Technology has so far played catch-up in the construction sector, compared to other industries. According to McKinsey &Company, construction remains as one of the least digitized sectors in the world. However, since 2018 construction companies have recognized the importance of technology and its vital role in day-to-day operations. Construction technology witnessed a record $5.38 billion in investments across 228 deals last year. While investments continue to ramp up in construction technology-based startups, there still remains a disconnect between overpour of technology and what’s used in the field and offices.
In the world of construction management, platforms and solutions are striving to prove their mettle as an indispensable tool, streamlining processes and improving overall project efficiency. AI tools have driven it up a notch by providing valuable insights from analyzing vast amounts of data to make informed decisions. According to a report by Research Dive, artificial intelligence in the construction market is expected to generate revenue of $2.6 billion by 2026. These tools help construction managers to efficiently use resources, delegate and manage tasks to field crews and adjust costs with subcontractors and suppliers.
While the construction industry employees make up around 7% of the world’s working population, the sector also faces multifaceted challenges from unexpected delays due to legacy systems and dated processes. Complex construction projects involve multiple stakeholders. According to a survey by KPMG, closer to 70% of construction projects experience delays which in turn results in 60% of them missing deadlines. These mounting delays lead to added costs incurred in projects.
For example, the Sphere Arena, considered as a monumental feat in modern construction in Las Vegas, took a whopping $2.3 billion to finish, while initial estimation was around $1.2 billion. This $1.1 billion increase created a cash crunch for the parent company to an extent, where they had to spin it off as a separate company to minimize the cash flow impact from spreading across the group.
Furthermore, many functions in the construction industry still use physical pen-and-paper entries to fill order details, log time sheets for employees and track the work progress of projects. And of those who have turned to software to solve these problems, it is found that in most cases, the software adds to all the existing complexity.
What the industry really needs is software that can cause tangible improvements to their construction project management process, not software for the sake of it, which is what we see a lot of today. Enter Artificial Intelligence(AI). Below, we look at the transformative potential it has during the construction phase.
Dynamic Resource Allocation
As we discussed in the earlier article on AI in construction, sophisticated AI algorithms don't just process real-time data; they predict and plan. They foresee the need for more hands-on-deck or materials and autonomously adjust allocation and timelines, keeping your project not just on track but ahead of schedule. It's not just about tracking labour and materials; it's about pre-emptively adapting to meet the project's needs, ensuring optimal efficiency and cost-effectiveness.
Automate Tracking and Analyze deviations
AI can provide real-time insights on the progress of work that gets finished or delayed. The program can be taught to compare it with the master plan to find any deviation or latency in the progress and map a contingency if needed. These tools can give project managers accurate real-time data, which helps them make better decisions.
Imagine field workers updating project statuses with their voice, on the go.Speech-to-Text technology makes this a reality, and with AI analyzing these updates, it could prove to be a catalyst for intelligent insights and better decisions with respect to predicting upcoming issues or adjusting project timelines.
Monitor Costs
AI tools can analyze all data from construction plans, bids, specifications, contracts and invoices and provide accurate cost estimates for construction projects, aiding in better budget planning. By using machine learning models, AI can identify patterns, relationships and factors that directly impact the cost of the project and uses natural language processing to extract relevant information to provide accurate cost estimates, as well as insights and recommendations for cost optimization.
A key benefit of these insights for construction companies lies in enhancing the accuracy of future bids. By analyzing data from past projects, companies can retrospectively identify where their previous bids fell short for them and address these gaps in upcoming proposals. This practice not only fortifies the bidding process but also instills a deeper understanding of the multifaceted factors influencing project costs, ultimately leading to more competitive positioning and improved financial performance in future undertakings. This practice of analyzing bids after the fact is not common, so companies that can leverageAI to make this a common occurrence can carve a significant advantage for themselves over those who don’t.
Real-time AI Insights in Construction Progress
The tons of reports coming in from the field every day form a goldmine of data and information that AI can read, understand and visualize to you in the form of dashboards. These dashboards not only give you essential information, but will also help you make better, data-driven decisions that can improve your construction processes.
While the construction industry is ripe for digital transformation, 72%of the companies in this sector has been pushed to change priorities in their processes, business models, and ecosystems, according to a IDC study. Although more young workers are joining the construction industry, the sector still has more than a quarter of its workforce over the age of 55, according to NAHB. This has led to issues of embracing modern technology and solutions by people in the industry.
Developing new tools based on artificial intelligence will not solve the problem, unless it is easy enough to use that it gets buy-in from all employees, especially the field crews. While new products are developed to tackle the challenges in the construction industry, the complexity of these products bring about challenges in training the workforce to use them. Since the learning curve for most products is long, and the apps themselves are complex, there is no adequate incentive for field crews to actively use these tools. This further highlights the need for solutions that are intuitive and easy to learn/adopt.
Moreover, when construction companies look to digitize their processes, a systemized approach has to be put in place to undergo phased ensure the transition is as smooth as possible for the employees.
The construction industry doesn’t need more complications; it needs simplicity that is tailored to its unique challenges.It demands solutions that don’t just store data but actively utilize it to empower decision-makers. By embracing AI-driven platforms that are user friendly and widely adopted by field crews, the construction industry can achieve just that, and give the world countless success stories that were built one data-driven decision at a time.
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