Data and behaviours in construction

To maximise the potential of data in construction, behaviours, leadership and business models need to change. Ahead of his speaking role at ICE Shaping a Digital World, Brendan Morahan, of Invennt tells us why.

[edit] Introduction

At Invennt, we’re always having conversations with our partners and customers. After all, that’s the best way to think about the future of construction and how we can improve everything from strategy to operations and business development. It’s why we’ve partnered with ICE on a recent roundtable and forthcoming panel session at Shaping a Digital World on 25 September 2018.

We believe that thinking in new ways about big issues is of vital importance at a time when our sector is changing rapidly. Digital transformation and data abundance present a huge opportunity, but to realise it, we must shift approaches to business strategy, decision-making and leadership.

[edit] Construction is changing

Analysts predict that businesses will accelerate their adoption of big data and analytics, but what are the obstacles to doing so and where do they come from?

I believe that as an industry, we’re 'putting the cart before the horse' when it comes to data. There’s too much of an emphasis on the collection of data and not enough on how data can inform the whole construction process. It’s in danger of becoming a silo rather than implicit in the way people do business, and that will stop us from reaping the benefits.

It's also important to remember that data isn’t a silver bullet. Project management was once hailed as the saviour of the construction industry, that would lead to rising margins and better delivery, but in practice, this hasn’t happened. That’s not because project management doesn’t work, it’s because there are more important structural issues holding the industry back. Namely, that Tiers 1’s, who are subcontracting 80% of the work, can’t make any money.

To create an industry that can actually make profits and decent margins, you need to self-deliver with a group of trades rather than single specialisms. For example, Tier 2’s that can offer a package, perhaps not the whole package, but a sensible grouping of specialities with their own systems integration and project management. To make that work effectively you need a whole different set of data, and that is what we should be talking about.

This could be an alliance model or a single integrated supplier. The point is that by having a set of core competencies that can work directly for the client and offer superior value, while being able to manage problems using their own resources, will lead to a more efficient industry. Especially if this model can harness operational data as well as project management data. So what are the challenges with this model, and how can data help us overcome them?

[edit] You need an intelligent, capable client

If you look at some of the clients that have adopted this type of model, it hasn’t always worked. The cost of an additional and expensive layer of management isn’t justified, even if it is managing an unsophisticated client. This might seem insurmountable, but by gathering and analysing accurate cost data, these challenges can be minimised.

[edit] Demand-side data is needed to can adapt and adjust to a changing market

If you’re self-delivering the greater part of your projects, you need to know what is ahead of you, so you can anticipate and adapt accordingly. Main contractors used to self-deliver. They moved away from that model because of the vagaries in the market. That is where data and specifically predictive analytics comes into its own.

By combining demand side data with your own pipeline data, contractors can make informed decisions about how to adjust, scale and diversify in order to stay one step ahead of the market.

[edit] Know your strengths and how to play to them

All too often, construction businesses are bidding for the sake of it. At best this wastes time and at worst it results in taking on projects that are loss-making. Data can help you to understand your strengths and stop you from bidding on projects you are unlikely to win or that are unprofitable. This lets you focus on work that you can win and deliver profitably.

[edit] There’s a lack of strong leadership

The industry isn’t thinking long term, all too often businesses are just chasing their tails. They don’t necessarily have the training or ability to think more broadly. The leaders of construction businesses are good at what they do, but they are too focussed on short term shareholder value. As an industry we need to take data seriously, stop being so project focussed and take a long-term view.

It’s abundantly clear that construction needs to become more efficient, and operational data will help the industry to do so. To really make an impact, there needs to be a fundamental change to the business model. To do this, we need to make better use of demand-side data, so businesses can respond to a changing market. But is the leadership of the industry prepared to make this leap and do they have the skills required to leverage data to make it happen?

This article was originally published here on 6 Sept 2018 by ICE. It was written by Brendan Morahan, owner and Director, Invennt.

--The Institution of Civil Engineers

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