Digitisation is coming fast, and the industry is on the verge of widespread adoption of a range of new technologies. Startups including PlantMiner are looking to provide digital solutions and technological additions that help improve existing businesses and overcome some of the most enduring challenges of this complex sector.
The Digital Foundations Report has just been released and we’ve recapped some of the best insights into digitisation for you and your business. The report was produced by StartupAUS in collaboration with Aconex, Lendlease, EY and the Victorian Government and outlines the current state of play of Australian ConstructionTech, including the impact of digital solutions and effective technology adoption.
BCG predicts that within 10 years, global full-scale digitisation in nonresidential construction could lead to annual cost savings of US $0.7-1.2 trillion (13% to 21%) in the engineering and construction phases and US$0.3-0.5 trillion (10% to 17%) in the operations phase.
The potential added value increase could be $25 billion year on year within the next decade in the Australian construction sector. Startups, therefore, have the potential to add huge value to the local construction sector as well as enjoying healthy global demand for exported technology solutions.
Management and the workforce are both keen to move away from paper-based administration towards integrated digital solutions. Through the removal of paper a wide range of business-wide benefits are provided, including providing managers with better, more timely data, improving safety workers on site and increasing build speed. PlantMiner provides searchers with timely supplier data, increasing business benefits and speed.
According to Lendlease, technology is an edge in a competitive market. Australia has seen strong growth in this space, with firms like SafetyCulture and Assignar attracting venture capital from leading Australian-based venture funds including Blackbird and Our Innovation Fund, alongside Silicon Valley titans Index Ventures. According to ConstructionTech, startups have attracted at least $98 million in investment since the start of 2016.
The Australian construction sector is heavily concentrated as only 20 firms account for 68% of contracts won. This means proactive steps being taken to digitalise by sector leaders already have and will be having industry wide repercussions.
Due to anecdotal evidence, it is suggested that Australia’s construction sector has been a leading adopter of technology for some time, most notably in cloud software, use of mobile product for field processes and the adoption of BIM.
Australia is seen as an attractive environment for construction companies due to stable political, social and economic foundations. Australian construction firms adopt new technologies as they create a path to boosting domestic competitiveness and generating international opportunities.
According to Joshua Ridley, founder and CEO of Ridley, technology that creates a reduction in costs and minimises risks can be a powerful guarantee for clients as the industry is plagued with cost and deadline blowouts.
“We’re very good at adopting technology because we have to be competitive. Australia could be one of the leaders here if we get our act together and look to be an export economy to the world.” said Joshua Ridley.
While there are many positives associated with digital adoption such as the promise of greater monetary and time efficiency, construction companies globally are resistant to shell out initial investment for these technologies due to data security concerns, investment in people, adaption of processes, fear of failure and the expected negative impact to bottom line.
Australian construction companies appear to have broadly accepted that digital evolution is inevitable as many are moving to embrace this change because companies not investing in digital solutions now risk being left behind by the industry in the next 5-10 years.
“[Construction companies are] starting to recognise that in the old days the way you would solve your growth challenges or your business problems is you would throw more resources into your backend or delivery team. “I’ll go and hire some more admins, I’ll go and hire some more operations people”. You can’t afford to do that now because margins are diminishing and regulation is increasing.” Sean McCreanor, Assignar
Despite growing acceptance towards digitisation, the construction sector still faces significant challenges in adopting new technology as you can not just buy resources in today's sector, you have to get smarter about it.
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Source: ConstructionTech.