IFS Predictions for Engineering, Construction, Infrastructure
In 2020, we will see a continuation of last year’s move towards radically more efficient construction operations. Some of this will be due to digitalization of business processes, but real gains will have to do with technology used to change the business processes themselves. And we are not talking about small, incremental changes in efficiency.
Construction productivity lags so far behind other industries that to catch up, the industry must adopt, for the first time, enterprise-wide technology that will reduce timeline and budget failures, eliminate non-value-added work, compress timelines and let contractors deliver more value to asset owners with fewer resources.
Those industry challengers that embrace digital change will enjoy increased productivity through 2025
First the good news: the productivity of construction companies is set to increase 20 percent between 2020 and 2025. Now the bad: this is only going to apply to businesses that embrace new technologies and use them to substantially increase productivity.
For a lot of major construction contractors, this may look daunting. Tell a construction company they will need to use virtual reality and 4D planning in the design stage, mobility in the field and that procurement and manufacturing are going to involve 3D printing with an element of the internet of things (IoT), and that they must deliver building information modelling (BIM) data on the project, they are likely to balk at that much technology and change. Tell them robotics and drones will become central to construction and operations and that maintenance will involve laser scanning and they may not believe you. It is certainly a lot to get your head around. But the most important thing to note is that this doesn’t all have to be done at once.
The whole process becomes visible
Contractors today must implement the business systems to proactively monitor and manage the entire lifecycle of a construction project from contract award through to commissioning, and even provide maintenance and facilities management services after handover. This requires a move away from spreadsheet-driven project management unconnected to the accounting system of record and towards true enterprise resource planning (ERP) software.
When major construction companies like the UK’s Carillion go bankrupt, a lack of visibility and control are probably not only contributing factors, but more or less ensured that the people involved did not even know how much trouble they were in until it was much too late. Contractors need to move towards integrated applications to ensure proper governance, allowing the business, for the first time, to be managed properly. This centralized software environment can facilitate processes like building information modeling (BIM), which require that all data on a project be housed in a centralized data structure. An enterprise software environment can also be extended with new technologies, including data from the IoT-enabled assets and drones. In fact, construction already uses more drones than any other sector, with usage increasing 239 percent year on year, even surpassing mining, which has increased by 198 percent.
Contractors may use bits and pieces of transformational technology in their business today. But what is often missing is the right software environment to knit these technology elements together to drive real value. A drone used in construction inspection is a great thing as long as it’s able to report its findings to a project or asset structure easily and smoothly. Scanning for damage using laser technology works only if the information is going somewhere and analytics are being applied to ascertain underlying trends and issue work orders to resolve immediate problems found. Data from these exciting technologies only become valuable once they are introduced into the transactional system—ERP.
A centralized ERP system can also facilitate business processes common in other industries, including lean approaches to fabrication, inventory and labor scheduling. For 2019, I predicted a surge in offsite manufacturing in a number of disciplines, which I will echo in our second prediction. But offsite construction success is dependent on software with the built-in process flows of a shop environment—from shop orders, bills of materials to streamlined approaches to work center and equipment utilization.
(This is an excerpt from an article written by Kenny Ingram: IFS Global Industry Director for Engineering, Construction & Infrastructure)
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