In this Q&A, Kenny Ingram, construction and contracting industry expert and Global Industry Director at IFS, answers questions on whether or not construction companies will be able to keep up with demand, along with valuable suggestions for doing so.
Kenny has been with IFS for more than 16 years and has worked in the business systems marketplace for over 20 years. He is now regarded as one of the top specialists in project-based business systems and has been heavily involved in driving the IFS strategy in this area for the last 16 years. Prior to this, Kenny held various positions covering management and project accounting, supply chain and logistics.
Question 1
The construction industry is at a turning point and companies are struggling to keep pace with demand. Why is this?
Answer: The industry is facing a number of major disruptive trends which have the potential to transform the industry faster than it has ever experienced.
These trends include:
- The acute labor shortage
- Pressure on project margins
- Digital transformation (e.g. BIM, drones, IoT, laser scanning, virtual reality (VR) , augmented reality (AR), robotics, etc.)
- Global competition intensifying
- Competition from new industry entrants who will do things differently
- Construction and manufacturing merging (construction-integrated manufacturing (CIM))
- Servitization – asset owners want a total asset lifecycle delivery partner and there is a move to contracting for outcomes
The first step is to recognize that change is not optional if you are to be a winner in the future. The industry is generally conservative and risk-averse and has been working in a traditional way with low adoption of technology for a long time. It is, therefore, not surprising that many companies in the industry have not yet realized the need to change and many that recognize the need to change are still moving slowly when it comes to adopting modern technology and changing business processes.
Question 2
How can construction and contracting companies overcome the skills shortage?
Answer: The industry is facing a major skills shortage at all levels of the organization, both professional staff and direct trades that work on the construction sites.
There is, of course, no simple answer to this but there are a number of initiatives that may help to reduce this impact:
- Using apprenticeships and other training schemes to educate employees
- Drive improved labor efficiency by implementing best practice process and using modern digital technology and integrated business systems.
- Make your organization attractive to work for by transitioning to a modern open culture
- Attract graduates by embracing new digital technology
- Implement a modular or offsite manufacturing strategy
Question 3
Many construction and contracting companies still use traditional systems. Is there a way to combine traditional systems with new technology?
Answer: Most companies in the construction and engineering industry have a complex business system landscape often comprising over 100 different business systems. These systems are typically point departmental systems which may be referred to as best-of-breed. The problem is that they are different technologies with different user interfaces.
The theory is that these different systems will be integrated to form a business-wide solution. Usually, the reality is that the integrations become more complex and expensive to implement than first thought so few of the interfaces and integrations are implemented leaving the organization with a set of business applications that do not talk to each other. What then happens is thousands of MS Excel spreadsheets pop up everywhere in the business and they become the joining connection between the business systems, which becomes the trusted set of management information. The result is a lack of timely, trusted, accurate management information and huge inefficiency.
Therefore, the goal should be to replace many of these systems with an integrated business system. This can be done in phases to minimize the disruption and risk. In addition, the solution chosen should be able to support traditional ways of working and then transition to more modern digital methods such as building information modeling (BIM) in a controlled way over time.
Question 4
What unique advantages would a construction or contracting company gain as an IFS customer?
Answer: IFS is a specialist in integrated project and asset lifecycle management (ALM) solutions.
The main advantages that IFS customers gain are:
- They can replace the majority of their existing non-integrated business systems with a truly modern integrated solution. This gives the following advantages:
- Major reduction in IT costs (licensing, support, integrations, hardware, development, etc.)
- Can easily transition to a cloud solution at any time
- Improved management information and governance
- Information is now available in real time. It is accurate and trusted, which is a solid foundation for proper governance
- Allows a business to implement best practice and consistent business processes across all companies and business units
- IFS continues to invest to keep pace with the latest technology and industry business practices, which allows our customers to keep pace with change and adapt their business strategy to stay ahead of their competition
- Easy to form a new business or JV without having to buy or implement new business systems
- IFS is designed to improve our customer’s ability to deliver their projects on time, on budget and to a high quality with low risk
- IFS enables customers to transition to the new digital world (e.g. BIM, 4D scheduling, drones, IoT, laser scanning, VR, AR, robotics, 3D printing, etc.)
- Construction-integrated manufacturing is a rapidly growing trend, so with IFS, the solution is already a market leader, therefore, if our customers need to transition to this new way of working, then it is simply a question of adding a few IFS modules
- Servitization in the industry is a rapidly growing trend. Many construction companies already use the IFS world-class facilities, enterprise service management (ESM) and enterprise asset management (EAM) solutions, so there is no need to buy one solution for construction and another for your FM business or perhaps even another for your offsite manufacturing or hire and rental business. Contracting for outcomes is the next stage of this transition so, with IFS, you are ready for what’s next.
Question 5
There are several IFS customers that have used IFS solutions and expertise to overcome today’s industry challenges. Do you have one that you can share?
Answer: Multiplex is a global construction company that has implemented IFS Applications across its global business. The international construction contractor headquartered in Sydney, Australia, needed to address its top challenge of obtaining global consistency across all regions in which it operates, while still respecting regional nuances.
Since implementing IFS Applications, Multiplex has increased its operational agility, it has faster and more accurate reporting and it has streamlined its processes.
Want more industry expert advice?
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Rusbe
Hi , great post on the ever-changing future of construction companies…. Companies need to adopt BIM as a mandatory alternative for Building construction. Finding new talent needs to be done, and they also need to be trained on new tools and software’s for construction.