Digital Transformation of Construction Enterprises: a Long Way to Go!

I mentioned the concept of the digital building at the China AEC Industry Summit last year, and Glodon released the  White Paper on Digital Building in  January this year. In my opinion, digital building should not only be a concept but also be the development strategy of an enterprise or even an industry, being a part of our enterprise and project development plan and the action of every employee. The digitalization of enterprises has made great progress in the past two years, but also encountered many difficulties and obstacles. Therefore, I would like to take the opportunity of speaking at the summit to discuss with you what is the connotation of digital building. How should digital building be deeply combined with management, especially in construction enterprises?

Three factors restricting the development of the construction industry

With the progress of society and the development of the times, all industries will face new opportunities and challenges. For the construction industry, there are many disadvantages on the road of development, among which three factors will be important obstacles to the development of the construction industry, namely, aging, safety accidents and low productivity.

As an aging society is approaching in many countries and places, the problem of aging workers appears in various industries, especially in the construction industry. Even in countries such as the United States, where the overall aging rate of the labor force is low, the problem is still salient in the construction industry. In addition, taking a global view, safety has always been an inevitable topic in the building field. Not only in China but also in developed countries such as Japan and Australia, the accidents in the construction industry are also the most in all industries. Even in the United States, which attaches great importance to personal safety, the number of deaths per year in the construction industry is also been over 800 in recent years. The last and most fundamental problem is low productivity. According to the survey of 41 major economies accounting for 96% of global GDP, the productivity of the manufacturing industry is higher than the average value of all industries, but the figure of the construction industry is far lower than the average value of all industries.

The construction industry is most similar to the manufacturing industry in terms of industry form. To solve the problems of aging, safety, and productivity, it is necessary to learn from the development direction of the manufacturing industry. At present, the European Union is pushing the implementation of Industry 4.0 in the construction industry, supported by core technologies such as digital twin and using BIM paradigm to truly realize the modernization of the construction industry, which is similar to the digital building proposed by Glodon in many aspects.

Digital transformation, the only opportunity for the industry

In many European countries, the development of the digitalization of the construction industry is far beyond our imagination. No matter in the relatively large countries such as Britain, Germany and Italy, or the small countries such as Ireland and Portugal, the Construction Industry 4.0 has been pushed to the strategic height of the industry without exception. It is generally believed that upgrading to the Construction Industry 4.0 will be the only opportunity for the current generation of the industry players.

Similarly, as an important participant of the industry, China also needs to keep pace with the times, embrace the digital transformation of the industry and regard it as an important development strategy. In this regard, there is a clear goal for the proposed digital building, that is, by 2025, the progress of the project can be accelerated by 30%, the cost can be reduced by 50%, the emission of carbon dioxide can be reduced by 30%, and there will be no quality defects and no safety accidents. Of course, this is not our imagination. The goal is based on the ten-year development goal of the construction industry formulated by the UK government in 2015. During the research, we also found that in addition to the UK, many countries have clearly defined the long-term development direction. Among them, Ireland proposed to achieve the goal of accelerating the project progress of the construction industry by 20%, reducing the capital cost by 20% and increasing the export by 20% in 2021. If we still doubt whether the cost reduction of 10% and the project progress acceleration of 10% can be achieved, how can we believe that these countries with relatively mature construction industries are still setting such high goals and are going all out to achieve them?

In the face of aging workers, safety requirements, insufficient productivity, project delay, and other problems, we cannot tailor effective solutions separately for each. We need to see through the surface to perceive the essence and find the most effective measures to solve the main problems. Digital building shall be one of the effective means to help the upgrading of the construction industry. Under the general trend of digital transformation, only by actively embracing the transformation, and leading the industrial transformation with science and technology can the construction industry achieve sustainable and healthy development. Of course, the transformation and upgrading of the construction industry must not be achieved only in a certain construction stage but requires the upgrading of the whole building process. It is relay on not only the promotion and application of a certain technology alone but also the upgrading of the whole production factors of the whole industry. Moreover, it is not a single party that can complete the work independently, but requires the joint efforts of all parties involved in the construction process. This requires a platform to build an ecology-digital building platform and ecology. To realize digital building, BIM, cloud, big data, IoT, mobile internet, AI, 3D printing, VR, AR, blockchain and other new technologies applied in the industry shall be applied in the industry to exert great value in the three stages of a new design, new construction and new operation and maintenance.

