Australia's construction industry needs a data-driven makeover

The local building and construction players are already using technology but the problems of chronic underinvestment and a lack of innovation need to be nipped in the bud.

As Australia nears the end of a huge construction boom driven by the mining and resources sectors, the time has come to take steps to ensure our continued economic prosperity. Opinions are divided whether the end of the boom is a crisis, but it would be hard to find an economic commentator that hasn’t talked about the structural shift that has occurred and the rebalancing of the economy that now needs to take place.

In this environment, governments and industry need to encourage innovation to ease Australia’s difficult rebalancing act.

That is why we should pay close attention to what is happening in the United Kingdom right now with Building Information Modelling (BIM) and seriously consider adopting it here as well. In the UK the government will require all project and asset information, documentation and data on its projects to be BIM-compliant by 2016.

A data-driven approach to construction

Despite much debate about what BIM is, the UK government has clearly taken a data-driven approach to changing how the construction industry works. The goal is to make both construction and assets more efficient to reduce upfront and operational through life costs.

Cynics may say there’s nothing like a deep recession and a large national debt to spur governments into action. Crisis or no crisis, however, Australia is certainly heading into interesting times. Even after the resources investment boom, building and construction will be pillars of the economy. As the costs of building and construction flow through to everyone they are fundamental to our competitiveness.

There’s great potential for efficiency improvements in the construction industry from the data-driven approach to process efficiencies that BIM encourages. These efficiencies are at three levels: within construction companies themselves, throughout the construction supply chain more generally, and in the ongoing management of the assets that are constructed.

It’s not that building and construction are not already using technology. Everyone now has access to computing devices of one sort or another to enhance their individual productivity. But due to underinvestment and a lack of innovation the systems most people use do not talk to each other and many opportunities for enterprise or supply chain efficiencies are lost.

While technology is only part of the solution – people and processes are equally if not more important – technology can act as a catalyst for change and innovation. This is certainly how things are playing out right now in the UK with BIM. Instead of thinking about it as a 3D design model – probably a fair assessment of how it is mostly viewed in Australia – the UK government and industry are now talking about how to capture and share data throughout the construction and asset management supply chain to encourage new, more collaborative and more efficient ways of working.

The cost of BIM adoption

Of course, there is a cost to something like BIM. The investment is not huge in terms of dollars but it is larger in terms of people and processes. We can see from the UK that there is some pain involved with predictions that some construction companies may fail to make the transition in time and be locked out of government business until they do.

While there is nothing to stop Australian companies adopting BIM right now, the lack of skills and expertise mean the benefits to a single early adopter will not be as great as those that would flow from the UK scenario where the government kick-starts innovation. It is a classic case for government action, where the benefits of the initial investment flow to the entire economy. As a single large actor, a government can quickly create critical mass where individual companies cannot.

Australian governments have often expressed concern about high costs in the construction sector. Corruption has often been cited as a factor and various initiatives have been put in place to tackle it. It would be hard to imagine that corruption is a bigger culprit than inefficiency, however. And BIM has the added economic benefit of lowering the long-term cost of asset ownership beyond just the initial cost of construction.

Following UK’s lead

Given traditional cultural and business ties, Australia is also well placed to benefit from what is happening in the UK. Similar initiatives here would undoubtedly see significant skills transfer between the two countries that would accelerate BIM adoption. This process has already started in a small way. IFS has already been asked by local construction companies about what BIM support we can offer, due to the fact that they have operations in the UK.

And we have also seen an uptick in technology investment generally by construction firms that have benefitted from the resources investment boom. Many of them understand the need to improve their enterprise information systems in order to compete and survive in the times ahead.

Mandating BIM would give these firms an extra incentive and a focus to their investments. It would also ensure better quality and more complete information for sharing along the supply chain and with the eventual asset owner.

Action on BIM on the part of the Australian government – perhaps not as an absolute trailblazer like the UK but as a fast follower looking to capitalise on what has been learnt there – would spark much needed innovation and change in our own construction sector with benefits to the economy as a whole.

Rob Stummer is managing director, Australia and New Zealand for global enterprise applications company IFS. He holds a Masters in Information Technology from Melbourne University and has consulted to many of Australia’s Top 500 companies.