LTIMindtree
Samara Almeida, Sr. Consultant – Digital Consulting & Advisory Practice, LTIMindtree.

The Engineering & Construction (E&C) industry has typically lagged behind its peers in adopting cutting-edge technology. However, E&C companies have now begun to witness the humungous benefits that digitalization can reap. From increased productivity to enhanced safety at job sites and improved resource utilization – there’s no denying that technology can drive significant positive business outcomes and more and more E&C companies are looking to embark on a digitalization journey.

However, there is still a lot of ambiguity on how to go about such large-scale transformations, with no straightforward answers to questions such as – What is the correct starting point for a digital transformation? Is a big bang or incremental approach right for this change? How will the inherent dynamism of the construction industry affect digitalization?

While there cannot be a ‘one-size-fits-all’ approach towards digitalization in any industry, this paper delves into key considerations that impact the success of digitalization efforts, based on our vast experience of working on several digital transformation programs in the E&C space.

People

Effective Organization Structure Embedded with Digital Champions

A key consideration while planning a digital transformation is ensuring the right organization structure to facilitate it. The responsibility and accountability for ensuring that the transformation is a success cannot lie with a standalone siloed digital organization that works independently but instead needs to be shared with the business organization. It is also imperative that individuals at different levels of the organization champion the transformation. In a recent digital program for a leading construction major, we followed a dual-accountability model, with a Central Digital Organization leading the technical aspects of the digital implementation and Digital Officers within the business organization being responsible for business-related aspects, including functional alignment and user adoption.

Involvement of Business Teams during Solution Conceptualization and Design

It is essential that key stakeholders have faith in the potential of transformation programs underway and the conviction that digital technologies can not only support their business needs, but also drive improvements. By being involved in the conceptualization of the digital solution, these business stakeholders can shape how the solution evolves and promote its usage within their organization. This helps bridge the business-IT alignment gap. Not only is involving business teams from the onset crucial, but also getting the business to sponsor quick Proofs of Concepts (PoCs) and pilot digital implementations is beneficial for getting their buy-in into the digital transformation.

Right Skilling and Capability Building to promote Digital Adoption

Solutions aimed at digitalizing the construction industry range from IoT sensors on key equipment to RFID sensors for tracking movement of workers across the construction site to digitized material tracking solutions such as digital weighbridges. The intended users of these solutions are typically teams working on project sites — construction workers, site engineers, store managers, and plant and machinery managers. While digitalizing the construction industry, it is important that these users receive the necessary training to understand the purpose of these solutions to be able to use them correctly. Also, depending on the solution complexity, the on-ground team may need to be equipped with the necessary skills for basic troubleshooting of the solution. For example, in case of remote construction sites, having the on-ground Plant & Machinery (P&M) teams perform basic troubleshooting of equipment sensors (ensuring they are properly connected to a power source, etc.) can be extremely beneficial and save both time and money on technical support.

Process

Plan for Phasing out Manual / Old Processes with Automated / Digitally-Enabled Ones

An anticipated and taken-for-granted outcome of digitalization is that it will simplify everyday tasks of users in areas where it is deployed, and free up time and effort to be spent on more value-adding activities. However, if not fully thought through and planned well, digitalization could end up creating additional effort, resulting in user frustration and poor adoption.

Consider, for example, a Digital Progress Reporting tool for tracking the output of work done at site daily, wherein site engineers must key in the quantum of work done on their section and an automated report is created on the overall site progress for use during internal daily project reviews. However, the site engineer also continues to have to enter data in the previously used spreadsheets, as progress reporting to the client is still based on these spreadsheets. This will result in duplication of efforts and eventually adoption of the new system will suffer. In this case, it would be most fitting to ensure that the client reporting process can also be modified based on the new solution.

Structural Changes Driven by Digitalization to Unlock Full Value Potential

Very often, the view towards the advantages that digitalization can bring about is rather short-sighted. In the E&C industry, technology is still largely seen as an enabler, rather than a driver of business change. However, to do full justice to the potential of digitization, it is highly essential to take a step back and evaluate whether digital solutions can drive business changes that can positively impact the organization’s KPIs.

In a recent study, batching plants used for producing concrete were digitally connected to capture and monitor their utilization and production output on an hourly basis. Plants with insufficient capacity, in comparison to their plans, would typically purchase Ready Mix Concrete (RMC) from the market at a higher cost. Visibility into production and plans of neighboring plants on an hourly basis resulted in the potential to establish processes for sharing of concrete across plants within a certain proximity to each other. Ancillary processes were set up to support the transportation logistics and financial accounting for sharing. This structural change of sharing concrete between sites that was a result of digitalization resulted in increased plant utilization by 10% and a 6% reduction in the purchase of costlier RMC.

Effective Governance Mechanisms

A very critical aspect of any transformation program is governance and digitalization transformations are no exception. Large transformation programs need to have processes set up for regular progress reviews, change communication and broadcasting, and value measurement and monitoring. Governance is more of a challenge when the transformation spans multiple business units and geographies, and the pace of transformation and digital maturity across units are not uniform. In such cases, governance mechanisms may be customized as per the needs of each business unit. It is also important to ensure that operational governance continues even after the transformation is complete, with a shift of focus to driving adoption of the new solutions, and ensuring sustainability of associated business changes and capturing benefits.

