Countries, cities and provinces are indelibly defined by their infrastructure, which is a strong propeller for the socio-economic growth of the geographies. In India alone, the construction industry accounts for 8 per cent of the total GDP while employing close to 57.5 million people.
There’s a lot that has evolved in the construction landscape with respect to how construction projects are managed and delivered. Technological innovations at breakneck speed have enabled the industry to successfully deliver ambitious projects like underwater railway tunnels, man-made islands and other marvels. In the last two decades itself, advancements like IoT connected sites and equipment, autonomous robots, AR/ VR, 3D printed buildings and parts have become a reality. But despite the development streak, the construction industry lags, where, globally there’s a 1.6 trillion dollar productivity gap in the construction sector where 90 per cent of the projects are either delayed or over-budget. In fact, India’s infrastructure from roads to ports and everything in between is already delayed by an average of 3.5 years.
The construction sector still relies on disparate databases for project management, manual record-keeping and legacy methods for construction. On the downside, the industry is also highly unregulated, which adds up to the situation. While the sector trails in tech adoption and investment, venture capitalists are betting big on construction technology. As per CB Insights, from 2015 to 2019, ConTech saw $5.1 billion in investments across 571 deals globally, which will also spearhead the movement for more streamlined and efficient industry. Considering the fragmented sector dynamics and shrinking efficiency margins, the sector was already ripe for disruption, and the COVID-19 pandemic is only going to dramatically accelerate the process where bold strategic steps will pave the way for revival from survival.
One of the key reasons for delayed projects is financial discrepancies, which can be a result of scope creep, inaccurate estimates, change orders, underestimation of project complexities, poor management and socio-economic factors as well. In fact, as per the Ministry of Statistics and Program Implementation, 401 projects out of 1701 central sector infrastructure projects reported cost overruns with the estimated cost of completion for all the projects rising from INR 20.65 trillion to INR 24.71 trillion.
Cost overruns can be exponentially detrimental to projects with stalled sites or dropped projects altogether. Next-generation project management solutions with robust cost control systems can effectively eliminate overshooting budget and provide real-time insights into the entire dollar lifecycle in a project. They can help manage each aspect of project finances right from idea conception to commissioning of a project, monitored through each change, delay and progressive stage. These cloud-based solutions can streamline and enhance productivity for each aspect of projects, from preconstruction, site management, health & safety, document management, RFIs and reporting. These integrated software utilise the data that construction firms have collected over the years in comparison with the current project data to help managers make informed-decisions, predict future outcomes and match job progress with the project costs. With the integration of Artificial Intelligence to the system, teams can also use the current and the past data to gain a competitive advantage on future bids and tenders as well.
Cutting-edge technologies like artificial intelligence, drone mapping and sensors can also highly enhance site productivity while making them more safe and quality compliant. Drones can be used and are being used to map sites for accurate real-time progress and creating 3D models of the progress. These scans can be compared across BIM models to determine site progress each day. Moreover, sensors installed through the sites can also monitor the equipment inventory, and deep learning can compare it across work schedules to identify any lapses in progress or even identify issues. Simple but powerful robots installed with cameras are very much capable of conducting inspections and quality checks in high-risk areas while documenting and mapping the entire project site. The digitisation process not only helps in maximising efficiency and profits but also in substantially minimising risks to human life with rigorous monitoring of the sites and safety compliance protocols.
Furthermore, these technological interventions are not just great for accomplishing tasks, but another advantage is the effortless documentation and log of all the information that they process, capture and communicate. The more data points the industry is able to capture, the easier it will be for the industry to transform and regularise itself, just like manufacturing and retail have managed to do. The data of success or the failure stories of these projects can pinpoint the recurring patterns in the functioning of organisations/ sites while also helping out a great deal in the predictive modelling for future projects.
Despite, a large number of associated risks in the construction industry, the overall profit inclusive of interest and taxes stands at only 5 per cent. But increasing tech adoption can empower teams to complete projects on or before the determined iron triangle. As per McKinsey, a profit pool of $265 billion awaits the disrupters of the construction industry, which is currently valued at 1.2 trillion dollars. Project teams that are quick to adapt to technologies will be able to claim the lion’s share of the pool, with a potential to double their profits from the current 5 to forecasted 10 per cent.
Economies of the future will be driven by good project management, enabling the disrupters to transform how construction activities are viewed and undertaken. At the same time, to ensure that the world meets its infrastructure, housing and economic goals required to sustain and grow, it becomes imperative for the construction sector to perform and deliver projects within their predetermined iron triangle.
(By Prasoon Shrivastava, Founder & CEO, Zepth)