Are we ready to lead digital transformation — and not let it lead us?
The architecture, engineering, and construction industry has yet to agree on what the rise of Industry 4.0 and digital transformation means for the industry and they need to take a step forward and take charge
Industry 4.0, or the new age of data, is unsettling the way we work. Advances in machine learning, increases in available data, and the sheer availability of information are changing our expectations of, and interactions with, the world.
What does this mean for those of us who imagine, plan, and design? Despite acknowledging the rising tide of digital transformation, the architecture, engineering, and construction industry has yet to agree on what this means for us, let alone take steps to harness its force for our good.
What’s holding us back?
A few years ago, Arup identified four potential stumbling blocks to transformation that provide insight for the challenge across the wider industry: culture, leadership, awareness, and skill.
Culture cuts both ways — there’s enthusiasm for innovation and resistance to change at every firm. Resistance may arise from not wanting to be automated out of a job or belief that current methods and solutions are already perfect.
Most senior leaders can identify the threats, challenges and opportunities associated with digital transformation but could be far clearer about the tangible actions needed to make transformation happen. Project leaders, under sharp deadline and cost pressures, find it hard to do things differently.
We find it hard to imagine what might be possible with digital until we have seen it. Building awareness is best done through tangible examples, but these are hard to find, as is the time needed to research them.
And finally, skill: we need new skills that were not even imagined when many of us were in school. How should we get access to these? What should we learn ourselves? Which new skills do we need to hire? How do we recognize “good” when we don’t have experience?
Any path to digital transformation must address these challenges and find the money and drive to make change. It’s clear that the structure of the industry is changing. If we don’t match the technological transformations we see around us with those of our own, we’ll continue to fall behind as expertise is trumped by data availability.
The following industry trends illustrate the changing the expertise profile of firms in the industry and alter how we manage risk.
Equipment vendors are expanding into consulting
Let’s start with elevator companies. Many manufacturers now heavily instrument their equipment so that they know how much it is being used and when maintenance might be needed. It’s clear how this can help — understanding journey comfort, energy use, reliability, and cost is all in the business of elevator supply and operation.
But they also gather data about how lifts are being used, length of expected wait times, whether they run full or empty, and whether there are unexpected congestion points. This data allows lift companies to become vertical transportation consultants — a role that they previously would not have held.
This can create a conflict and a risk: the vendor is now recommending the number of elevators to achieve desired wait times. And it’s possible to imagine a not-too-distant future where an equipment conglomerate might provide all the advice needed for all the equipment in a building.
Software vendors are expanding into design
Over the last 40 years, the design industry has transferred almost all its production from hand drawings on vellum to models constructed using the software of one or two providers. These providers are offering more and more services, including the great convenience of routine calculation, which is leading to data transfer from consultants’ heads to vendor tools. This has several disruptive implications.
First, software vendors tend to know what kinds of calculations are being done using their tools, how often, and by whom. As a result, they will eventually be able to provide benchmark data across a much larger range of situations than anyone else — but this data may not be transparent and, therefore, could be misapplied.
Second, there’s great convenience in building and doing calculations within models. These tools may then be released to anyone with whom models are shared. Reuse of these may lead to inappropriate usage of calculations (for example to different codes) as well as trampling intellectual property agreements and transferring expertise from people to tools.
Better building models are changing risk distribution in design contracts
Back in the dark ages, when drawings were done on vellum, changes were difficult to make. As 3D modeling has increased, the expectation around the level of detail and the amount of coordination has started to shift from the contractor to the consultant. This has led some owners to design-build contracts (which move project responsibility to the contractor), with others maintaining a traditional design-bid-build arrangement but with higher expectations for design coordination. These changes help to manage inevitable losses in knowledge and value when information is passed between teams but change risk sharing.
Construction and property management companies are vertically integrating
Coworking companies have grown from providing coworking space to acting as facilities providers for big corporations, while also developing designs, overseeing construction, and keeping a careful eye on all the data that is generated. Their venture-capital-funded research has allowed them to become experts in modern office use patterns and to support hot-desking and other practices that have always been challenging in corporate offices. Data enables the realization of improved value, which has led to the rapid expansion of these types of spaces.
How can we engage?
It’s not immediately obvious what design, construction, and property management firms should do to enter the digital world. If it were, it would have happened by now and there’d be no reason to have this conversation. Over the past few years at Arup, however, we have been exploring what I think are two easy access points for our industry.
First, review the business, or the processes within it, to find opportunities to solve existing challenges using a data-driven or digital approach. In many cases it’s easier to focus on a specific issue — one where frustration is running high or where there is high risk, because this motivates leadership. Aspects like safety, productivity, materials management, information management, or waste management are often good candidates.
Second, identify technologies to see whether they have applications in your business. One example might be robotic process automation, which could be adopted to solve one issue and then find other applications, as awareness and skill increase. Another might be augmented reality, which is useful for showing clients buildings that don’t yet exist and may trigger other ideas for change.
A conscientious path is key
Digital disruption will evolve our means of production, our ways of working, and how we handle risk. As the balance of risks and value continues to shift, with vendors and software providers expanding into design and consulting, we must become digital champions, establishing trusted structures and processes to address and enforce responsibility.
By finding pain points and embracing tech we can bring the right technology to bear and drive enterprise-wide solutions. And by identifying skills, recognizing our habits, creating actionable plans, and stoking enthusiasm, we can inspire and lead a cultural transformation to approach our work through a digital-first lens.
We need only look at the tech industry’s current crisis of accountability to realize ensuring a conscientious path for our industry’s transformation is much more urgent than we might think. It is not only our opportunity, but our responsibility, to act while we can.