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Accelerating technology adoption in the construction industry

Accelerating technology adoption in the construction industry

Dr Gretchen Gagel looks into the state of technology adoption in the Australian commercial construction industry.

By Dr Gretchen Gagel.

Last month, while in the US for a Brinkman Construction Board meeting, I had the opportunity to introduce an Australian construction technology firm, Earlytrade, to several leaders in the US construction industry. Each industry leader was quite impressed with the Earlytrade model of automating early settlement discounts to facilitate the flow of working capital in the industry. But it was one statement that nearly every person made that made me cringe – “You know, we’re not really an ‘early adoption’ industry when it comes to technology”.

They are right. The 2022 Construction User Roundtable study I conducted involving 44 global construction leaders verified this idea. Leaders such as the global head of construction for Microsoft, Black & Veatch, and Chevron rated technology adoption a 2.34 on a scale of 4.00 and made statements such as: “Clients are asking for rigorous digital delivery ahead of its time. It’s making people crazy; costing dollars and we don’t get the benefit of the beginning of technology adoption” and “Tech solutions are not end-to-end, they’re siloed”.

These are but a few of the statements made that reflect the challenges we face in adopting technology in the construction industry.

The “why”

So why are we “laggards” on the adoption curve? Here are some of my thoughts:

  • Project schedule pressures – Schedule pressures on projects and programs leave little time for technology innovation. When we are all pushed to the limit and struggling to make project deadlines, is there really an incentive to try something new that in the beginning will slow us down? Probably not.
  • Fear of failure – We all have it, that amygdala in our brain that tells us “I’ll never learn that technology” or “the young people will outpace me because they are better at technology”. It’s not just at the individual level. Organisations fear trying something that may not work.
  • Lack of research and development (R&D) funding – According to McKinsey & Company, the construction industry spends less than 1 per cent on R&D, much lower than industries such as automotive that spend 3 per cent on R&D. Why? I believe it is because there is a lot riding on each project, and the risk of failure outweighs the incentive to try new things.
  • Giving busy people more to do – Years ago we conducted a study for the Gas Technology Institute in the US on technology adoption in gas utilities. One key finding was we often ask busy people to lead technology adoption efforts without taking anything off their plate. When we under-resource technology change, we really never know if the technology was the problem, or the lack of resources in adopting it.
  • Technology selection challenges – Many, many years ago, when video first started (yes, I am that old) there was the VHS versus Beta debate. VHS won. We have similar problems in the construction industry, with different clients and contractors backing different technology solutions. It’s overwhelming to keep up with them all.

The solutions

I think there are a few things we can do, as an industry, as organisations and as individuals, to accelerate the adoption of technology in the construction industry. A few ideas:

  • Recognise we are laggards – The first step to solving a problem is to realise we have one. Decades ago, we realised there was a serious site safety problem across the industry, and we did something about it.
  • Invest in R&D – Companies can deliberately set higher budgets for R&D, including technology. Budgets and the allocation of resources create priorities within organisations and teams.
  • Reward people – Building technology adoption into people’s key performance indicators will create focus – we do what we are incentivised to do.
  • Talk about it – People listen to what our leaders talk about. We spend a lot of time talking about safety. How could you replicate that for technology adoption and other important topics?
  • Don’t just talk about it – If your IT department, or chief technology officer, is the only person/team driving the adoption of technology, it’s not going to work. It is much like the 80’s when total quality management (TQM) became the fad of the decade. One approach with little success was to create quality departments; the other – making quality and TQM part of everyone’s job – was quite successful. Technology adoption must be seen as important to everyone in the organisation, not just the ‘techies’.

This is a solvable problem, and I’m certain each of you have more ideas about how to accelerate technology adoption in our industry. If this is a priority, what’s the next big step? How can you be a champion of technology adoption in your team and organisation? The results can pay big dividends.

Dr Gretchen Gagel is Chair of Brinkman Construction (US), a member of the National Academy of Construction (US), a member of the Construction Industry Culture Taskforce (AUS), and an affiliate professor at the Australian National University and the University of Denver. As President/Managing Director of Greatness Consulting she continues to advise organisations within the construction industry on optimising capital program delivery and developing talent. You can hear more from Gretchen on her Spotify podcast, “Greatness”.

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