digital-feature
Digital transformation is growing apace, but some industry players are being left behind. Image – Canva
  • The development industry is seeing a growing need for digital transformation
  • The 22-question survey was completed by 166 property industry participants
  • The tools poised to deliver the most powerful results are those that manage and mine data

The development industry is seeing a growing need for digital transformation after the Data Differentiator report was released by Procore and Property Council of Australia

Property Council’s NSW executive director Luke Achterstraat said, “our research confirms that the tools poised to deliver the most powerful results are those that manage and mine data.

“This research by the Property Council and Procore suggests a real enthusiasm for tools that enhance collaboration across the construction lifecycle and along the length of the supply chain.”

The 22-question survey was completed by 166 property industry participants in July with the results later shared with industry leaders, with 53.8% in property or operations management, who offered additional insights into the findings. 

Mr Achterstraat said the research points to the future where data and analytics are used on a daily basis to enhance quality, reduce defects, maintain compliance and support better onsite health and safety.

“We also found a clear warning: multi-million-dollar twenty-first century projects can’t be managed effectively with twentieth century tools.

“The dialogue is underway, and our new report offers new insights for discussion. Our challenge as an industry is to translate this discussion into true digital transformation that supports compliance, manages risk and delivers better quality buildings.”

Luke Achterstraat, Property Council NSW executive director

The report stated, “we need to step up our investment in digital technology to transform our processes, elevate quality and meet the challenges of the 21st century.”

Data

The report found data plays a critical role in communicating efficiency, compliance, and profitability to shareholders and other stakeholders.

Frasers Property general manager of delivery and operations Nicholle Sparkes said data provides a lens for decision making.

“The most compelling benefits are unlocked when linking data to performance and the deployment of resources, where tracking opportunities for improvements in wellbeing, safety and sustainability, leads to improved quality outcomes for our customers, and also enhances our bottom-line profit forecasts.”

The value of data to commercial real estate projects include:

  • Identifying potential defects in advance
  • Reducing the risk of litigation
  • Measuring and minimising the environmental impact of occupants
  • Demonstrating business risk profile to external stakeholders
  • Predictive insights that guide decision making
  • Standardising project processes
  • Increasing efficiency and productivity
  • Identifying and iteration best practices
  • Identifying common reasons for delays
  • Better understanding typical project timelines

data

Technology transformation

Before the pandemic, the global construction industry had been investing in technology at a record rate. 

Despite its long-held reputation for being behind the digital curve, venture capital investment in construction technology outpaced the rest of the market by 15-fold in 2019, according to McKinsey.

The report states while construction technology has advanced rapidly in recent years, the survey found construction companies continue to manage multi-billion-dollar projects in Excel spreadsheets.

“Fail to take digital transformation seriously at your own peril,” said Unispace chief risk officer Luisa Young. “Companies need to stay agile, innovative and constantly challenge themselves by asking ‘what could we be doing better or more efficiently?’

“Technology and digital innovation play a huge role in keeping a company relevant and able to deliver its business objectives. To me, digital transformation is no longer a choice, it is a must.”

Luisa Young, Unispace chief risk officer

Goodman Group chief executive officer Jason Little added that “to keep up with changing habits across the physical and digital space, and to enable mobility and agility, adopting technology is important.

“Our properties are continuing to provide opportunities for automation, which enables efficient use of space, higher speed to market and greater supply chain efficiency.”

Priority business processes

The construction sector is now embracing technology at speed to gain greater insights into feasibility and costs, automate tasks, and enhance collaboration.

Building information modelling (BIM) is the technology with the firmest foothold in the industry, according to the report. However, BIM and digital twins which optimises BIM, are also the two technologies least likely to impact project quality or risk management over the next three years, according to the respondents.

Instead, the respondents opted for other tools to enhance their traditional businesses processes:

  • Real-time portfolio view insights
  • Benchmarking project costs across the industry
  • Tools for more accurate feasibility analysis
  • Tools for greater collaboration during pre-construction
  • Data centralisation technologies
  • Software workflow automation
  • Predictive analytics for cost modelling
  • Pre-fabrication of components
  • Modular construction

digital-people

Digital & talent

Better technological business processes were found to support people.

Respondents recognised using technology is the best way to retain top talent. 

The report stated more than 80% of respondents said ‘give us the tools to help people do [our] jobs better’. 

Mr Little said, “automation can help to reduce time and effort and improve safety. In many cases, however, automation and technology require human support and collaboration.”

Best strategies to retain skilled project staff according to industry leaders

Strategy 

%  agree 

Eliminating targeted tasks with automated processes/workflows

22.9%

Enabling job responsibilities to be carried out with better technology

20.6%

Eliminating ‘boring’ or ‘low value-add’ tasks entirely with automated processes/workflows

17.1%
Reducing the time it takes staff to perform targeted tasks

16.6%

Helping staff improve their productivity within existing tasks

13.1%

Shifting job responsibilities to higher value add tasks

9.7%

Calls for software reviews

The report found 79% of companies are reviewing their project management software with “alarming infrequency”.

57% of companies reviewed their software every three years, 21% every year, and 22%   every five or more years.

The report stated, “tech-forward businesses can rapidly gain a competitive advantage over those operating on legacy systems.”

Charter Hall managing director and group chief executive officer David Harrison said, “Development and construction have made huge improvements but, as with all industries, keeping pace with technological advancements will  be a challenge for all industry participants.”

The COVID-19 industry pivot

“Despite the pivots in response to COVID-19, the pandemic has not influenced the viability of the industry’s project pipeline, with 85% of respondents noting COVID-19 has had zero impact on development projects,” said Mr Achterstraat.

It was found companies actually used the downtime and lockdowns to their advantage to upgrade their assets.

Multiplex systems and operations developer Mark Wengritzky said, “as a result of the pandemic in 2020 many systems were digitised to streamline activity and processes – including the ability to review quality at the time of installation and works on site.”

4% of respondents in the Data Differentiator report were concerned about shrinking project pipelines, with others more concerned about the challenges of growth such as the availability of land, funding, and a rapid rate of delivery which could erode quality.

Another concern was when the industry bounces back from the pandemic, a rapid rate of delivery could erode quality.

The report states, “the federal government’s HomeBuilder scheme has been an economic workhorse, boosting confidence and securing jobs across Australia during the COVID-19 crisis.”

However, the survey responses suggest the development industry is also racing to prepare products while the market remains hot.

Industry’s most pressing post-COVID risks

Risk

% Industry leaders
that agree

Greenfield scarcity

17%

Debt availability

16%

Time and budget pressures leading to more risk around quality/defects

15%
Quality assurance and compliance

14%

Delivering projects on budget

9%
Delivering projects on time

9%

Skills gap/lack of workers 

7%

Cashflow issues

5%

Unsold inventory/high vacancy rates

5%

Reduction in pipeline

4%

~~

The Data Differentiator: Australian property leaders reveal how using data today can mitigate tomorrow’s risk, a new report from Procure Technologies, and the Property Council of Australia; based on a July 2021 survey of 166 senior industry leaders in Australia.

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