Digital construction: What are the opportunity costs?

If the future is digital, what are the opportunity costs of your digital journey? This is the third part of the Building Academy course on digital construction that focuses on how you can improve your digital competency. Whereas the first session explored the basics of a digital future and the second part considered what is in it for you, this part delves into the timing of when you should embark on your digital journey.

Reflecting on the first two parts of this course we have assumed that the future is digital and highlighted the potential drivers for change. Ultimately, the decision to adopt a digital future will depend on what your organisation determines are the current priorities, so this session considers whether the time should be now or in the future by examining the costs of acting now or later? Opportunity cost is a term from economics and is defined as the value of what you lose when choosing between two or more options. For example, you have chosen to read this article at the expense of spending you time on other things; the assumption is that reading this is more valuable now than participating in other activities. Hence, in this scenario we have assumed that we will start our digital journey at some point in the future, therefore the question is whether the costs of embarking on that journey now are more, or less, than if we start in the future.

Let us consider the costs of starting in the future; this means we are continuing with business-as-usual practices that are characterised by amongst other things, poor quality, inappropriate allocations of risk that cause an adversarial culture and result in lower profitability. This is well understood within the industry and repeated in the litany of government reports on the state of the industry. While there is a plethora of complex reasons why this continues, and I am under no illusion that tackling them is anything other than challenging, I do believe change can be influenced within your own organisation.

Research indicates that the root cause of many issues lies in the management of information. The evidence suggests that poor quality information together with ineffective communication between team members costs the industry significantly. However, much of these costs are often hidden and incurred through working longer hours and rectifying problems after they have happened. This firefighting approach to work is unproductive and stressful. There are those that thrive in this environment and accept this is the way projects get completed and to some extent, this is how we can still produce many projects that do satisfy clients. However, the knock-on effect is the image of the industry and further increase the challenges in retaining and recruiting the resources needed to continue delivering into the future.

If we consider the issue of the costs of starting your digital journey now. I want to address the common perception that BIM costs too much; from my experience, most organisations that have effectively invested in BIM have seen a positive return on that investment. These organisations have invariably increased turnover and profitability more than offsetting the initial costs incurred. More importantly rather than viewing their expenditure as a negative cost, it was treated an investment in the future of the business. All businesses need to invest in their future and if the future is digital, then it is surely logical to invest in digital. Moreover, the approach proposed in this series is to implement changes that realise financial benefits and can fund further expenditure.

So, what can you do? What should you invest in? If you are constantly firefighting and working all hours to just deliver your current projects, I understand that it is difficult to envisage doing things differently. And even more so, when it is unclear to you precisely what this future looks like and what it entails? The first decision is to do something; as Einstein is quoted as saying, “you can’t keep doing the same thing and expect different results”.

It is then the case of considering what is within your control and taking initial small steps to do things differently. The actions at the end of the second article provide a starting point for understanding your current digital capability and tackling the root cause highlighted above, that of poor information management. Starting now and with minimal cost to the organisation you can begin to understand the hidden costs of poor information management. We will explore further in the next article how you can review your information management and gain a better understanding of these hidden costs. In the meantime, this is outlined in the CITB’s publication “Unlocking Construction’s Digital Future”, which also provides a scale for assessing your digital competence. Where are you on the scale?

At the same time, consider what is happening now and what might happen in the future. No doubt, you are aware of terms like 3D simulations ad fly through visualisations or digital twins and AI, but it is unclear how they fit into your organisation. Maybe they do, maybe they don’t, however, the important point to become aware of what technology advances are taking place and be more confident with how they relate to your organisation.

This third article in the Building Academy course has sought to consider when you should start your digital journey. The evidence presented reinforces that well understood notion that the current business-as-usual approach in construction is not working and hence, delaying the decision to adopt digital is more costly than starting now. The fact is that if we want to have greater assurance in delivering a better quality, safer and more sustainable built environment, we must do things differently and you can do things differently. And now is the right time, why wait any longer?

Until next time, keep working hard, be happy and have fun.

Rob Garvey is the programme director for the Building Boardroom Digital Construction Academy and a senior lecturer at University of East London