Planning the Foundation for Tomorrow


The construction industry is moving at a slower pace than other industries as far as digitalization, and the window is closing for companies to transform their operations. Those that proactively undergo a digital transformation initiative now are likely to be better positioned to cater to changing customer expectations and government regulations, and to combat industry competitors. CEOs must boldly use this window of opportunity to frame and drive digitalization across the business if they want to emerge successfully in a highly competitive marketplace.

>Digital Transformation in a Highly Competitive Market

Top Concerns for CEOs in the Construction Industry


The next decade is going to bring many hurdles for construction industry CEOs to overcome. From becoming energy-efficient to finding new logistics solutions, there is nothing that digitalization cannot help to remedy. These are the top 4 concerns that need to be addressed by CEOs in the digital era:

Strains on Bottom Line

Strains on Bottom Line

While technological innovation has led to a rise in productivity and profitability in most industries, the construction industry is an exception. Productivity is largely dictated by human workers, and consequently the bottom line remains strained.

Room for Disruption

Room for Disruption

Construction is a complex industry that is dependent on many constituents in its value chain for the supply and delivery of construction materials, machinery, and human resources. Late adoption of digital technologies has relegated the construction industry into the league of laggards, who are ripe for disruption from operators in other industries.

Environmental Impacts

Environmental Impacts

Sustainability and other environmental issues are now boardroom issues. Environmental protection groups around the world are rallying against issues that affect native flora or fauna, natural resources, and indigenous peoples. Gaining timely approvals from multiple agencies for construction projects is another challenge as lawmakers across the world are demanding more granular information about sustainability and environmental impacts. This ensures that construction firms can meet their compliance obligations before receiving approval to commence construction.

Dwindling Workforce

Dwindling Workforce

While automation has reduced dependency on human labor , there is a severe lack of skilled construction workers in the talent pool. Millennials and subsequent generations are opting for easier and more rewarding careers in other industries over jobs in construction and engineering. Also, unlike other industries, there is significant latency in building a talent pool due to educational and experiential requirements in the construction industry. The 2008 financial crisis prompted large swathes of skilled workers to migrate to other industries, and this gap has not since been filled.

This has resulted in a cascading effect where the construction industry lags significantly behind other industries. In particular, construction firms are failing to adopt new technologies like cloud computing and digitalization to improve their operations and processes.

Unaligned Priorities

Unaligned Priorities

Projects of all types, be it residential, commercial, or public infrastructure are growing in complexity and size. As a result, construction company CEOs are under immense pressure to execute their projects in a timely fashion.

Sadly, the construction industry is notorious for project delays, going over-budget, and sub-par execution on project plans. This can be attributed to the fact that IT and project management teams have poor communication, resulting in unaligned priorities and a lack of visibility into the flow of information across the value chain. This increases operational and business risk, leading to the loss of precious raw material resources and financial resources alike.


Enormous Potential, Little Effort Around Digitalization in Construction


The construction industry has huge potential to benefit from digital transformation, but incumbents are doing very little to transform their operations. When digitalization is applied, incumbents only do so to reduce costs or increase efficiency, with little awareness for the wider benefits digitalization may bring.

Despite high start-up costs and entry requirements for construction projects, new variables are emerging in the ecosystem. Specialized mid-size firms, manufacturers of innovative materials, and future government regulations will converge to change the competitive dynamic in the construction industry.

There is a sense of irony when construction companies receive the greatest financial support from government and financial institutions yet fail to invest sufficiently in digitalization. CEOs must focus on digitalizing to emerge as construction industry leaders—before digital-born disruptors take center-stage.


The Most Successful Digital Transformations Are Powered by Analytics Capabilities


Our benchmarking services are powered by over 1.5 million data points in addition to our primary research and data collection capabilities. With access to leaders across more than 40,000 companies in various size segments, industries, and geographic locations, we can quickly gather additional data to address how your business is performing against the competition.

A graph showing which industries are investing the most in digitalization.

Source: Trasers


Data analyzed in this report comes from 4,000+ responses. For the construction industry, data from 346 companies have been used


Our construction industry experts can offer insights into the following sectors:

  • Civil Engineering

  • Architecture

  • Industrial and Commercial Construction

  • Infrastructure Development

  • Mechanical and Electrical Construction Services

  • Construction Equipment Suppliers

  • Technical Construction Equipment Manufacturer

  • And More

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Environmental Safety and Material Standards in Construction


Leading construction companies are well-versed in government, non-governmental organizations (NGOs), and customer expectations for eco-friendly and energy-efficient construction practices. The key, however, is finding an economical solution for materials, processes, and post-construction sustainability that reduce the environmental footprint. To implement new material, process, and post-construction standards, construction firms must make a greater push to leverage analytics.

Global sourcing and partnerships can help firms implement these ideas. Furthermore, augmented or virtual reality (AR or VR) and 3D visualization of structures, drone-based surveys, connected devices providing continuous data streams, and wear-and-tear information can help project teams make better and more proactive decisions.

This would help to drive engagement from construction firms with customers. Similarly, digitalizing construction management processes like materials and capacity planning-to-scheduling, just-in-time (JIT) delivery, and building information modelling (BIM) for shared views of progress will drive up capacity utilization, efficiency, predictability, and reduce the overall cost of delivering projects for construction firms.


Only 7% of Companies Are Delivering on Their Transformational Initiatives


Our research has shown that 30% of companies will fail to survive this decade due to an inability to evolve digitally. To address this negative trend, we have developed the Digital Enterprise Evolution Model™ (DEEM).

Digital Enterprise Evolution Model™

An image showing the stages of analytics capability evolution.

Copyright © 2021 Trianz

DEEM allows our clients to recognize digital evolution patterns, implement benchmarking and prioritization strategies, and initiate application management protocols to satisfy stakeholder and market requirements.


Modernizing IT Function to Support Research and Development in Construction


A centralized research and development (R&D) department can help companies develop new technologies or techniques, as well as roll these innovations out across business units globally. As a first step, the IT function in the construction industry needs to be modernized to address new paradigms around IT service management (ITSM) and IT operations management (ITOM). While most construction companies understand the importance of cloud investments , only a small proportion are committing through investments in analytics and process digitalization. There is a huge opportunity for improvement across the entire construction industry. For the construction industry to thrive, digitalization must be integrated as strategic point of view for the digital era.


Human Capital Management (HCM) in the Construction Industry


Our research has shown the construction industry is not investing enough in human capital management (HCM). The value of experience is falling to the wayside in a complex industry that is in dire need of technical skills and experience. With decentralization across business units, regions, construction projects, and the workforce it is difficult to develop a unified work culture.

This is a challenge construction firms must overcome using digital transformation, training, and globally consistent employee experiences (EX). To emerge into the vision-driven quadrant, CEOs must benchmark their companies, focusing on transforming product-service portfolios, prioritizing the value chain, and either acquiring new talent or upskilling existing talent via direct involvement.

Experience the Trianz Difference

Trianz enables digital transformations through effective strategies and excellence in execution. Collaborating with business and technology leaders, we help formulate and execute operational strategies to achieve intended business outcomes by bringing the best of consulting, technology experiences and execution models.

Powered by knowledge, research, and perspectives, we enable clients to transform their business ecosystems and achieve superior performance by leveraging infrastructure, cloud, analytics, digital and security paradigms. Reach out to get in touch or learn more.

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State of Digital Transformation
Worldwide 2020 Report

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KC Sreeram

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Cloud & Infrastructure Practices

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Digital & Analytics Practice

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