"New construction" is a bright hope on the road of digital transformation of construction enterprises

For construction enterprises, the difficulties and obstacles in the process of digital transformation are multi-dimensional. For this reason, we have drawn a blueprint of the "new construction" business for construction enterprises. According to the reality, we can divide the business of construction enterprises into two layers: "project-level" and "enterprise-level". The main process at the project level includes four stages: project planning, construction preparation, construction implementation and project delivery. The focus of these stages is to track and manage workers, machines, material and environment. However, the enterprise level is to manage finance, technology and risk as a whole. Based on our understanding of the business, we have proposed "BIM Construction" and "Smart Site" solutions for projects, and "Digital Enterprise" solutions for enterprises, in the expectation of providing construction enterprises with an encompassing solution for their digital transformation.

Now, let me first talk about "BIM Construction". Many people mistakenly believe that BIM is nothing more than developing a 3D building model. I think, however, we need to consider BIM as a model center, a data center, and an application center in its application. While the model center is a key presentation of digitization, the data center integrates data by various methods timely and accurately, attaching non-model data with models to form a comprehensive model-based data system which makes it possible for applications in the BIM as the application center to generate greater value. So, what value can the application center bring about? Short answer: delicacy management. Specifically, it means every component, process and post is well managed to realize the delicacy management of project progress, cost, quality, safety and other aspects. That is the "BIM Construction" solution from our perspective.

The second thing is " Smart Site". Construction enterprises today have made many attempts on building their smart sites, following their differentiated understandings of "smart" respectively. Instead of "smart", we believe that "site" lies in the core of the concept, and it entails the functions as the center of the IoT, data processing, and intelligent algorithms.

The IoT enables us to collect and process data of the construction site, and support the delicacy management of workers, machines, materials, methods, and the environment with the help of intelligent algorithms. Please note that the essential part of the smart site concept is not a single smart device, but a reasonable combination of multiple smart devices for the intelligent processing of valid input data, to provide a basis for the delicacy management of all influencing factors in a project.

Third, let’s look at the "digital enterprises", which are so distinguished from their traditional counterparts. While most traditional information management systems transmit data by sending reports, a pretty inefficient way that greatly curbs value growth, digital enterprises can associate with the data of the "BIM construction" and the "smart site" solutions to provide executives with insights into a project in real-time, and enable real-time data presentation for decision-makers to conduct more in-depth strategic analysis.

Bystanders are likely to be eliminated in the waves of change

The digital building platform is a great idea with wonderful visions. More importantly, it is not something out of reach. Safety helmets, for example, are indispensable gears for workers on a construction site. By embedding a smart chip into every safety helmet and connecting them to the cloud of a project with the help of IoT, the intelligent management of all workers of the project is made possible. The identities of the workers, hazards in their surroundings, and other key data of the construction site can be displayed on the terminal throughout the project, which will significantly improve productivity and delicacy management. So, digital building is more than just an idea. It is also an action that can be practiced in the real world. 

In my opinion, construction enterprises should put digital building into practice also based on their development strategies, human resources, and government policies. Watching the evolution of digital building as a bystander, you will soon find yourself lagging far behind the leading enterprises of the industry. At the turning point of a new technological trend, one step behind may means the risk of missing a never-returning opportunity. This is particularly true for leading construction enterprises. The first-mover advantage will become more obvious on the journey of making changes. To make digital building one of our growth strategies, decision-makers must take this change seriously and attach top priority to it. They must rule out isolated information islands in the enterprise system design, use BIM paradigm to change the mindset of production, business and other departments, and figure out the problems to be solved with tools so that the system can work at full capacity and the business processes can be adjusted to support new information tools. As construction enterprises, we can first put forward an overall plan for digital transformation and implement it in steps. I believe that a truly digitized information system will make the management of a construction enterprise easier, thereby bringing greater benefits to it.