Tools / Technology

Right-Fitting and Right-Timing the Technology Change

With companies waxing eloquent about their success from digitization, it is tempting to leap onto the digital bandwagon. However, without the necessary groundwork, this could be a recipe for disaster. For a disruptive technology to be successful, it not only requires an organizational ecosystem that is digitally mature enough to provide a backbone to the transformation, but also an entire technical ecosystem to support it with the right set of services, standards, guidelines and regulations — both internally and externally.

Consider, for example, a road construction company that has recently installed sensors on its equipment that capture various machine health and operational parameters. The company plans to use Artificial Intelligence to predict the breakdown and failure of these equipment. In the absence of sufficient historical equipment parameters and breakdown data to train the AI algorithms, it is unlikely that such a model built on a few months of data will yield accurate results. Another example could be the implementation of a Connected Machinery solution within a geography, where the basic infrastructure and network connectivity to support it is lacking. While these are not showstoppers to digitalization, companies should be cognizant of the prerequisites to rolling out disruptive technologies and should factor in plans for solving such roadblocks into their transformation journeys.

Integration of Digital Solutions within Overall Technology Landscape

Introduction of new digital technologies into any organization’s technology landscape must be considered within the purview of the broader technology landscape encompassing both traditional and disruptive technologies. Very often, Digital and IT organizations function independently of each other, and digital strategy and planning is done independently of IT strategy, resulting in systems not talking to each other and duplicate systems running in parallel, performing the same or similar functions, ultimately leading to end-user frustration. In the E&C industry, where digital tools and solutions are very diverse, there is potential to derive immense synergies by effectively integrating systems.

In a recent consulting engagement, our client had a robust process in place for weighing material flowing into the construction sites using digitized weighbridges. However, the material receipt note that was generated in the ERP system was based on a manual feed of material quantity, which was subject to manipulation. In an attempt to reconcile data between these two sources, it was discovered that this seemingly minor integration miss had resulted in major material losses for the company, reinforcing the criticality of tightly coupling systems together.

Quality Assurance of Digital Technologies

Digital quality assurance is imperative to ensure an optimal end-user experience. In today’s world, the focus is often on getting the solution in production at the earliest and crunching the time-to-market, using agile methodologies and DevOps. While it’s great to give users a chance to get their hands on the technology in a live production environment as soon as possible, quality processes should not be compromised in the process.

With very new technologies, the digital implementation teams particularly need to ensure that major technical glitches are ironed out before pushing for solution adoption. If not, it is very likely that the early rollout will backfire and result in an overall disgruntlement with the solution due to defective outputs. The inherent nature of the E&C industry – job sites in remote locations without sufficient network connectivity and sometimes power sources, interference from materials such as concrete and steel to the working of technologies like RFID, rough usage of both material and machinery that are to be ‘connected’ — makes it more challenging to ensure quality data outputs from Connected Solutions in this industry. This, combined with the fact that project teams at job sites are often looking for an excuse to continue their existing way of working and not digitalize, make quality assurance a critical factor to the success of construction digitalization.

While this paper has provided an introduction into the important aspects to be taken into consideration while undergoing a digital transformation, the subsequent papers in this compilation provide further insights into how digital technologies can transform construction planning, tendering, labor, P&M, and material management, so as to improve KPIs such as P&M utilization, labor productivity, planned vs. actual project completion and material wastage, and ultimately result in cost savings for the organization.

LTIMindtree

About the Author

Samara leads the Strategy & Value Realization practice within LTIMindtree’s Consulting organization. She works with CXOs and senior leaders to develop & drive digital transformation strategies and has helped clients derive tangible business outcomes by effectively leveraging digital technologies. She has deep domain expertise in the areas of EPC and manufacturing.
 
LTIMindtree is a global technology consulting and digital solutions company that enables enterprises across industries to reimagine business models, accelerate innovation, and maximize growth by harnessing digital technologies. As a digital transformation partner to more than 700 clients, LTIMindtree brings extensive domain and technology expertise to help drive superior competitive differentiation, customer experiences, and business outcomes in a converging world. Powered by 84,000+ talented and entrepreneurial professionals across more than 30 countries, LTIMindtree — a Larsen & Toubro Group company — combines the industry-acclaimed strengths of erstwhile Larsen and Toubro Infotech and Mindtree in solving the most complex business challenges and delivering transformation at scale. For more information, please visit https://www.ltimindtree.com

Colliers leads AI revolution in construction with remote monitoring tool CoGence
Real estate advisor, Colliers, has been carving a niche in the tech space with its AI-enabled platform CoGence. Designed to detect anomalies at construction sites and generate a high precision quality report, the tool is widely being applied at several of the

Read more ...

