Did you know?
Construction is one of the world’s least digitised industries, according to the McKinsey Global Institute (MGI) digitisation index.
This is due to a range of industry specific challenges, such as rolling out technology across multiple sites, and working with a range of stakeholders, sub-contractors and suppliers who may have little interest in changing their practices.
Traditionally, innovation has also not been a priority in the sector. As a result, research and development spending as a percentage of revenues lags other industries:
Aeronautics > 4.5%
Automotive > 3.5%
Construction < 1%
But the cost of the status quo is far too high; without digitisation large construction projects typically:
take 20% longer to complete
come in up to 80% over budget
Digital transformation is inevitable
A culture of deliberate innovation and investment – while maintaining business as usual – is essential to future-proofing any organisation. Early digital adopters are already reaping the benefits with:
• Lower administration costs
• Faster and more efficient task completion
• Better financial control and risk management
• Improved communication and collaboration
“Digital transformation in construction will result in productivity gains of 14-15% .” – McKinsey Global Institute, 2017
Productivity increases with digitisation
2020 is a turning point
But 2020 is a time of sweeping change; the COVID-19 pandemic has accelerated trends for digital investment across all industry sectors, including construction. Most businesses now see digital enablement as critical to remaining competitive in the ‘new normal’.
“In just the first few months of the pandemic, 96% of business-to-business organisations shifted their operating model to emphasise digitally enabled self-serve, remote and contactless operations.” – McKinsey & Co, ‘From defense tooffense: Digital B2B services in the next normal’August 28, 2020
Specifically, digitisation enables remote work practices and real-time collaboration. This means that projects can remain coordinated – and on track – between stakeholders in the office, on the work site, and in the home.
With improved integration of technology into business processes, companies can:
• Minimise risk to operations
• Maintain project delivery, and
• Maximise safety for employees and sub-contractors.
All the while, digitisation also generates clear and quantifiable efficiency and productivity gains for the organisation.
2021 “future ready”
In 2021 and beyond, governments around the world are expected to mitigate the economic effects of the pandemic by investing in large-scale infrastructure and construction projects.
These developments will be huge and complex undertakings, requiring an extensive labour force for delivery; the goal is to put people back into work to stimulate economies.
The companies that win these contracts will need to demonstrate that they have the track record, scale, expertise, proven methodologies, as well as technologies, systems and processes in place to deliver projects on time, to brief and to budget.
This means that investing in productivity and efficiency – and embracing digital transformation – have never been so important. Construction firms that have adopted new technologies, tools and approaches will have a clear competitive advantage over digital laggards.
Going digital at Diona
Diona is an Australian specialist in multi-utility infrastructure design and construction. The company has recently implemented accounts payable automation solution, RapidAP, and is committed to further integrating technology into the business in response to COVID-19.
“Responding to COVID-19 has been a team effort withcommunication and collaboration key. Whilst 2020 has been challenging, as a leading infrastructure, technology andengineering services provider, we have an integral role inhelping re-build the economy.” Peter Massey, Acting Executive General Manager, Diona
Diona’s accounts payable staff can now process twice the volume of invoices they could prior to automation, while simultaneously bringing down costs and approval times and relieving stress on people.
By striving to get ahead of the digital curve, Diona will be better able to respond to the threats and opportunities of the future.