Construction’s digital past and future: Where do we go from here?
Digital is expected to be critical for the future post-COVID-19 in the engineering and construction workplace
Seismic changes are afoot as global industries, including engineering and construction (E&C), scramble for innovative technology that enables continued productivity through difficult economic times. Leading E&C companies have been looking for digital solutions to help improve project delivery, modularize construction and enable remote operations while reducing risks and enhancing safety. These solutions are needed now more than ever as COVID-19 is likely to fundamentally change the nature of the E&C workforce and workplace.
To understand the success—and shortcomings—of digital in the E&C industry thus far, PwC teamed up with Oxford Economics to study the impact of digital investments on E&C workforce productivity from January 2010 through May 2019.
What we found:
Digital has not fulfilled its promise in most E&C segments (except for construction manufacturing)
Digital has been compensating for a lack of skilled labor—and not doing it well
Digital has been a crutch, not an accelerator of process efficiency
These observations revealed not only what critical misalignments of early digital and business strategies led to lackluster results, but also how E&C companies can retool to focus more on select priority functions going forward.
Even before the COVID-19 disruption, 77% of E&C CEOs were already planning for more 4IR operational efficiencies to drive growth.
Now is the time to digitize and upskill these three priority E&C functions
Back office and management
Despite the availability of updated ERP systems and other digital tools, we saw hiring in back office and management increase between the periods 2010-2015 and 2016-2019, doubling total job postings from 8% to 19%. This is where we see enormous opportunity for digital tools to help, by:
Centralizing and streamlining workflow: Using bots, workflow and integration tools can help reduce some of the “swivel chair” work so workers can focus on high-value functions
Aligning back-office functions with front-office needs: Back-office integration with accounting and finance enables front-line decision makers to access real-time data on costs and schedules and make quick adjustments.
For public companies, integration with the finance function also enables quicker and more accurate financial reporting, which is particularly important for investor relations, given the impact of COVID-19.
Construction and extraction
While construction and resource extraction (ie. mining, oil and gas) work has traditionally involved more manual labor, we are now seeing a fast-growing interest for digital skills in this segment as well. Between the periods 2010-2015 and 2016-2019, total job postings grew from 22% to 28%, while digital skills postings doubled from 3% to 6%.
This upward trend is likely to accelerate as companies consider new workforce dynamics that help meet the challenges of COVID-19 by:
Deploying work through digitized and telnetworked platforms to improve productivity.
Modularizing facilities and components to reduce site-based labor costs and risk.
Upskilling workers to learn basic data science techniques.
IT and software
While the E&C industry has been slow to invest in IT and software in the past, they are catching up fast. Between 2010-2015 and 2016-2019, average total job postings in the IT and software category grew by 23%.
We expect this trend to continue as 4IR technology landscape changes and opportunities emerge to:
Fend off the competition: E&C companies are partnering or investing in software start-ups to help develop differentiating digital capabilities fit for a new digital environment and to mitigate potential Big Tech takeovers.
Incentivize “in-house” innovation: Forward-looking E&C companies assign high-level executives and digital leaders to promote “in-house” innovation. This helps build business cases and enhance internal workforce upskilling, and helps drive customer intimacy and develop incremental revenue streams.
Six steps to successful digital transformation in the future workplace
We’ve identified six action steps that help E&C companies make the technological and cultural transition needed to become a digital organization fit for the future work environment.
Refresh business processes, not just technology
Digitization is an opportunity to rethink the way you do business. Be prepared that you may have to completely redesign the process before putting in bots, automation and other tools.
Expand use cases to promote cross-functional collaboration and cross-stream value.
As you continue with digitization, pay attention to digital activities that promote cross-functional collaboration. You just might unlock value that was sitting, unrealized, in a siloed environment.
Shift the corporate culture to a digital mindset
You can help amplify the shift to a digital mindset by encouraging employees to think about their jobs and career paths in new ways and by rewarding learning and behaviors that enable digital upskilling.
Make digital skills learning accessible—and fun
It is important to design engaging learning experiences so that the information “sticks,” such as Digital Fitness apps that help turn digital learning into a game.
Incentivize employees to innovate
In digital upskilling campaigns, employee-led innovation can be a powerful force. Use incentives and awards to help them see how these skills empower them in their personal and professional lives.
Engage and guide workers through times of change
Digital transformation is as much about people as it is about technology. Having a platform that tracks workers’ feedback and sentiment helps make them feel invested in improving the digital initiative.
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