Digital transformation is a process that aligns technology and digital resources to your current business needs and future goals. It's happening across industries, from AEC (our focus here) to design and manufacturing, media and entertainment, and beyond. What if you could understand your current organizational state and identify major issues that are costing you a lot of time and money? What if you could develop a process for your future built environment needs that prevents those issues from becoming problems in the first place? What if you could use technologies and data to further your business goals? This article breaks down the steps necessary for getting started on your AEC digital transformation journey and creating a much more efficient way of managing your complete built environment lifecycle.
Before diving into the journey towards digital transformation, it is important to understand the driving force behind the need for organizations to transform in the first place. Rapid evolution of technology has created a perfect environment for digital disruption, pushing organizations to evaluate their business models at the core, and make sure their goods and/or services still provide value to their clients. Regardless of the type of organization in question, there is always room for both marginal and transformational improvement. More often than not, there are organizational silos in place which are fairly set in their ways, and difficult/resistant to change. As a result, those organizations that do not evaluate the alignment of their current processes regarding how and what they deliver relative to the advancement of technology will find themselves in the rear-view mirror of the organizations that do.
Related: New Business Models and Digital Platforms in Construction 4.0 with Olivier Lepinoy
Total Cost of Ownership
When it comes to the AEC industry, one of the driving forces of digital transformation is the total cost of ownership (TCO) of the built environment. Design and construction industries have historically been fairly disjointed, resulting in tremendous amounts of duplication of effort and resource waste in the form of non-optimal activities.
The resulting facility handover process is equally as disjointed and misaligned with facility owner/manager needs. Owners are starting to realize that a lot is left on the table and they are missing out on opportunities to get more work delivered with more value, with better quality and better deliverables, with less waste, fewer resources, and in less time.
As a result, they are pushing their delivery teams to work more closely together in order to deliver more value. Considering that 75% or more of the total cost of ownership of facilities is attributed to activities after design and construction, that should clearly be the focus for operational efficiency improvement to make the most impact. However, the ability to make cost impact drastically declines throughout the design and construction phase. We as the leaders of our industry have not only an opportunity, but almost a responsibility to maximize resources and bring more value to our clients by helping them reduce their TCO when it matters the most.
Defining the Problem
Before creating a solution to any problem, we must first have a clear definition of exactly what it is that we are trying to solve. There are many challenges in our industry, and it is all too easy to lose focus without clear goals.
Most Important Question: Why?
Most successful digital transformation initiatives have one thing in common: they target improvements that align with the core why their organization exists to begin with. After developing a clear current operational state as the baseline and the desirable future state as the goal, there must be a clear answer as to why that future state is desired, and that answer has to be aligned with the vision of the organization. If the proposed solutions don’t directly support the vision, they are either not important enough to warrant the painful organizational change management process described below, or not the right solutions to begin with.
Developing a Strategy
After determining that the proposed solutions are aligned with the organization’s vision and important enough to consider implementing, an appropriate implementation strategy must be developed. Who will support and lead this change? What are the next tangible steps? When is the right time to implement? How are you going to accomplish this and measure success? Answers to those questions will drive the core of a successful implementation road map that aligns investments, intelligence, and quantifiable outcomes with current and future business needs and goals.
More often than not, an appetite for digital transformation starts with a glimpse of a potential end product. Someone identifies a new piece of software, new functionality, or a new buzzword or buzz concept like digital twin, and they start digging deeper into following the latest trend, as they feel behind. Unfortunately, there are a lot of siloed solutions in the ecosystem that allow business owners to pick and choose what they want without thinking about the holistic impact to the entire organization, or how that solution supports the vision of their organization.
Simply creating and implementing solutions, without enabling the organization to standardize the affected operational processes and establishing protocols for the analysis and integration of data they will be receiving, will ultimately lead to overall failure of the original intent to create significant operational improvements. This will also likely cost more money due to wasting resources on creating something they aren’t ready to use yet.
Process. People. Technology.
A staggering 70% of all digital transformation initiatives fail. Most of them fail due to one or more of the following reasons:
- They haven’t identified the correct stakeholders they need support from.
- They attempt to do too much, too fast.
- They focused on technology first (or even worse, only technology).
All successful digital transformation initiatives will identify the enablers, the blockers, and the decision makers as stakeholders that have the ability to impact the desired future state. Appropriate strategies must be developed to engage all of the stakeholders to assure transformation success. That is why a strong focus on people and process is critically important before considering leveraging any technology to drive change. It is a common pitfall to focus on technology first and start massive implementations of software and solutions that the organization is simply not ready for, ultimately leading to low adoption rates, tremendous waste of resources, and reverting back to the previous state that somewhat worked.
