Construction in the UK is on a mission. It aims to benefit from ‘new and existing technologies, data, and analytics to enhance the natural and built environment’ in order to increase commercial competitiveness and productivity. This strategy is backed by the government in their 2025 Construction Industry Strategy, which emphasises that construction and digital are a partnership crucial to the nation’s economy.
Slowly, a digital evolution has been rumbling within the sector. From the introduction of Digital Construction Management Systems, Common Data Environments, Artificial Intelligence, Virtual Reality and drones, the construction industry sits on the edge of innovative techniques and technologies. However, as impressive as this potential is, many companies still struggle to adopt and implement new technology.
Tasked to improve the country’s competitive advantage, businesses have faced significant challenges with digital transformation which has resulted in the benefits of this evolution not yet fully being realised. Exploring this in more detail, here are the top three challenges to digital transformation in construction:
1. Resistance to change
There is a great irony in the fact that construction firms are masters at delivering change (by definition, construction is to literally build change) but when faced with change themselves, commentators have found organisations can be ‘resistant and hesitant to act’.
This is likely due to the people element. Naturally, some people are uncomfortable with change and it takes skilled change strategies and approaches to lead us, sometimes by the hand, to try something new. Is training, for example, seen as a one-off investment or a continuous effort? Ongoing learning and development programmes ensure that teams feel confident in using new tools and this can aid long term adoption of new behaviours. If we look back at the historic and continued investment required to change behaviours related to Health and Safety, we can see the effort was and is significant. In construction, ways of working are so embedded that the smallest of steps can feel like a chasm.
For example, the design phase used to require a senior engineer to physically ‘markup’ a drawing using pen and paper. These days, corrections to drawings are noted on the digital model. Although the principles are similar, the skillset required for the senior engineer has changed.
These changes can be scary for people. They threaten their work, their position and can therefore cause the individual considerable stress. The challenge for digital transformation is to break through this resistance and the only way to do that is to ensure that there is sufficient change management in place.
In these scenarios, change management is more than communications and training, it is about ensuring that people are comfortable and feel part of the change in a positive manner and understand the new behaviours and competencies required to be able to excel in their roles. Get people on side and their understanding of the value will mean resistance may start to subside.
2. Prioritising short-term revenue and savings
Construction is known for its strict deadlines, project pressures and tight margins. Consequently, cash truly is king in this sector. As a result, in comparison to the budgets for projects, there is typically less being invested in internal initiatives.
Internal investments are typically sought to identify cost savings, however investment for digital transformation challenges this, as it is an enabler for growth and efficiency improvement with less immediate, tangible benefits. Digital transformation requires time and money; it is a long-term change that starts with people’s behaviours and is supported using technology. Financial rewards are not immediate, but the benefits are often large. Businesses are beginning to realise this, but there is still reluctance to commit.
With the backdrop of an uncertain economic climate due to Brexit, it was not expected that this would change soon… until a global pandemic physically forced us to work apart, accelerating digital transformation to a pace never seen before. Within weeks, new systems were adopted, staff were trained, and hardware issued, activities which may have taken months previously.
It is yet to be seen if the success of this swift adoption will change how the sector approaches future digital transformations. Will the reliance on digital tools stay as strong or will people and businesses revert to ‘traditional’ ways of working when given the chance? It is probable that there will be a bit of both, but what has been proven is that if investment and effort is committed to a digital transformation, it can lead to rapid, tangible success.
3. Fragmentation of teams
One of the key differentiators for construction firms is that within them, they have separate entities which specialise in various disciplines. These functions work in different ways, follow different industry standards and will therefore, have differing cultures. This siloed mentality can be prevalent which can lead to challenges when trying to encourage collaboration, particularly using digital platforms which different teams may be less familiar with.
Aligning digital solutions to be effectively applied to these differing ways of working is a complex feat – and this is before you consider the required coordination with third parties such as subcontractors!
To overcome this, key processes get recorded at higher and higher levels until they can be applied to all disciplines. This leaves gaps in the detailed requirements for specific functions and can be a cause of poor adoption of digital tools or result in the full benefits of the solution not being realised. Frustrated, functions take it upon themselves to find a solution which suits them better and just like that, shadow IT can proliferate with new silos created and digital solutions enabled in an uncoordinated manner.
But how does this impact those on-site? Back office functions have typically been well serviced in digital transformation, with Finance and HR solutions being prioritised, but many site activities remain largely manual and paper-based. Arguably, the back office is there to enable the site-based functions to perform their role as effectively as possible so, it does pose the question of why site processes are so behind.
The challenge here for digital transformation is to turn the initiative on its head – be driven by the bottom up (site-based), not from top down (back office based). IT has a key role as a facilitator and enabler; linking key teams together, supporting the documentation of processes, providing coherent communications, and enabling collaboration, so that the business needs can be fully explored and understood, tested, and then delivered via appropriate digital solutions.
Is there a mechanism for staff to suggest improvements or provide feedback? Establishing these types of communication channels is a great first step to identifying opportunities, whilst increasing staff engagement. From there, empower your staff to produce a simple business case to explain the benefits and suddenly, you have the beginnings of a bottom-up driven initiative. Working together in this way, digital transformation can deliver the value required – it just takes the right process and involvement of teams early enough in a programme to ensure the calibration is correct.
For more information about digital transformation and how you can set up your programme for success, contact DavidD@NineFeetTall.com
Lines, Brian & Sullivan, Kenneth & Smithwick, Jake & Mischung, Josh. Overcoming resistance to change in engineering and construction: Change management factors for owner organizations. International Journal of Project Management.