Take the construction and engineering industry, where projects are becoming increasingly complex, but the adoption of new technology has been slow.
Cost was cited as a major reason by 218 senior industry executives polled by KPMG for failing to take the lead in the adoption of new technology. In fact, just 8% of respondents considered themselves to be “cutting edge technology visionaries”, while 69% said they were either “followers” or “behind the curve”.
Tools now at the industry’s disposal include robots to build, dig or drive; drones to monitor project status; smart sensors to track people on sites and advanced design and data programs to model ever-more complex structures.
It’s possible to buy an oscillating saw in shops these days for under $100, but more advanced equipments for the commercial sector can cost tens of thousands of dollars each. Advanced software can also cost thousands, while industrial robots can easily run into the hundreds of thousands of dollars.
“If we can see an immediate cost benefit to our clients, we’ll implement, and if not, it will remain on the shelf for someone else to experiment,” one senior executive told the consultancy. “We are all about proven solutions and, quite frankly, don’t have the profit margins to experiment on the leading-edge.”
The problem is that construction projects are getting so complex that industry leaders may have little choice but to start spending on the latest gadgets. And those that move the fastest stand to forge a significant competitive advantage.
Mines, for example, are getting deeper, bridges are getting longer and buildings are getting taller. Construction projects are also facing more pressure to comply with environmental standards, while designers come up with more exotic shapes and features for the luxury market.
Two-thirds of respondents to KPMG acknowledged that project risks are increasing.
“When you factor in the 60% that are seeing rising project volume, then it’s evident the industry has to find a better way to manage complexity if it wants to avoid failures, delays and cost overruns,” KPMG said.
It advises that business leaders start by getting the basics right: establishing strong internal controls, ensuring systems are related and mastering proven digital solutions before delving into the unknown.
Then it’s time to develop a technology strategy that pulls in tech talent to devise a road map updated every six months. New technology should be surveyed in advance to assess the potential viability of innovations such as drones to specific projects.
Being prepared to collaborate with outside partners is also crucial, according to Phillipe Bonnave, CEO of French construction giant Bouygues.
“We have to share our own areas of expertise with third parties and combine them with new, non-core disciplines,” he said.
“Our aim is to connect with those who are imagining the world of tomorrow, whether they are start-ups, universities or larger companies. Tomorrow, no one will innovate in isolation.”