Cement volumes to expand by 9-10% in FY 2024 despite moderation in growth in H2: operating margins to improve by 260-310 bps to 16.0-16.5%: ICRA
ICRA expects cement volumes to rise by a healthy 9-10% in FY2024 supported by demand from infrastructure and urban housing sectors. In H1 FY2024, the volumes increased by 11-12% YoY. Nevertheless, the below normal monsoons could impact the

Read more ...

Polls Perk Up Realty & Infra Projects And Vice Versa
The ruling government is pushing speedier completion of real estate, housing, and infrastructure projects to win the confidence of voters in the upcoming elections in five states and the General elections in 2024. In turn, the polls are providing a renewed

Read more ...

IMEC:  A Big Booster for India’s Infra Construction Sector
The 8000 km multimodal transport corridor known as the India Middle-East Europe Corridor (IMEC) initiated at the recent G20 Conclave in New Delhi, is set to open up a multi-billion dollar opportunity for the growth of India’s infrastructure and construction companies

Read more ...

Considerations for Site Selection for Engineering Plant Projects
Site selection is the first and most important factor for location of any Engineering Plant Project as they involve huge construction costs. An unsuitable or wrong project site can result in great loss and may also lead to delays or failure of the project. Anil Kumar Nanda

Read more ...

Construction Mishaps - A Question Mark on Quality & Safety
Zainab Faridi compiles a series of recent construction mishaps that not only underscore the perils faced by Indian construction workers but also expose the urgent need for stricter quality check parameters, a skilled workforce, accountable project management

Read more ...

Decarbonizing Construction Industry for a Greener Future
A recent report by Deliotte - Shell indicates that the construction sector accounts for 37% of global CO2 emissions, of which 16% represent embodied carbon, that is carbon dioxide coming from material sourcing and manufacturing, logistics, and construction

Read more ...

Policy Prescription for Circular Economy to Boost Infra Construction
At a time when India is pushing policy reforms in a big way to provide a major boost to its economy, the generation of colossal 9.46 million tons of plastic waste every year and 150 metric tons of construction waste annually (about 40% of the global

Read more ...

7 Years of RERA Of Promising Gains, Challenges & Pitfalls
After seven years of its journey, the landmark reform of RERA (Real Estate Regulatory Act) has made some remarkable gains in terms of regulating the sector and protecting the interests of homebuyers. Especially considering that two crucial years were

Read more ...

National Ropeway Development Programme to Boost Real Estate
A massive USD 15 billion National Ropeway Development Programme of the Central Government, currently underway, will provide a major aerial connectivity boost to real estate, especially in Tier 2-3 cities that have high tourism potential. A Rs 1.25 lakh crore

Read more ...

J&K Realty and Infrastructure Development on Fast Track
As Jammu & Kashmir prepares to host G-20 Tourism Meet in Srinagar from 22-24 May 2023, the strides made by the Union Territory on urban development (in a run up to this conclave following the abrogation of Article 370 in August 2019), will provide

Read more ...

Ashoka Buildcon Achieves Largest Continuous Concrete Pour for Building Project
Ashoka Buildcon Limited has several prestigious projects under its belt and has to its credit notable record-breaking achievements - the latest being casting of a raft with 12400 cubic meters of concrete. With this feat, the company is eager to get

Read more ...

Investment Bonanza in UP to Fast-Track - Real Estate & Infrastructure Development
Riding high on landmark reforms and performance-driven governance, Uttar Pradesh has received a record investment proposals of over 33.50 trillion from Indian and foreign investors at the recently organised 3-day Global Investor Summit (GIS) in Lucknow

Read more ...

Mega Projects: Redefining Geographies
Mega infrastructure projects like flyovers, elevated roads, highways, metros, bridges, tunnels, expressways, etc, are redefining how we interact with our surroundings; in fact, Infrastructure is intrinsically linked to everyday life and is a defining

Read more ...

Major Connectivity Projects to Transform Urban Development Landscape of Delhi-NCR
With some state elections and general elections in sight, the Modi government has pulled out all stops to put its mega infrastructure projects on fast track for the socio-economic upliftment of people. A number of such key infrastructure projects

Read more ...

Women in Construction - Diverse Perspectives Will Drive Progress
India’s construction industry is advancing and embracing new technologies, and thereby throwing up exciting opportunities for women to grow professionally in traditionally male-dominated roles. With the advent of robotics, digital twins, and remote

Read more ...

Dola Roychowdhury - Founder Director, GCube Consulting Engineers LLP
The pay parity issue is very subtle and fragmented. It doesn't exist at entry levels any longer - but tends to widen as you go up the chain and hit that invisible ceiling. Compared to the global gender ratio of about 12%, India's female ratio is much lowe

Read more ...

Minimol Korulla - Maccaferri ISEAP
The global Infrastructure Construction industry currently has a female workforce ratio of 10% to 14%, while in India it is 8% to 12%. However, the representation of women in senior managerial roles is less than 2% - both globally and in India. The lack

Read more ...

Rubee Kongbrailatpam - Public Works Department, Manipur
The shift in perspective towards women's roles in the construction industry and the de-genderization of roles is a significant step towards creating a more inclusive and diverse workforce. Stereotypes and prejudices against women in construction

Read more ...