Digitalisation in the Building Industry

Digitalisation in the Building Industry 1

A Brief History of Digitalisation in the Building Industry

Digitalisation within the building industry has only slightly improved over the years. The results obtained from the ‘Digitalisation Index for SMEs 2018‘ show that the industry has only obtained 51 out of a possible 100 index points.

This is just an increase of 2 points on the previous year. Nevertheless, from the results of this study it’s clear that the construction industry still needs to improve its digital transformation.

The cross-sector average of 55 points highlights that the industry is 4 points below the average. It also shows that only 33% of the construction industry has ensured that digitalisation is part of their business strategy. This is 12% below the average across all industries.

However, 38% of companies surveyed have recorded that the advantages of conversion to digitalisation far outweigh the costs. This is particularly when they made an early investment into their digital future.

Digitalisation – The Building Industry is Trailing Behind

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The statistics show an increase in construction companies making improvements in their planning and use of digital Building Information Modelling (BIM). Additionally, it shows many companies utilising digitalisation, particularly the advantages of mobile device use at their wide-ranging work sites.

However, it is regrettable that the industry remains trailing behind other industries. Although there is a slight increase in digitalization implementation, it is difficult to deduce the industry’s reluctance in the face of the global transformations taking place.

Current Innovations and Trends

However, it is not all bad news in the construction industry. Given the advances in technology in recent years, those companies who have embraced digitalisation find themselves at the cutting edge of their industry.

3D Printing Technology

One prime example is in 3D printing, with one in ten companies now using this process. From architects and planners to project managers and contractors, many aspects of the construction industry are reaping the benefits of having three-dimensional models from a computer-aided design (CAD) at the touch of a button.

The transformation of one-dimensional drawings into a 3D model revolutionizes the industry. This tool especially works well for those companies who have fully integrated digitalisation into their every-day planning. So-much-so that a further 26% of companies want to follow this lead and implement digitalisation within two years.

Virtual and Augmented Reality

Other new developments proving the advantages of digitalisation are virtual and augmented reality. Virtual reality creates a walk-through simulation allowing the user to ‘visualise’ a room, building, or other structures. This allows you to see in ‘reality’ any faults or issues quickly, making room for re-adjustments to be made before the structure is actually built.

It allows all concerned in the building industry to ‘walk through’ their proposed project. Everyone from customers or owners to planners, contractors, and workers, can have a scope to help in safety training in a safe environment. 

Augmented reality differs from virtual reality in that it will allow the user to see a computer-generated structure or object super-imposed onto a real-life view and assess any impact it is likely to incur.

29% of construction companies are either currently using virtual and augmented reality applications. In other cases, some are planning to put them into action soon.

Improved Productivity

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Construction is a flourishing industry and is set to remain so for the foreseeable future. With the global population expansion and ever-growing need for homes to accommodate people, infrastructure construction and renovation, and low scale interest rates, many companies and private individuals are investing in concrete gold.

Maintaining your competitiveness in the ‘concrete jungle’ has never been more important. Therefore the expansion into digitalisation is a fundamental requirement to boost productivity. 

Companies now recognise the need for a better exchange of communication and information, not only within their own organisational structure but with their customers and partners.

Audio and web conferencing have become part of the daily routine for many. Meanwhile, more companies implement these simple but essential digital packages.

For others, mobile devices that record the working hours of their employees are fast becoming popular, especially as it eliminates the need for manual processes.

Companies must not forget about the importance of customer interaction. Customers today expect an instant response to their demands for information.

Digitalisation within a company, especially with employees out on a construction site, allows access to construction plans, schedules, and other important documentation via laptop or other mobile devices.

Effects of Digitalisation on Building Industry

Most companies who have transitioned to digitalisation, whatever their industry, are reaping the benefits, which includes:

  1. A more efficient order management system
  2. Usage of email, digital conferencing, and integrated calendar applications
  3. Quicker communication and responses to orders, requests, and access to information. 

