With collaborative platforms, mobile, BIM, ‘Big data’, the ‘internet of things’, we are tinkering with enablers of change. “Digital Built Britain” envisages entirely new business models for the industry currently known as construction.
21 years (and more) of industry reports
It’s almost 21 years since the Latham Report was published in 1994 (then the latest in a sequence of industry reports stretching back to World War 2: Simon, Emmerson, Banwell …), and its ripples continue to be felt, not least because it stimulated some UK industry changes to procurement (we started to talk about strategic partnering and frameworks) and to contracts (Sir Michael favoured the NEC, for example). At the time, sophisticated use of information and communications technology was still in the future, but the IT opportunities were eventually picked up by Sir John Egan in Rethinking Construction (1998) and Accelerating Change (2002), reiterated in the Construction Commitments (2006) and then – after the 2008 Construction Matters report recommended the appointment – championed by the first chief construction advisor, Paul Morrell from late 2009 onwards (post).
By this stage, the global financial crisis was scything through weak companies, projects were being moth-balled or cancelled altogether, and the industry was desperate to find positive routes forward. For Constructing Excellence, Andrew Wolstenholme’s Never Waste a Good Crisis (2009) had reiterated the core Latham and Egan themes about collaborative working – and Paul Morrell responded to the challenge. Low Carbon Construction (2010) set the foundations, but the publication of the 2011 Government Construction Strategy instigated a more wide-ranging set of measures.
To many in the technology sector, this has all been about BIM, but – as University of Westminster lecturer Rob Garvey pointed out to the London Constructing Excellence Club last week (read Storify) – it also created the conditions to test new models of construction procurement such as two-stage open book, cost-led procurement, and integrated project insurance (first contract just initiated). Much of the endeavour, however, remained silo’d, Rob said; to deliver the latest industry strategy (Construction 2025, published in 2013), we need to break down these silos, build on the progress made and ensure they extend beyond just the progressive fringe.
I talk regularly to conference audiences about where the construction IT industry is going (among other subjects). Updating an argument in my book (published in 2005 remember), I identify the Latham/Egan/Constructing Excellence agenda as an influential industry culture trend (particularly when times are tough – but companies can, and do, ‘revert to type’ when economic conditions improve) and then suggest that the web, broadband and Software-as-a-Service (SaaS) have all helped change perceptions about technology and information management (parts of the industry have moved from being paper-centric to being more online document-centric).
Since the mid-2000s, new technological trends have begun to emerge. Information mobility has been a factor since the advent of smartphones (c. 2007) and tablets (c. 2010). BIM has, of course, been a dominant theme for at least the past five years; social media has – maybe somewhat grudgingly – begun to challenge existing models of communication; and we have also become more aware of the power of data – ‘Big data‘, interoperability, linked open data, and outputs from the ‘Internet of Things‘ (in short, some of us are now moving from being document-centric to being data-centric).
However, these technological changes are not, on their own, going to overhaul the construction industry. They are, at best, enablers. We also have to tackle existing silo’d structures, attitudes, cultures and resulting behaviours within the industry. However, the future direction and shape of the industry currently known as construction is more likely to be influenced by political, economic, social, legal and environmental factors. Globalisation, carbon, population growth and resource shortages will have an increasingly important and direct bearing on what industry clients identify as desirable business outcomes, making them more alert to whole-life performance and to wider business, social, economic and sustainability outcomes.
New business models
Digital Built Britain, published in February 2015, is therefore a key document. Despite its dry and apparently technology focused subtitle – “Level 3 Building Information Modelling: a Strategic Plan” (yawn!) – it synthesises four separate industry strategies – Construction 2025, Information Economy, Smart Cities, Business & Professional Services; it tells a wider audience than construction that it needs to build and exploit a “new digital economy”. We need:
- New ways of doing things
- New business models
- New business relationships
- New institutions
- New performance metrics
This fits with Constructing Excellence’s vision (its response to Construction 2025, and its various 50% improvement targets), which says delivering ‘best practice’ is not enough. The successful businesses of tomorrow will break through the current industry ceiling, making radical changes and building collaborative business relationships so they can deliver exceptional performance:
- “success will depend on delivering and exceeding client’s desired outcomes”
- Exceptional performance will mean collaborative working and BIM to enable lean processes
- All organisations will be measuring, reporting and sharing data about performance
- Better procurement will provide for appropriate profit and encourage innovation
- Aligned commercial incentives will give the supply side ‘skin in the game’ to support best whole life outcomes
- Reward for value will be the way of getting paid.
Yes, BIM and data are part of this picture but only as enablers. Over time, they will become normal – as much part of the way of doing things as CAD, word-processing and email today. Supply chain organisations in the industry currently known as construction will, I hope, be rationalised and more integrated. They will be suppliers of leaner, safer, lower-carbon and data-supported “asset services” (delivering ‘illumination’, not light fittings, for example – “Buildings-as-a-Service, BaaS … maybe even AaaS!), rewarded across the life-cycle for the value delivered by the built assets they create, and having the reputations and market valuations more commonly found among sophisticated manufacturers. This is not achieved by focusing on technology, it is achieved by radically overhauling existing structures, processes and cultures, driving out waste, creating the collaborative conditions to nurture innovations, and having supply chains focus on what delivers best value.
Sir Michael Latham was fond of repeating a saying attributed to Albert Einstein that “if you always do what you always did, you’ll always get what you always got“. We have been tinkering with small ways to improve how our industry works – it’s now time to start making more radical changes.
(This post is based loosely on a keynote presentation I gave to Viewpoint Construction Software‘s user conference in London today. Disclosures: I am on the steering group of Constructing Excellence, and a CE collaborative working champion.)