Construction firms will focus on standardizing prefabrication materials and processes as builds become more complex in 2021, Kenny Ingram writes. Other trends to watch include a growing emphasis on total asset lifecycle responsibility and the use of enterprise resource planning software alongside building information modeling.
With the number of construction projects dwindling as a result of the pandemic, many companies are reimagining their business models to secure their future.
While how to increase productivity remains one of the major hurdles that the industry needs to overcome, construction and engineering companies must also look to servitization to attract new business. Even if it may appear to some as a question of identity, the provision of service will in reality be a question of survival for many businesses.
Even though the outlook is harsh, there is evidence that many companies are using the current lull to arm themselves with tools that will enable them to hit the ground running when the tide turns. In fact, a recent IFS study revealed that 70 percent of businesses have increased or maintained digital transformation spend, despite the Covid-19 pandemic. In the engineering, construction and infrastructure sector, this figure is more than 75 percent.
Given the unpredictability of 2020, we are facing a new year whose challenges and opportunities are equally difficult to pin down. Despite the uncertainties, however, I have summarized a few trends that I believe will color 2021 and beyond:
1. Service turns cornerstone as builders approach total asset lifecycle responsibility
As a result of the disruptions of 2020, the construction industry is intensifying its focus on securing stable and robust revenue streams. This has led many companies to transform themselves from traditional construction companies to asset lifecycle service providers, able to provide through-life service, facilities management, and maintenance to their clients.
The upshot is a strengthened emphasis on total lifecycle cost rather than the traditional, one-and-done build cost. One of the major implications is the profound shift in focus among the companies building the assets. As they will be increasingly expected to assume cradle-to-grave service responsibility for each asset they build, they will need to focus on asset quality, longevity, and ease of maintenance. Put more provocatively, now that the asset is the construction company’s problem, it will need to be designed for quick and easy repair and maintenance.