Buildings: Australia’s next platform for digital transformation
Recently CEO Emma Hendry was on a panel with other industry leading experts discussing digital innovation and adoption in the built-form industry. Read below the highlights from Emma’s discussion.
On average the construction industry only allocates 1% of its revenue to IT investment; compared to other industries, such as Automotive who on average are spending up to 5% – thus, it is paramount for us to really look at the current state of our industry and take a whole-of-life approach to our strategic planning and operations. We’re at the precipice of buildings being the next platform for digital transformation in Australia and we need to appreciate how we can leverage this to allow us to tackle the different challenges that we are currently facing.
In realising the benefits of investing in IT and a digitisation strategy, we can understand how data and technology can be utilised to have a positive impact – not just on you or your performance, but that of your fellow ecosystem stakeholders also.
..We are really lagging behind our counterparts in other sectors (by up to 20 years in some instances). But what we must appreciate is the great opportunity that this has afforded us. Recently, we have seen an increasing number of Venture Capital firms around the world entering the PropTech sector and the wider industry, so the time is now for us to capitalise on this influx of attention. We are front and centre on the world-wide stage and it is time to perform.
.. the best part is that a few years ago our success may have been a lot harder to achieve. The democratisation of technology, now allows for easier access to key skills, technology and a reduction in cost – this has presented us a speedier road to transformation. Traditionally our industry has found it hard to invest for the longer term, due to slim margins being widespread; and although this issue is still prevalent today – our clients, who are at the forefront of technological advancement and digitalisation in their industries, are now demanding change from our ‘business as usual operations’. We are now talking about a very different value proposition to what was the norm of yesteryear. Companies that aren’t investing today in their digital transformation, will shortly begin to suffer and lag behind the rest of the industry (and eventually become obsolete).
It is estimated that the SmartCities industry will be worth over two trillion-dollars by the year 2025. This is extremely aggressive growth, in such a short span of time, and we need to ride this wave to benefit our industry and its performance. Australia’s current building stock is between 15 and 20 million and new construction only equates to approximately 2%, this figure also equals the reduction in current emissions. Therefore, to achieve our zero emissions target, emphasis must also be placed upon retrofitting existing buildings.
So, the question that was posed to this panel, is it feasible for the health of our world and our commitment to our environmental targets to be the single and only driver? Well, past precedent has dictated no. However, what we can do is integrate it as a KPI – we must change our conversation on this matter and begin to restructure our understanding of the environment as a diminishing finite resource with fundamental profit implications…
…We need to approach this problem holistically. It needs to be front and centre of governmental policy; factored into budgets and to become a top line agenda point for everyone.
In the built form advisory space, we’re seeing that the end-user requirements are the key driving force for change. It is important to take into account the differing needs of owners, managers and occupants and the concurrent solutions that can be implemented. Coming back to the panels question regarding how the differing generations in the workplace are impacting upon current requirements and culture: The younger generations coming through the workforce are increasingly aware of our carbon footprint and it’s implications and they are demanding new approaches to their employer’s operations and work life. Therefore, the intersection between these evolving demands, the green agenda and SmartCities offers unique opportunities. A buzzword of the moment, the IoT, and it’s use, is a prime example. The use of sensors within buildings (making them smart-buildings) – have significant benefits to energy consumption and ratings through the optimisation of lighting and temperature control. In addition, this technology allows us to integrate data and deliver analytical insights from how we are utilising and interacting with the built-form. Are we still requiring large auditoriums? Are as many carparks needed? What is the correlation between collaboration spaces and innovation?
The power of information gathered through IoT is multiplied when applied to second and third-party stakeholder needs. When parties can view data in real-time, this then becomes the facilitator for optimising the whole built-form environment.
Cities equate to 80% of global GDP, congestion currently detracts between 2-4% of city-based GDP. Have a think about how much of an impact congestion is having not only on your bottom-line, but on pollution, your stress levels, and your health.
When ROI (return on investment) is a limiting factor for the introduction of technology, it is important to note how much easier the numbers begin to stake up when we take into consideration the benefits to the entire built-form ecosystem. For example, perhaps only one contractor needs to turn up to site, as oppose to 10. The benefits of more accurate and timely decisions being made are based on hard-facts and in real-time. It’s a long-term game, with short-term requirements.
As a built-form advisory firm we have the privilege of spanning the whole-of-life; from concept & design phase, through construction phases, and right through to the operating & maintenance phases of a building. It has been interesting to see the progression in BIM adoption recently, particularly when you’re dealing with firms who have exposure to overseas markets – where BIM is the norm in design today. It is also vitally important to consider how we are able to compare ‘apples-to-apples’ when managing portfolios of new and existing buildings and how other forms of technology, such as collaboration virtual spaces and 360-degree imagery (and 3D models) can be utilised to simulate a ‘BIM-like’ experience.
Through our digitisation strategy & implementation, we really looked at the requirements of the end user and client in totality; whether they were a builder, maintenance contractor, facility manager, owner, occupier etc., as well as the complementary data-sets that they all require. One of our aims for our clients, when BIM is not available, has been to implement a process that mimics the benefits of a BIM journey. This means, allowing for more collaboration between parties and greater levels of detail and data. Using our approach, our clients can interrogate what is happening across their entire portfolio and projects.
It is important to highlight the need to understand the end user – that is to understand their experiences and pains – then apply the right innovation and technology to alleviate their issues and optimise resources. Technology for technology sake is redundant and just becomes another cost burden to an already costly process, if not applied in an intelligent way. Done well, the gains are not just for the long-term, but can be realised from the outset.
Outside of you and your work and your organisation what would be your assumption on percentage split between those who adopt BIM and those who don’t, industry wide?
It is quite low at the moment, which is seemingly surprising as it has been around for a while now and it is building up momentum in other countries, such as the UK. However, it must be noted that BIM is only one subset of digitalisation of our industry. Value should also be derived from delivering integrated services through other technology and digital means.
Another limiting factor has been some regulations, codes and standards that have not caught up with current technology, trends and market requirements. Therefore, as a statutory compliance company we use a hybrid-model to bridge that gap – to give our clients and their stakeholders a completely digitalised service, whilst still providing them with the required paper-based outputs.
..Consequently, it is vital for us to lobby and put pressure on government and our regulatory bodies to review the codes and regulations that are negatively impacting on our industries progression..
On a brighter note, it is great to see new opportunities being created from this digital platform, with Hendry now delivering asset optimisation solutions. This facilitates owners, occupiers and managers to understand and ascertain their built-form digital and operating needs (where they are now and the road-map to the future). It comes down to the core of strategic planning and decision making; to future-proof not just themselves, but contributing to building a more safe and sustainable future. The road forward must include a successful digital strategy and its subsequent implementation. This allows all to benefit from the SmartCities movement, including the IoT, advanced analytics, and numerous other new technologies.
It is time for all the entire built-form ecosystem to join forces together and approach our future as a community.
Fundamentally, I believe that we need to be pushing for a mind shift change on how we value and classify buildings. All factors, including risk and compliance (E.g. wall cladding issues that are dramatically impacting us today), energy and environmental measures, total operating costs etc. should be factored into our classification of buildings and its value. This movement has begun, we are seeing the convergence of government and industry on these matters, and we no longer need to be running in parallel. However, this agenda also needs to be pushed to the forefront to mandate a financial bearing upon industry to enable safer, healthier and more sustainable futures for the built-form.
Without a doubt, buildings are the new platform for digital transformation and innovation!