globally, it feels like we’re at a tipping point for digital transformation in the industry, and while it won’t be easy, successes that can be seen in places like Dubai and Saudi Arabia will help to encourage this and perhaps change the mindset of those who feel it is too difficult and not worth it.