The digital transformation will go beyond just implementing technology. Improved business intelligence will come from a combination of advancing technology, processes and people. Technology is an enabler of improved performance. The desired transformational outcomes will likely not be achieved by just implementing new technologies but by improving and re-engineering workflows and culture with repeatable business processes like the constructible process.
To follow are an aggregated set of basic best practices employed by some of the more innovative and transformational construction businesses we’ve met over the last few years.
1. Understanding Your Goals
The outcomes of digital transformation will be more valuable when they align with key strategic initiatives and economics within an organization. This starts at the highest level in an organization to be sure the strategy is understood and enacted.
The digital transformation will drive opportunities to improve core business elements such as:
AEC Service Provider
Every initiative should start with clear objectives, including why they are important and how success will be measured.
2. Organizational Readiness
While setting clear goals and strategy is vital, success will require the organization can execute it. Companies must assess if the initiative is strategically important, financially and structurally supported, and is adoptable. Here are some questions that can help.
Is the initiative strategically important?
Barton Malow Company is a Michigan-based self-perform contractor. They are a great example of setting clear goals for the company. At the top line, their goal is to double efficiency by their 100 year anniversary in 2024. The initiative is anchored with clear milestones including metrics for success. While leadership drove the importance, the initiative has become a key element to their culture, focus and execution. In addition, VolkerWessels’ strategy is to become a data-driven organization tied to key goals such as efficiency, developing new services and overcoming workforce skill gaps. This vision has driven a broad set of decisions on the path to digital transformation.
Is it financially supported?
Business Transformation requires more than a big budget for technology. Change requires an investment in people, through frequent communication and by investing in skill development. For processes to change, companies need to not only trust, but verify and provide support. Whether implementing a new way to do quantity take off or moving from design intent to fabrication-level models, mechanisms are needed to build trust and confidence in the re-engineered process. This may be accomplished via techniques such as peer reviews or automated quality checks. Furthermore, support is needed for those implementing new processes to help them see the value of the change. A conscious investment needs to be made in ensuring change is successful, sustainable, and repeatable within the organization.
Is it organizationally supported?
Organizational structures and assignments will evolve through this digital transformation. The introduction of virtual design and construction (VDC) talent has provided some early lessons into the importance of organizational structure. The very nature of VDC is to use the constructible data to optimize downstream processes. A company’s typical reaction is to create a new department called VDC. This means, in an already fragmented and siloed industry, yet another team is created. This in turn, can introduce more organizational challenges: “them versus us,” “new versus old” with departments such as pre-construction, estimating and scheduling. Companies want to bring in new processes, thinking and skill sets while at the same time, value the experiences and knowledge that exists in current staff. The optimal structures tend to be geared around how to evolve the company as a whole and bring staff forward. Rolling VDC principles and resources into existing functional areas or using matrixed approaches have become the current trends to improve organizational cohesion.
Is it adoptable?
With tight margins and unique projects, it is common to have business units or business areas to drive accountability. For example, a General Contractor (GC) may have a GC business area and one or many self-perform trades. It is not uncommon that these are treated as separate business units and even project numbers in the same company on the same project. To drive this digital transformation, how do companies ensure teams across functions and business areas are set up to drive innovation and efficiency? Similarly, for organizations that incentivize project managers on the profitability of their project, how do they keep them accountable and yet ensure they will support the change? There is not one answer. Adaptability in the organization needs to be a consideration and the right models employed to ensure accountability and support of strategic initiatives.
3. Is Your Data Ready?
Data is a key element in driving optimization, predictability and automation. Are companies capitalizing on their data to optimize and improve planning? They should consider questions such as:
- How many estimates have they done compared to the number of projects they have completed?
- How well do they know their productivity rates?
- How many days did it rain in Seattle last year?
- How are they leveraging data to decrease O&M costs?
Project data is a company's intellectual property (IP) and critical to optimizing performance, differentiating them and even enabling them to create new services in the marketplace. It is recommended that companies initiate the process to inventory the data they have (or could be capturing) and around the value the data could provide. It is important to build a culture that values this data as a core asset of the company with direction on how to capture, curate and use it. Technology such as content services and warehouses, historical project information (cost, productivity rates, etc.) and common data environments (CDE) are key enablers.