Constructing a smarter building industry in Australia

Digital maturity in the Australian construction industry is fragmented according to the Australian Broadband Advisory Council’s Construction Expert Working Group scoping study, which looked into opportunities and barriers for the take up of tech in the construction sector.

The study also found that the take up of digital technologies varies significantly across industry segments, and between tier one and tier two firms and small business. It suggested that the take up of digital technologies was significantly affected by the adversarial and competitive nature of the local construction sector.

It also recommended that more needed to be done to encourage smaller firms to digitise their workflows and processes, including lifting their awareness of the potential benefits of such a move.

The fragmented nature of digital maturity in the Australian construction sector is fairly easy to see, says Dushyant Shrivastava, head of digital for the Australian arm of multinational construction company Laing O’Rourke. “When you compare construction to other sectors such as automotive or aviation, digital adoption has been much slower,” Shrivastava tells CIO Australia.

Laing O’Rourke, as a top tier player in the local construction sector, holds a position of relative leadership in the Australian market in terms of its tech posture. But that doesn’t mean Shrivastava doesn’t see the areas where the rest of the industry falls short when it comes to digital standing.

The construction industry has conventionally been a relatively low margin business landscape, says Shrivastava, and so it often witnesses races to the bottom to win work. This means, decisions are frequently made in terms of cost rather than value, which can be an inhibitor to innovation as the use of digital technologies is believed to increase productivity, streamline processes, and improve margins.

The sheer degree of fragmentation across the construction sector is another challenge to digital take up in the building industry, says Shrivastava, is.

“It is not a highly integrated value chain, so you are always relying on other players within the ecosystem. Even if you had the highest level of digital maturity in relative terms, you’re only as strong as your weakest link,” Shrivastava says.

Digital adoption can be accelerated through public and private sectors’ partnerships

While Shrivastava doesn’t shy away from the fact that there is room for improvement in the digital space across the construction sector, he chooses to look at the opportunities rather than the constraints—but it will require a team effort of public and private sector clients, constructors, and the supply chain to get the whole industry on track.

“Certainly, the impetus and enthusiasm within the sector is there—digital innovation is becoming a consistent narrative for all organisations,” he says.

Government can play a role in providing a more strategic direction for the industry’s uptake of digital technology, says Shrivastava, Singapore and the UK governments are starting to play an intrinsic role in mandating certain standards and setting baselines for digital adoption.

Being a private multibillion-dollar organisation certainly helps put Laing O’Rourke ahead when it comes to digital adoption, but the company has focused on being at the top. Laing O’Rourke has dedicated operational teams focused on digital engineering and project information management, and it also hires people from outside the industry, to promote different ways of thinking.

“Inside tier one constructors, the digital narrative tends to revolve around 3D modelling or BIM [building information modelling]. At Laing O’Rourke we take an integration-centric approach to digital. For us, it’s not about models and outputs, it’s more about how we are driving model-based integration across the project lifecycle, how we are integrating the outputs through our systems and processes across the project lifecycle,” Shrivastava says.

However, Shrivastava stresses that Laing O’Rourke doesn’t do digital for the sake of doing digital alone—it is a very purpose-driven approach. And so, although modelling is a big part of its digital capability the company’s broader digital play is largely about end-to-end integration with a view to solving specific problems.

In search of industry cohesion

Defining and thinking about the specific problem that needs to be solved is a core element in the ongoing digital journey of fellow construction giant Lendlease. And one of the problems Lendlease has been trying to solve has been around finding coordinated and common ways of working across the business and across the industry.

A problem-focused approach has seen industry players end up with multiple technologies with purposes that crossover in variable and inconsistent ways, making it relatively difficult to find comprehensive solutions that everyone can use, says David Lipscomb, one of two co-CIOs at LendLease.

“To really get a much more cohesive tech landscape, it [the construction industry] needs to reflect a more cohesive working environment, with collaboration at a higher level,” Lipscomb tells CIO Australia. “I think it’s kind of interesting, because when you look down at a project level, you have high levels of collaboration between people communicating on incredibly complex tasks every day. But the industry, as a whole, has found it hard to lift that up.”

