By Brad Barth
The construction industry is facing a once in a generation opportunity. The influx of projects expected to be created by the Infrastructure Investment and Jobs Act will spur the creation of a huge volume of capital project data that, if captured and analyzed effectively by the industry, could serve as a foundation to vastly improve project outcomes both now and into the future. As a result, the overall impact of the bill itself could be amplified through more efficient and cost-effective delivery of projects. By capturing and analyzing data from across the entire project lifecycle, the industry can generate unique insights that would allow for much more effective project control, more accurate budgets and schedules, improved work plans, and slicker coordination between project stakeholders. Altogether a win-win.
There’s more. The bill, which has cleared the Senate and now moves to the House, also includes a $100 million technology investment specifically for construction management. The intent is to accelerate the digital transformation already underway in the construction industry, driving efficiencies and productivity gains to get more value out of the massive investment coming to the nation’s roads, bridges, plants, and power grid. The bill itself does not outline specific types of technology that require investment. Instead, we can expect to see construction technology investments being made based on the outcomes that they are driving to achieve. Thus, the industry itself has quite a clear view on what it thinks would be most beneficial: better project control for improved project certainty and productivity.
BILLIONS AT STAKE
Estimating and project cost management, along with planning, scheduling, and risk management will be essential to the success of construction businesses—and by association, their projects—in the next 1 to 3 years. This is according to research conducted by InEight earlier this year which surveyed capital project and construction professionals at 300 large enterprises, to form the basis of its inaugural Global Capital Projects Outlook. Evidently, most construction professionals have become quite comfortable with the notion that digital transformation, executed in the right way, can deliver productivity improvements. In the context of the $1.2 trillion bill, even a 5% improvement creates tens of billions of dollars of opportunity to expand the project pipeline. Encouragingly, 83% of survey respondents in North America believe that we can expect to see an increase in projects being delivered on or ahead of schedule and budget in the near future. That is despite the fact that projects in the region currently go over budget about 50% of the time, by an average of 24%.
At the heart of improving project controls lies tracking past project performance through the data that gets generated at all stages of the project. Although the majority of North American owners and contractors alike already understand the importance of robust data analytics in improving project outcomes, almost all recognize they could be doing more with the data that they do collect. The industry has a short amount of time to ensure the right methodologies and frameworks are in place to best leverage the massive influx of data, and potential insights, that the forthcoming project pipeline will create. Without this concerted effort up front, the industry is at risk of failing to deliver on cost and schedule commitments that could ultimately erode the value of the bill’s investment.
Upgraded project controls software can also help solve a key issue that could jeopardize the very delivery on the forthcoming infrastructure project pipeline: talent. Finding qualified people at any level—whether project managers or craft workers—is already one of the construction industry’s greatest challenges. And while recent analysis suggests that the bill could boost employment by more than 880,000 jobs, with many roles created in construction and engineering, we can’t just assume there will be enough qualified people to fill the gap and keep projects moving. To deliver on this increased pipeline, construction project stakeholders need to become learning organizations that can take advantage of collective knowledge in order to scale quickly. Digital transformation is a big part of the answer, enabling new and less experienced employees to become effective much more quickly.
DIGITAL TRANSFORMATION TRENDS
Fortunately, organizations in the construction industry are already investing in digital transformation. A full 65% of organizations surveyed in the Global Capital Projects Outlook indicated that digital transformation represents their greatest growth opportunity, outranking even the economy. In effect, the fire that is driving investments in digitalization is already burning, with the infrastructure bill primed to add a massive amount of fuel to that fire. What’s more, when asked to rank the expected benefits of such technology investments, the top ranked response for contractors—at 61%—was higher productivity. That is an encouraging sign for an industry that has historically lagged others when it comes to productivity growth.
The increase in productivity coming from new construction management technologies will evolve from being a nice-to-have, competitive advantage to being absolutely essential. How else will the industry tackle a massive increase in the project pipeline without a massive increase in new employees to plan and execute those projects?
While the $100 million allocated in the Infrastructure Investment and Jobs Act to accelerate the deployment of digital construction technologies is a fraction of the $1.2 trillion total spend, it could have a transformational impact on the sector’s productivity. However, as of Oct 4, the legislation is stalled … will the bill pass the House?
While the $100 million allocated to improving construction technologies may be relatively small, when coupled with the trillion dollars in new project funding, the bill becomes the impetus for upgrading the industry’s ability to deliver work. By improving project certainty and productivity, project owners—along with their engineering and construction partners—will be able to eliminate some of the cost and schedule risk typically associated with large capital projects, enabling a greater percentage of the new funding to translate into actual value in the assets being constructed.
About the Author:
Brad Barth is chief product officer for InEight, a global leader in construction project management software. Its project controls platform provides real-time insights to minimize risks, improve operational efficiency, and control project costs. For more, visit ineight.com.
Modern Contractor Solutions, October 2021
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