Any new solution inside an organization that has established ways of how they do certain things will cause significant impact and negative disruption at first. Unfortunately, most of us are creatures of habit and we don’t like to change. In order for change to be successful, a majority of those affected need to be dissatisfied with how they currently operate for one reason or another. There must be a clear vision of what is possible that may remedy that dissatisfaction, and they must be given manageable first steps toward a better future state. If the product of those three driving factors is greater than the resistance to change, you have a great potential for successful change implementation.
One of the first steps toward change implementation is to identify the organization’s readiness to adopt change, in order to identify the appropriate level of change from one state to another. A common pitfall is moving too fast and attempting to skip steps along the way. A common way to assess readiness is through a Digital Maturity Assessment that should help in identifying the current state versus desired state as well as the development of the next incremental steps of the implementation road map.
One of the best practices to achieve successful change implementation is to break down the total scope of work into small, clear, and manageable tasks that support the overall digital transformation, when combined. After identifying the current state and the incremental future state of one of those tasks, the change implementation process can begin. This should ideally be an iterative sprint process in which the key stakeholders are first discovering how they currently operate, then brainstorming better ways to do it (proposing, executing, and implementing incremental solutions), followed by evaluating whether the achieved outcomes align with their initial expectations. As this is an iterative process, the new and improved incremental state becomes the current state, subject to the exact same process until the initial expectations are met. After all tasks undergo this same process, the change implementation process should be well underway.
Putting Your Data to Use
Depending on what type of organization is undergoing the digital transformation journey, there will be numerous different ways to leverage the solutions implemented. At the very core, solutions should provide uniform and centralized access to normalized data. The focus is on establishing a clear Common Data Environment (CDE) and using standard tools and workflows to achieve whichever goals are imperative to the organization. Some of those goals may be accessing and visualizing the right data at the right time for the right reason. Others may entail simulating different scenarios, informing optimal ways to do something, or having real-time access to monitor and modify critical assets.
Regardless of what those success goals are, it is critical to predefine KPIs that define success, then develop ways to gather and analyze performance data to evaluate them. Based on the data gathered, you should be able to not only inform your future actions, but also predict and prescribe the desired outcomes that will drive your actions, as well as develop improvements based on those potential outcomes.
Platform versus Product
Transformative solutions will almost always offer more than one opportunity to leverage the same centralized subset of data. Consider an iPhone. What if it only had the built-in applications that Apple decided we need? It would be just another cell phone. But because it has access to the App Store, the value of the iPhone exponentially increases. It is a platform, not just a product. In the same way, the CDE and solutions you are proposing should be connected and capable of being leveraged for a number of different use cases, and by various types of end users centered around your organization. Only then are those solutions going to provide the most current and future value to your organization, and be worthy of undergoing the difficult change implementation and management process described above.
In summary, a successful digital transformation journey is a complex activity that requires an appropriate mix of strategy, planning, resources, patience, support, education, and discipline. Failure to identify the correct blend of those requirements or skipping important steps along the journey will inevitably lead to catastrophic failure and wasted resources, which has the potential to damage an organization beyond recovery. In contrast, a successful journey will yield a new and improved future state of a flourishing agile organization that is well on its way to establishing itself as a market leader, attracting new talent and expertise, and disrupting the industry with its transformed take on the business they used to be in.
The benefits of success most certainly outweigh the fear of failure. We have a responsibility to challenge what we do today and reinvent better ways to do it tomorrow. We can’t keep accepting the status quo because of fear of failure. We know we can do better, and we should lead the way towards the art of the possible and enable future value far beyond what we can achieve today.
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Marin Pastar is a registered architect and innovation and technology expert. He started his professional career nearly 20 years ago as a technical production architect and project manager. Through his personal practice and project experience, he realized how disjointed the design and construction industry is, and the vast amount of room for process improvement. As a result of his efforts to connect the AEC industry and improve his own projects, his career evolved towards technology and innovation. He is a strong advocate for owners, striving to eliminate the costly duplication of efforts in project execution.
Dr. Kadiyala is a vice president and senior technology fellow at Jacobs. He is currently serving as the global market director for digital. In this role, he provides leadership, direction, and oversight to services associated with Jacobs’ Digital Delivery, Geospatial, and Intelligent Systems solution areas. Over his 27-year career at Jacobs, Dr. Kadiyala has worked to plan and implement information and security system solutions across the globe. He has also focused on real-time sensing, machine learning, digital twins, control, and analytics for operational optimization. Many of his current efforts are centered on the development of advanced visualization solutions to provide insight into the overwhelming amount of data generated daily. Before joining Jacobs, Dr. Kadiyala worked in the aerospace industry and industrial process control space as a development engineer.