Like Shrivastava, Lipscomb can see how the nature of the local construction industry, especially its fragmentation, has stifled the uptake of digital technology to some degree. This has been further compounded by differences in compliance laws in the respective regions that projects take place.

“It is a challenge to create consistency and cohesion in that environment. And I think that’s the big challenge for the industry. I don’t think any particular software is necessarily going to solve that; I don’t think any particular company itself is going to solve that,” Lipscomb says.

Instead, coordination across organisations and throughout the industry could help to usher in a more cohesive landscape, giving rise to a digital grounding that would benefit more players in the sector.

Lendlease has been working internally on coordination across key areas to help provide such cohesion, investing in designing and building its own solutions to fill some of the gaps it sees in the market.

How Lendlease used digital tech to create internal coordination

A key solution Lendlease has built to achieve such coordination is a platform called One Lendlease Interactive digital mentor platform, or Oli, designed to provide a project management framework to help Lendlease staff across the company follow common processes.

“This is a digitised way to really start to visualise our pipeline, to understand our investment decisions, to speed up the decision [making] process and, ultimately, get a much better handle on risk as we work through our pipeline,” Lipscomb says.

Lendlease

Indeed, it is claimed the OLi platform has helped Lendlease make great strides toward attaining a level of understanding around the types of information it wants to capture across the business that hadn’t been available previously. Ultimately, the solution helps Lendlease deal with something many, possibly all, construction businesses struggle with managing risk when building out a pipeline of the projects they want to undertake.

The platform, which was rolled out in late 2020, has automated the process underpinning the company’s investment profile for construction. This, in turn, is saving Lendlease a lot of time, allowing its people to focus more on understanding client needs and defining key project achievements.

“[One] of the benefits of this investment is taking risk out of how we manage our projects, to get a better result from the projects. Some of those results aren’t seen until two or three years into the initiative, but the key for us is getting better management and understanding of the data of our projects and how we run them. And then, the output gives us that assurance to be able to invest further in terms of what other opportunities there might be to capture data and manage it in a different way to what we’ve done [previously],” Lipscomb says.

From a corporate perspective, the company is using this digital initiative, and others like it, to see how it can better leverage data and utilise it for smarter tools and artificial intelligence (AI)-powered capabilities, giving it the grounding to move forward in its efforts to release better quality products.

One of its keys to success is the support from Lendlease’s leadership in “making the most of the fact that we are a global enterprise”, says Lipscomb.

 “And that’s not based around centralisation and people defining a global process, it’s based around collaboration and working with each of the businesses we have around the world to more deeply understand what’s going to be impactful,” Lipscomb says.

Find the digital transformation purpose

When it comes to embarking on a digital journey an organisation must determine what is most impactful, its core purpose, and the specific problem it is trying to solve.

One of the best ways Shrivastava thinks other players in the local construction industry can become more digitally mature beyond simply articulating the specific problem they are trying to solve is to determine their purpose.

“If I reflect on my experiences outside of construction and then at Laing O’Rourke, first and foremost I’d say having a very clear sense of purpose is critical. Otherwise, you can waste money and you start to see a lot of digital theatrics without delivering any tangible outcomes,” Shrivastava says.

The way to do this is by first identifying the problem that needs to be solved, which would then translate into a clear strategy on how to realise that purpose, says Shrivastava.

“My strong recommendation would be to then overlay that with a value-driven approach. It allows you to consistently monitor and course correct to make sure you are generating outputs and not just economic value,” he says.

Additionally, to achieve effective digital take up, strong executive sponsorship is needed—not just lip service, but real support from the top levels of leadership.

“The leadership team needs to be committed and follow through on that commitment with investment and funding,” Shrivastava says.

Perhaps most importantly, Shrivastava suggests that digital journeys do not need to be taken alone. “Look to establish the right ecosystem around you, the right partners, whether it’s start-ups, whether it is established technology firms, whether it’s consulting firms, you need that level of support,” he says.

Finally, Shrivastava recommends that other players in the local building industry wanting to ramp up their digital presence and prowess should not attempt to undertake a large-scale transformation all at once. “It’s good to have a grand vision as a signpost, but then tackle smaller pieces and achieve some runs on the board before you start to develop the coalition of the willing,” he says.