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Canadian construction companies rate digital maturity as ‘under-developed’ in new survey

Angela Gismondi
Canadian construction companies rate digital maturity as ‘under-developed’ in new survey

When asked in a survey to evaluate their digital transformation efforts, 64 per cent of construction industry respondents said they are not currently exploring new business models and a majority of respondents rated their digital maturity as “under-developed.”

“What this tells us is that the industry players recognize a disconnect between strategy and implementation signalling an opportunity for change,” said Larry Toste, a partner at KPMG, in his presentation on the preliminary findings of the digital maturity assessment tool during CCA’s Virtually Unstoppable conference.

“Investing in technology and integrating systems in the near term, it will become table stakes,” said Jordan Thomson, a senior manager with KPMG LLP.

“We know from our data that the industry wants to innovate but there is a gap, so when it comes down to finding the best way to select and implement new technologies that becomes the big question.”

The assessment tool, a joint initiative between CCA and KPMG Canada, was developed to help companies gauge their level of construction innovation. The findings, which resulted in an innovation benchmarking report, were presented at a session billed Digital readiness: How does your firm compare?  

“This tool allowed the participants to benchmark their digital maturity against their peers and gave us an opportunity to analyze their responses thereby gaining an understanding of innovation in the sector, what the landscape looks like today and what players can do to bolster their maturity in this new reality,” explained Toste. “There is an impetus to explore new exponential technologies that can help you stay relevant in the years to come. Beyond just keeping pace lies a far more lucrative state of being a digitally mature organization, one that uses technology as a means to truly take advantage of the digital age.”

 

Advancing the industry’s innovation agenda

Before looking at implementation and which technologies to choose, companies need to examine who is driving the tech strategy. Fifty-five per cent of respondents indicated top management assigns high significance to digital transformation.

“Only nine per cent of construction firms reported that their investment decisions are overseen by a CIO (chief information officer) or CTO (chief technology officer),” said Toste. “Companies that have fully immersed their CTO in their technology strategy made better tech solution decisions both short term and for the longer term.

“Without having the right people at the table with technology and the experience behind technology you may not get to the right answer.”

The selection of a company’s tech stack will depend on key objectives and should start by evaluating and ranking priorities. According to the survey, improving efficiencies of back office support was seen as the top priority while improving customer experience ranked lowest out of the options provided.

“When we did this survey it was around when the pandemic started so the focus may have been at the time to improve efficiencies in the back office. We have seen, based on some of our clients, more focus on customer experience in the latter half of the year,” said Toste.

Many of the solutions available don’t necessarily involve major investment or a lot of upfront costs and still drive significant results, said Thomson. These technologies pay for themselves and they make good business sense.

“Leaders in the space can be more aggressive in pricing, have better profit margins and hopefully win more work,” he said. “Owners are also increasingly looking at how contractors can differentiate themselves getting more innovative and value add offerings.

“As the supply chain becomes increasingly integrated and even more so automated if you don’t have these tools in place there is a real threat you will get left behind and left out of the supply chain entirely.”

 

Collecting and using data increasingly important

The survey looked at what digital solutions firms are implementing today and in the next few years. Big data and data analytics is one of the most important things going forward. Tech solutions operate best when paired with a strong data strategy, said Thomson.

“Construction sites and projects are very good at creating data, they are very poor at using it,” he said. “Data analytics can help drive efficiency across the project lifecycle and help us identify trends and cost drivers and quickly act to address issues before they become problems.

“We have to have a tailored and strategic approach to gathering data.”

Digital solutions can help the entire project team share information more easily and collaborate on decision-making to avoid problems which leads to a connected site.

“The idea here is that systems and technologies and project team members will all be able to communicate freely to provide information to one another in order to give you an integrated view of the project and how its proceeding,” said Thomson.

To drive change and get adoption, the key is developing a culture of innovation. Thirty-nine per cent of respondents indicate they will have to hire new talent.

“The current workforce is not necessarily equipped to do these technologically challenging things,” he noted. “Driving meaningful transformation here will mean not only upskilling but also bringing in new types of people.”

The full report will be released this month.

 

Follow the author on Twitter @DCN_Angela.

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