Digital transformation of the construction sector: A work in progress
written by – Mr. Mangesh Wadaje is Director & CEO at Highbar Technocrat Limited.
Amid the conundrum of ‘Digital India’ and technology penetration at the grassroots levels, the strategic construction and infrastructure industry of India remains ‘Digitally Immature’. While technology transformation is on its way, the rate of adoption is abysmally slow.
Digitisation and automation of the construction sector of India is a long-overdue phenomenon. Despite the willingness of the construction professionals, challenges such as skilled operators and attached costs keep them from embracing technology. Though construction companies across India are prioritising the digital makeover, a lack of digital maturity and the absence of a clear digital road map are keeping the industry from harnessing the benefits of the transformation. A recent report by International Data Corporation, based on a survey of construction professionals across the globe, puts forth the clear picture in this regard.
Digital transformation trends
According to a report jointly developed by International Data Centre and global technology major Autodesk, over 50 percent of India’s construction companies, including those involved in railways, bridges, roads, and housing projects, spend a meager one to three percent of their annual turnover on technology assimilation and upgradation, while over 33 percent of the companies spend three to five percent of their annual turnover.
Among the surveyed companies, over 66 percent of companies are prioritising their digital transformation. In terms of building a roadmap towards adopting technology, 35 percent companies are planning to establish a roadmap within the next 12 months. This underscores the growing inclination of construction companies towards technology. However, 24 percent of companies still have no plans to do so.
Autodesk has highlighted that Europe and USA score way higher than the Asia-Pacific region in digital maturity. In the Asia-Pacific region, while Japan is the most digitally mature country, China and India are the least mature. This can be substantiated by the fact that 72 percent of the construction companies in India are in the early stages of adopting technology in their day-to-day operations.
According to the report, while the Coronavirus pandemic will increase the pace and requirement of technology adoption in India, domestic demand, and the urge to complete projects on-time and on-budget (natural for a developing country) will also fuel the adoption of technologies such as Building Information Modelling, among others.
Highlighting the importance of technology amid COVID-19 crisis, Mangesh Wadaje, CEO, Highbar Technocrat Limited, a company specialising in IT solutions for construction and infrastructure companies, says, “The COVID-19 pandemic has changed the construction business in many ways. Infrastructure players are adapting to the situation by adopting safer and smarter ways to conduct business and become more performance-oriented. The industry is prioritising automation and digitisation over labour-intensive systems, which will remain a driving force henceforth. The availability of smart construction technology and effective planning solutions are helping decision-makers become more data-centric for greater predictability, productivity, and profitability in their construction projects and back-office operations.”
Adoption of new technologies
The technologies related to the construction sector are primarily software oriented. Companies are adopting popular software solutions, such as
- Client Relationship Management (CRM) solutions
- Enterprise Resource Planning (ERP)
- Building Information Modelling (BIM) Softwares
- Project Management and Insights Solutions
- Bid Management Softwares
As cost management remains the priority in the Indian context, these softwares have been identified as top planned investments by most of the companies. In India, prominent organisations such as Airport Authority of India, ITC, Oberoi Realty, Bangalore International Airport, and Government-backed Delhi Metro as well as CPWD have mandated the use of advanced BIM technology adoption.
Digital deadlocks in the technological makeover
Despite all the efforts, the pace of adoption is still slow, and challenges are aplenty. Some of the ‘Digital Deadlocks’ highlighted by the report are noteworthy.
- Development of necessary skills and capabilities remains the foremost challenge for almost half of the construction companies (47 percent)
- Companies find it difficult to draw a strategic roadmap for the digital transformation. Over 40 percent of the construction companies found it difficult to form a companywide technology roadmap to prioritise investments.
- The digital transformation also requires an organisational overhaul. More than 40 percent of the companies found it tough to create an organisational structure with digital dominance.
“Factors such shortage of skilled workforce, supply chain inefficiencies, health concerns, and increasingly stringent government regulations are making it imperative for the industry to adopt technologies such as cloud computing, artificial intelligence, augmented reality, machine learning, and building information modeling, etc. Once promoted, these technological developments will revolutionise how infrastructure is perceived and managed in India,” says Wadaje.
Conclusively, unlocking the ‘Digital Deadlocks’ will help companies progress in their digital transformation journeys. While several organisations across the world have embraced digital ways of business, the construction industry is yet to reap the benefits fully. In the Indian context, the digital transformation of the construction industry can be further accelerated by the proactive recommendations of the Government to use 3D construction solutions in Government projects. While this will save unnecessary costs for the developer, it can also lower the final cost of dwellings constructed under affordable schemes such as Pradhan Mantri Awas Yojana.