The cloud can power growth, profits for engineering and construction firms. Here’s why and how

Feb 14, 2023

David Anderson
Director, Engineering & Construction, PwC US
Karim Bibawi
Principal, Cloud & Digital, Engineering & Construction, PwC US

Engineering and construction (E&C) firms are facing financial and economic pressures on numerous fronts. Yet, some are finding ways to harness cloud technology to help drive growth, improve profitability, deliver projects on time and on-budget, and lead on net-zero and ESG (environmental, social and governance) initiatives.

According to PwC’s 2023 Cloud Business Survey, 28% of E&C companies are “all in” on cloud adoption and using it throughout their business, while 11% are not using it at all. The “all in” companies are leveraging the cloud on numerous paths, including developing new cloud-native applications and business models, modernization and rewriting applications to take advantage of cloud technology, and migrating data and workloads to the cloud. About half (47%) report that they have already achieved “measurable” value in cost savings and improved resiliency to their organization, according to the same survey.

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Four ways cloud migration can help E&C firms now

E&C firms are increasingly expected to deliver projects with greater efficiency, transparency and security. At the same time, the industry continues to operate with narrow project and business margins. Cloud solutions can help on both fronts. Here are four areas we believe moving legacy systems to the cloud can deliver improvements for E&C firms now and beyond.

1. Constructing a solid foundation to drive strategies and improve profitability.

Establishing a solid foundation means putting in place a single, integrated technology platform from which the business can operate. Typically, this has been a legacy enterprise resource planning (ERP) solution used for financial and job cost management and hosted on-premise within a corporate data center and requiring a team of IT staff to manage and maintain the system.

But things are changing. Today’s ERP systems embrace a widening portfolio of functional groups, including:

  • human capital management life cycle
  • supply chain management
  • risk management
  • fixed and mobile asset management
  • financial planning and consolidation
  • real-time business intelligence, data-monitoring and analytics

Expanding the foundational portfolio to a cloud platform provides benefits for operating organizations across the enterprise including reducing the time-consuming daily IT management and maintenance (such as patching and upgrade activities), creating the opportunity for true process improvement, and offering the integration and information backbone to better manage and run the business. Shifting to a cloud platform also takes advantage of the latest technology performance and security enhancements.

2. Fostering collaboration.

With a solid cloud ERP foundation in place, opportunities open up to expand the portfolio and take advantage of industry-leading technology products with improved functionality and user interfaces (UIs). Such tools span the range of E&C firm requirements including:

  • project price and cost estimating
  • computer-aided design
  • project controls
  • document management
  • ESG
  • virtual design and construction
  • artificial intelligence and machine learning
  • Internet of Things (drones, sensors, augmented and virtual reality, and geo-fencing)

Many of these products and solutions have been designed to leverage cloud platforms for anytime/anywhere use. In most cases, the UIs have been designed for ease of use, improving adoption in the field or office by all project participants (e.g., asset owners, general contractors, engineers, suppliers and subcontractors). They are also compatible with smartphones, tablets and web tech platforms. Such connectivity fosters greater collaboration not only within the firm, but also with clients and suppliers.

3. Building one home for information – for all stakeholders.

Cloud migration for E&C firms means creating a data repository that can be made available to all stakeholders – a common platform where all project-related data resides and is readily accessed and secure. In fact, according to our survey, 41% of E&C firms have implemented cross-functional stakeholder agreements on their cloud strategy that inform their cloud governance.

Such a “one-home” approach for all stakeholders can vastly improve day-to-day business by unifying siloed units and functions (e.g., project performance reviews, business analytics, budget-to-actual measurements, supplier and subcontractor assessments, change-order management, legal requirements, operating and maintenance activities, etc.).

Be aware however, that there is no “silver bullet” when it comes to systems integration when migrating to the cloud. Most software providers would likely acknowledge this and support the integration of their information with that of the overarching legacy ERP system. By utilizing cloud ERP foundational layers (e.g., database, middleware and interconnects), system integrations can be streamlined and managed in a low- or no-code IT environment. This makes supporting the use of connected, industry leading solutions viable and helps improve timely information flow enabling employees at all levels to make faster and better decisions based on enhanced visibility across all aspects of the project life cycle.

4. Strengthening privacy, bolstering security.

Most industries are aware of the requirements for information privacy and security, including personally identifiable information, General Data Protection Regulation and government controls (for firms operating in the public sector). For E&C firms, data privacy and security take on a special urgency since most firms can hold sensitive data related to critical infrastructure (water, energy, telecommunications and transportation systems), which also means a potentially wider attack surface.

Migrating data to the cloud is often construed as high-risk. However, cloud technology advancements increasingly help mitigate risk exposure.

For some, it’s paying off. According to our survey, roughly half (48%) of E&C respondents have already achieved measurable value in stakeholder trust (e.g., through enhanced cybersecurity and privacy measures or shared customer responsibility). Secure infrastructure platforms offered by leading cloud providers can include data redundancy and multi-tenant capabilities to segregate and secure information, along with thorough disaster recovery solutions. Financial and project data, documents and correspondence and drawings, for instance, can be secured at multiple levels with improved backup, recovery, archive and restore capabilities. In addition, cloud vendors can provide what most E&C firms lack – the significant cybersecurity resources to provide the security operations center, a rapid response team and 24/7 global “eyes on glass” capabilities.

Having these resources at work can also provide constituents in a project-based environment with an increased understanding and level of confidence that both regulatory and private/public cybersecurity controls are in place.

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