Along with general digitalisation, more construction companies are actively using Cloud. These applications have many advantages. As well as being easy to use and adaptable, it is also very cost-efficient.

29% of construction companies now using digitalisation are making extensive use of IT infrastructures from the Cloud, a rise of 12% in just two years. 30% of those surveyed used platforms, and 31% use Cloud applications. These companies are best described as advanced Cloud users. 

Measurable impact on those companies has been highly successful, with 76% of companies reporting that business ideas are easier using Cloud solutions and 77% reporting an increase in the efficiency of internal processes and more flexibility throughout the organisation.

More companies are applying more digital automation to their various process chains, from the initial placing of an order and receipt management to implementation and outcome.

Digital Offers and Business Models

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Technological and digital advancements have a far-reaching impact in all walks of life and none more so than in the field of construction. 

These new developments have turned our homes into ‘Smart’ homes, where we can control the heating levels, open and close shutters or curtains, or even turn lights on and off just by using a smartphone. 24% of companies surveyed said they already offer their customers ‘Smart’ products. 

30% of construction companies analyse their customer data, thereby being in a position to offer individual products and services. This figure is gradually rising as companies see the advantages for themselves.

Digitalisation of Building Industry and the Increase in Turnover

Research has shown that digital transformation is cost-effective. Notably apparent is the example of the 10% of digital leaders who have reported exceptional improvements with digitalisation and the achievement of an index value of 88 points.

Likewise, they also reported above-average satisfaction with core business figures alongside reporting successes. For example, 87% of these digital trailblazers appreciate the number of new ideas and innovations accessible. This compares favorably with the normal average of 40% within the industry who agree.

Regarding customer acquisition, these digital leaders are also ahead of other construction companies, with a satisfaction rating of 79% compared with 48% throughout the rest of the industry. 

This is also reflected in sales, with 88% of digital leaders reporting satisfaction with sales compared with only 60% as an industry average. 54% of these top 10 companies reported a sales increase of 5% over last year. Once again, 14% higher than the rest of the industry.   

Digital Transformation Pays Off

None of this comes for free, with costs incurred in the investment of the new technologies and digital expertise. However, as we have shown, the benefits outweigh the cost, as 38% of companies have reported a further 38% reporting a balanced cost-benefit ratio.

Digital Competence

Digital technology requires digital competence, and companies must ensure they have in place employees with those competencies. 

No investment in new technology will transform a company without someone to operate the system. Unfortunately, digital knowledge and skills are severely lacking throughout the construction industry. 

However, all is not lost like 46% of companies, both management and workers, have expressed themselves open to digital change. It is now down to these companies to promote and develop digital skills among their workforce.

This may require forward-thinking in how this training is carried out. 64% still favor those classical procedures such as seminars and external companies.

Wrapping Up Digitalisation of the Building Industry

Digitalisation is the future, and the construction industry is just waking up to this. They realise that to remain competitive in today’s construction climate, they need to transform their company into a digital one without delay.

As we have shown, they are reacting. They are growing digitally, particularly in the past 12 months. Focusing on three digital fields of action; productivity, digital business models, and IT security and data protection.

It has been demonstrated here that there is still room for improvement, but those digital leaders who have led the way provide many incentives to other construction companies to follow their example. 

When Will You Start Your Digitalisation?

Here at KVP-Solution, we have over 30 years of experience in the construction and ancillary building trade. We can see the opportunities for small and medium-sized companies in digitalisation whilst keeping expenditure to the minimum.

Our expertise provides for companies resolutions that are inexpensive and flexible whilst maintaining simple CRM solutions. We understand customer data and communication issues and targeted digital marketing.

Technology can be as simple as a telephone and tablet, ensuring that you will always have the correct information at your fingertips at all times.

Contact us now and start your digitalisation with us right away.

Klaus Knops

Klaus Knops

Klaus is an experienced manager, CEO and entrepreneur with over 30 years in the construction industry as a manager and consultant, having lived in Europe and Latin America.

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