India’s construction industry provides 9 percent of the country’s GDP and employs more than 50 million people. But the sector is riddled with time and cost overruns. More importantly, the industry lacks standards and processes for proactive project controls, leading to potential governance issues. The sector has many moving parts critical to project success, making it sensitive to market dynamics and economic trends.
Along with China and the US, India will contribute heavily to the global construction industry’s estimated $15.5 trillion valuation by the end of the decade. Domestically, strong backing from the Central Government is already encouraging policymakers to undertake favorable steps that will drive growth in the construction sector.
However, the sector must first look inwards to rectify its weaknesses. At the top of the list is the inability to complete projects in time and within budget. Several studies, including annual reports by KPMG and position papers from the McKinsey Global Institute, highlight that the construction sector in India must prioritize these issues in order to boost productivity and cater to the industry’s demands.
Reports claim that 90 percent of all projects run late, 40 percent exceed budgets and as much as 10 percent of raw materials are wasted. While efficient collaboration between stakeholders can prevent a lot of the wastage and boost governance, that’s easier said than done. Project contracts are the glue that hold stakeholders together, but the success of construction projects depends on a myriad of external conditions influencing supply chain and worker productivity. These create a lot of uncertainty in planning.
Moreover, construction contracts are not designed for the purpose of proactive sharing of information for better planning and coordination. All of this implies that completion of a project in time and within budget demands an integrated approach that provides visibility into events that tend to derail project progress. Technology enters the picture here and shares insights about how to handle unpredictable events.
How Technology Improves Project Delivery
There is now a growing realization that cutting-edge construction technologies can help project managers improve the pillars of construction project delivery – planning, productivity, collaboration, quality, and safety. Tech-enabled construction, or what is more commonly known as ‘connected construction’, leverages integrated project controls software to strengthen coordination. It provides better decision-making support to project managers and other project stakeholders.
Connected construction creates a bridge between the digital world of parametric modeling, scheduling, BOQ and other forms of information, and the physical world of site supervisors and planning managers. It further connects these entities with key decision makers including regional executives and external stakeholders working on the project. It presents an entirely new method of project delivery by offering end-to-end project monitoring and controls right from pre-construction design to construction planning and coordination, to post-construction handover by operations and maintenance. A McKinsey Global Institute report quantified the benefits of connected construction as a 14-15 percent increase in productivity and a 4-6 percent decrease in costs.
There is now a surge in the number and complexity of construction projects in India thanks to mass urbanization and infrastructure development. While 66 percent of Indian construction companies are prioritizing digital transformation to improve their processes, only a small proportion of forward-looking companies are leveraging connected construction to plug leakages and enhance project governance.
What is needed is a concerted push to use technology for more than enabling communication and digital information capture. What is needed is for owners, operators and construction contractors to create a strategic vision that prioritizes technology solutions which provide a single source of truth. Solutions that give them 360-degree visibility to proactively course correct project plans and ensure projects are executed to a higher degree of reliability will help achieve desired KPIs. The sector must create an ecosystem of connected sites, technology silos, and well thought-out SOPs and processes to achieve operational goals of project delivery.
There are many examples from around the world of mega infrastructure projects using connected construction to ensure project efficiency. For instance, some are facilitating faster decision-making by providing near real-time information sharing between project coordinators and stakeholders. This is positively impacting their project completion milestones and reducing costs of making timely decisions. At the next level of sophistication, others are exploring AR/VR solutions that operate between sites and main offices. While others are improving task-level productivity by conducting data analytics on historical information in sync with real-time information; they are leveraging those insights to improve productivity of machines and reduce material wastage.
Either way, seamless sharing of information between project members through the entire lifecycle is imperative for achieving on-time and on-budget project delivery. Connected construction also has the potential to drive India’s ‘Atma-Nirbhar’ initiatives on the back of better adoption and integration of project scheduling, Enterprise Resource Planning (ERP) and Building Information Modeling (BIM).
The Challenges in the Face of Governance and Collaboration
While there are many tools that construction companies use to enhance project elements, it’s often a problem of having too many options to pick from. Too many standalone apps make it difficult to obtain a centralized single source of truth about project workflow, especially if these apps don’t talk to each other. Managing multi-vendor tools is another consequential challenge that leads to the formation of infamous data silos and repetitive data entry.
This is a challenge that must be overcome in order to achieve better governance and to prevent data overload. Organizations should create a data and technology strategy and standard operating procedures for various processes from design to procurement and construction before evaluating technology solutions. Only solutions that fit into these strategies should be implemented. They should also have the ability to complement and inter-operate with existing solutions while providing capabilities to connect information silos. Without a planned strategy, construction companies leave themselves open to data silos, information latency, and ad-hoc manual processes that make it difficult to obtain ROI from technology investments. All of these issues threaten the purpose of always-on connected construction networks and they lead to stakeholder hesitation in leveraging information and analytics for integrated project controls.
It should be realized that the objective of connected construction is to eliminate data loss and miscommunication, not exacerbate them.
This can be achieved by ensuring that updated workflow changes are visible to all project members. This will reduce on-site errors by displaying the correct information for clients, designers, construction crew and project managers at any time.
The creation of standardized workflows and integrated data ultimately delivers consistency and reliability of project delivery. It boosts collaboration between stakeholders while decreasing overhead costs, risks and loss of data. It results in better decision-making and problem solving. The connected construction network never sleeps, and this is a key reason why 70 percent of Indian construction companies are moving beyond digitization to implementation of connected construction to improve their effectiveness.
The construction industry is entering a new era of transparency, collaboration and control. By leveraging technology to enhance reliability, the industry is making better use of manpower and equipment than ever before. Data-driven decision making is not only improving the daily operations of construction companies that are using them, it is also improving the construction industry’s contribution to national output and its perception in the national consciousness.
