3 REASONS WHY ENGINEERING AND CONSTRUCTION COMPANIES DON’T GET FULL VALUE WHEN DEPLOYING DIGITAL TOOLS
New technologies are transforming all stages of the engineering and construction (E&C) process, although most Engineering and Construction firms have already deployed construction-technology software tools for multiple use cases, many fail to obtain full value from them. Even when a company successfully pilots a new tool, large-scale adoption may be difficult or quickly lose steam. In other cases, technology initiatives fail to produce noticeable improvements in key performance metrics.
The McKinsey Global Institute’s Construction Productivity Survey has compiled a report titled The new age of engineering and construction technology to help E&C companies navigate the landscape and develop more effective deployment strategies, the report suggests the following 3 reasons why these companies fail to get full value when deploying these digital tools.
1. INSUFFICIENT COMMITMENT
Many E&C companies feel pressured to adopt digital solutions, especially if their competitors deploy them, because they want to demonstrate their commitment to innovation. But leaders often struggle to sustain their digital initiatives once they are past the excitement of the launch stage because their attention and resources are pulled in many different directions. That means companies often see lower than expected returns from their digital investments and thus have little incentive to keep funding them, especially if budget pressures increase.
2. DIFFICULTIES WITH COMPANY-WIDE ROLL-OUT
As with any new technology, E&C companies generally evaluate construction tools in pilots, determining their impact and identifying any glitches before investing in large-scale programs. While these pilots typically proceed smoothly, companies often encounter obstacles during large-scale roll-out because leaders ask employees to introduce new tools into work flows without explaining the benefits or providing sufficient training. On-site crews and foremen therefore consider the tools a headquarters-driven imposition that complicates their jobs. Front-line workers may have these misconceptions because E&C software programs have traditionally focused on improving back-office functions, not on-site productivity. In other cases, E&C companies struggle to move from the pilot phase to large scale implementation because they do not invest in training field workers, especially general contractors and subcontractors.
3. LACK OF COMPATIBILITY WITH LEGACY SYSTEMS
New technologies deliver the greatest value when they seamlessly integrate with existing enterprise systems. For example, field-data-collection applications that automatically connect to cost systems can provide real-time visibility into productivity, allowing managers to make immediate adjustments. Although some third-party providers can help E&C firms incorporate new tools into legacy systems, most do not provide complete solutions. In other words, companies must ask different providers to complete various parts of the integration process.
A few Engineering and Construction players have already taken action to address these challenges but these are the exception, many Engineering and Construction players simply introduce new digital tools without educating workers about their benefits or altering organizational structures. The lack of support may explain why technology efforts often score early gains but quickly lose momentum.