DISRUPTIVE TECH

The construction and engineering industry must prioritise the integration of digital technology to create new revenue streams and streamline operations . Through the implementation of AI and automation and the adoption of a servitised business model , the industry can address challenges like labour shortage , project costs , efficiency , and customer loyalty . construction and engineering companies to evolve to a servitised business models , also providing the services that support the operations and maintenance of an asset ’ s lifecycle . This servitisation trend is accelerating at a rapid pace , with a goal for this revenue stream to be greater than 50 % of their total revenue .

Many sectors face the challenge of low project margins , intensified by macro-economic conditions that complicate investment in new capital projects . Accurately forecasting which projects contractors will secure a winning project margin on is a difficult task .

These factors make it risky to operate a business that relies on a small volume and poses potentially serious implications . As a result , this can lower their stock market valuation as they are characterised as volatile investments .

AI and automation in construction is the use of machines and computer systems that can perform tasks that normally require human intelligence , such as design , planning , monitoring , and analysis . According to a forecast , 30 % of construction and engineering companies will deploy AI and automation within the next three years .

Addressing this , companies are actively seeking to diversify their businesses and reduce the impact of large value , unpredictable , low volume projects . By offering asset operations and maintenance services , construction and engineering companies have an effective way to grow , and foster resilience in their business .

Some day to day examples include , using AI to collect , process , and analyse large amounts of data from various sources , such a business systems like ERP , to provide insights and predictions for construction projects , such as site conditions , project risks , forecast future project costs and margins and performance indicators .

Devices that can be worn by workers to enhance their safety , productivity and communication , such as smart helmets , glasses , vests , and gloves .

Integrating of building information modelling , BIM and AI to improve the design , coordination and management of construction projects , such as generative design , construction optioneering , and data analytics .

Using AI to monitor and track the location , usage , and status of tools , equipment , and materials , using devices such as RFID tags , GPS trackers , and smart sensors .

Planning and scheduling

A significant benefit of this approach is the production of recurring revenue streams . Long-term maintenance contracts with a 5-to-10- year duration are becoming more common . In fact , this business strategy accounts for over 50 % of construction and engineering companies ’ revenue , with the aim of making the business more sustainable in the long term and increasing its market valuation .

There are many additional advantages to adopting this strategy that benefits the construction companies and their clients .

Aligns with asset owner

Construction and engineering companies have detailed knowledge of the asset they build . They are in the strongest position to understand how it should be maintained in order to maximise its performance and cost efficiency . We see this trend moving towards a Contracting for Outcomes model where clients ask the company to design , build , operate and maintain the asset .

Intelligent planning and scheduling using mathematical models can improve business performance both in terms of productivity and improved project and maintenance service delivery performance . This impacts all types of resources including labour , equipment , materials and subcontracts .

IFS describes this as transitioning from being a construction or engineering contractor to becoming a Total Asset Lifecycle Service Provider .

Resource utilisation

For many construction and engineering companies , the consideration and adoption of AI and automation are opportunities to address a number of very traditional and long-standing challenges , such as skilled labour shortages , that will only accelerate over time .

Construction and engineering companies design and build assets as their primary focus . It will become increasingly common for

Contractors have a skilled labour force that have the knowledge to construct install , repair and maintain the elements that comprise an asset . These skills will be employed by the main or speciality subcontractors . By expanding the work beyond construction and installation tasks to maintenance work offers a way to increase labour productivity ,. leading to improved margins for the contractor , faster response times for the asset owner , and higher quality service .

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