How can the engineering and construction industry overcome fragmentation, external competition and inconsistent performance by reimagining its approach to governance, people and technology?
That is the question posed by KPMG in their Make it or Break it global construction survey.
Over the past decades, owners and contractors have made considerable strides in improving the delivery of capital projects. We’ve seen a host of advances in the form of new construction techniques, project delivery strategies, and enhanced processes and controls for safety, risk management, budget, scope and schedule.
70% track project performance based on original approved baseline project schedule and budget.
60% hold routine project review meetings with management, which trigger additional reviews — and if necessary, intervention — for any issues that could impair project performance.
47% say their organisations have separate systems for project reporting, yet a mere 8 percent have what they call “push one button, real-time, full project management information system (PMIS), capable of project and portfolio dashboard reporting.
31% report that their companies do have integrated systems for project reporting, which means that most project managers lack the capability to control all elements of the work.
30% claim to incorporate performance targets into all of their contracts, with a further 52% including targets on “some” of their contracts.
Schedule is ranked as the number one performance measure, followed by cost/cost sharing. Contract performance measures for output/ production, safety, subcontracting and schedule ranked considerably lower
40% of employees are Gen X and 37% are Millennials.
86% say that the “human element” significantly influences project delivery.
What are engineering and construction firms and project owners actually doing to optimise the human element?
As Baby Boomers approach retirement, new generations of workers are taking their place. According to the professionals participating in the global survey:
23% of their workforces are comprised of Baby Boomers (born 1945–1964)
40% of Generation X (born 1965–1979)
37% of Millennials (born 1980–1994).
What are the implications of this generational shift — especially for Millennials who’ve grown up in the digital age and, additionally, don’t always have the nurturing hand of Baby Boomers around their shoulders to help them learn the tricks of the trade?
Giving younger employees the skills, experience and confidence to manage major projects — and managing and motivating them in an appropriate manner is one of the most important tasks facing the sector. It’s also broadly the case that the younger the worker, the greater their digital skills and confidence. Millennials are attracted
by technology, and engineering and construction companies should recognise that investing in a digital workplace could increase their ability to attract and enthuse this demographic.
With exciting innovations like robotics, automation and drones, and powerful data analytics to improve design and project management, engineering and construction would seem to be a perfect stage for showcasing the technological revolution.
55% feel the industry is ripe for disruption
95% think technology/innovation will significantly change their business
74% believe such a change will happen in less than 5 years.
72% say that technology innovation or use of data plays a prominent role in their strategic plan or vision.
Which regions and industries are pioneering the adoption of technology? Our survey responses reveal some fascinating findings. For example, China appears to be leading the pack when it comes to advanced data and analytics and building information modeling, and shares top place with the UK for use of mobile platforms. Owners and contractors from the UK, meanwhile, are the most likely to be employing drones and virtual reality.
Despite a small improvement over the past 12 months, 57% of respondents to this year’s survey still consider themselves to be “followers” or “behind the curve”, and the proportion that view their organisations as “cutting edge” remains at 5%.
Robotic process automation and/or digital labor have a particularly exciting potential and are taking off in many other industries, with machines and computers replacing humans. Once again, engineering and construction lags behind.
83% say their organisation has not yet implemented such technologies, with most expecting a wait of 5 years or more before they become more common
John Herzog – Managing Director, Major Projects Advisory KPMG in the US says: The engineering and construction industry is no stranger to disruption. Over the last few decades we’ve seen the introduction of numerous new technologies, from fax machines to PCs, cell phones to email, and of course, internet to 3-D computer-aided design. Everyone in the industry should be making better use of the vast amounts of data collectedon construction sites. The respondents to this survey appear to have digital strategies, but it seems that many still need to further advance their digital/data road maps. I’m highly optimistic that, by following some or all of these recommendations, the industry can finally start to reap the huge benefits of the digital revolution.
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