Digital transformation in Construction: the Golden Thread

Summary

The UK Construction industry has significant challenges, outlined below and yet is not so different from other supply-chain dependent sectors.  This paper argues that there is much to learn from both Retail in terms of B2C expectations, and manufacturing, Aerospace and Defence in terms of efficiency. Above all it argues that the basics must be in place – a stage-gated workflow for the core value chain of winning work, planning, delivering and operating, and the virtuous cycle of learn and improve.

The challenge

The UK Construction Industry has not yet embraced change the way other sectors have.  As a result, many firms survive on meagre margins, others are losing money. In an industry where up to 75% of income is spent on the supply chain and the average operating margin of the top 25 firms is 1.2%, business is on a tightrope.

The squeeze from increasing labour cost and skills shortage, supply chain costs, new expectations and regulations are finally compelling firms to seek change, and those that innovate will win. Ernst & Young predict the top 15 firms will be halved by acquisition over the next five years.

In many cases Construction Firms are suffering ‘death by a thousand cuts’:

Construction firms like to grow by acquisition, a fast way to take on more market and reduce competition and own more of the supply chain. However, this also introduces further risks, and many of the shortcomings illustrated above arise from inconsistent and fragmented governance across subsidiaries.  IT with its new Digital flavour is central to turnaround and has the ability to transform, through new solutions combined with new ways of doing business.

Where to start?

Without a blueprint for the industry, it is easy to get overwhelmed. Businesses that operate as a matrix with numerous business verticals, segmented by acquisitions and driven by countless projects are a multi-layered, many-headed beast. Effective change in such an environment requires substantial and sustained momentum, but also requires achieving goals:

The legacy described above typically results in thousands of software products in large engineering firms, a significant proportion bespoke. There is duplication and gaps, data are inconsistent, businesses speak different data languages and ‘shadow IT’ in the verticals pursue different paths, making knowledge transfer and insight extremely difficult.  Governance is equally likely to require attention, and a business impatient for return on any investment will want to see benefits within months, not years.

Outside-in

An ‘outside in’ strategy recognises that any large engineering firm will be compelled to use a significant number of strategic tools such as Project Lifecycle Management, CAD or asset management platforms dictated by clients, subject-matter, local skills and technological advances and indeed they should do, to embrace agility and innovation. A much larger number of tactical tools will also be in place, growing with the Apps marketplace. To support these effectively, the enterprise platform needs to be agnostic, evolving and ubiquitous, rapidly deployable, highly scalable and able to integrate readily with strategic tools. It must be intuitive and user-centric so that users want to use it and experience its value. The Golden Thread of enterprise workflow is fundamental to this platform, running through the centre of our digital blueprint to provide business cohesion.

Digital blueprint for Construction

Our blueprint focuses on all four stages of business. We and strategic partners such as SalesForce and Dassault Systemes believe the blueprint has to be supplier-agnostic, given the existence of different application and Project Lifecycle Management tools – whether Autodesk, Bentley, GIS, bespoke or other – and the need for continuity of process and information across all business lifecycles.

goldenthread

The ‘Golden Thread’  drives the value chain.  Its strands are the stage-gated business lifecycle, knowledge management / innovation, and service management. The business lifecycle is about:

  • Winning the right work at the right price whilst recognising and controlling risk
  • Structuring, managing and delivering projects consistently and safely across the supply chain
  • Learning and applying in-project, and project-to-bid
  • Using rigorous stage-gates throughout the value chain that can identify and deal with risk before the worst happens.

Knowledge management concerns applying lessons learned immediately, as much as longer term recycling. Ideas management and the innovation portfolio are closely interlinked.  Service Management applies rigorous consistent standards to all customer facing tasks, internal and external.

The Golden Thread does not attempt to duplicate what strategic and tactical tools are used for.  Infrastructure and other projects may choose to use Bentley ProjectWise for round-trip transmittal, 4Projects or Business Collaborator for others because projects tend to choose the right tools for the job and are closest to what the client needs or mandates. However, a smooth flow of information across the business underpinning the progression of all tasks from horizon-scanning through to project acceptance and sign-off, cannot work unless there is a single conduit and a consistent view of performance and progression for every bid and every project, with intuitive dashboards and preventative alerts supporting every key role, in any location via any device. SalesForce is an example of the new generation technology driving the Golden Thread, there are others.

Connected tools and services Dassault Systeme’s 3DEXPERIENCE Platform is a good example of an open environment supporting rapid virtualisation and workflow in an engineering design and construction context. The Enovia app can connect to and move data between the leading technologies to provide full 6D BIM integration (3D, Cost, Time, Task).  Other apps can be added for supply chain optimisation, historic or real time IOT data, including mobile. All of the capabilities (shown in orange), are also supported. However, companies must build on what they have and so the blueprint must accommodate other solutions. The OpenBIM consortium of vendors is currently developing a common approach to help address this issue, based on open buildingSMART IFC standards.  Salesforce meanwhile has become the enterprise platform for many global brands, supporting wholesale app migration to the Cloud quickly and cost effectively.

Data discovery It is essential to be able to discover, harvest and re-use what’s best in order to drive up excellence, reduce risk and cost. This search and discover process must be able to consume all types of data, anywhere, automatically cataloguing using industry standard taxonomies and here there are few options.  Whilst other solutions exist, Exalead is the only hybrid environment enterprise search engine specifically aimed at engineering data that can also extract materials and parts metrics. Also used by major enterprises such as the BBC, Exalead uses semantic technologies to crawl, index, extract data and quantify. The end result is the ability to discover the best designs, parts and knowledge globally for engineering data to minimise needless reinvention, and to know how materials and costs can be optimised for any type of structure or project. Data insight should be part of the everyday experience.

Structured and unstructured data Large engineering firms are typically awash with data on legacy network drives, CAD tools, geospatial, emails, alongside Office 365, SharePoint, PLM tools and other repositories. Added to this are sensor signals, SCADA and laser-scanned point clouds. Much of this data will be uncatalogued, often with inconsistent metadata. Big Data Platforms available as a service can be used to churn this information for new operational insights, whilst fast semantic search services such as Exalead can extract data analytics as well as unstructured search results.

Hybrid storage management An agility platform is needed to take away the distraction and cost of managing enterprise systems such as ERP and Finance, which so often take centre stage and consume the bulk of budget. An intelligent, fully automated way of controlling where information is stored and accessed, and how to manage data across the Cloud and On Premises by country, business or project means that focus can be kept on where it is really needed. CSC’s Agility platform is one of the most advanced in this class.

Given the right ‘glue’ for data and knowledge using open integration, return on investment from what exists can be driven upwards. But equally well, new and better tools can be added and contribute value ‘outside in’, rather than the old world of increasing dysfunctionality.  In fact, all of the functions shown in the blueprint can be achieved As a Service, using the right open platform to extend across the enterprise, uniting all the disparate conversations into a new form of collaboration. The areas of operation shown in the blueprint are an opportunity to cut costs, become LEANer and accumulate value.

How to start the transformation journey

All journeys must start with the first step, and for us that is a workshop around drivers, goals, action-lines and success measures, and understanding how the value chain performs, and why. Mapping the maturity of existing information and technology assets against this backdrop together with the critical timeline for the business is central to envisioning a digital future. However, we also advocate early Proof of Value (POV), a prototype that will both test the viability of your organisation’s blueprint and build momentum amongst key stakeholders. The POV exercise must test the most critical underlying architectural building blocks, whilst demonstrating a user experience that will be embraced by the prevailing cultures with the organisation. If your organisation does not yet have a Golden Thread, then that is the place to start.

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