Harnessing the digital transformation for construction claims

Posted 26 Aug 2020

The construction sector is one of the least digitised industries in the world1 and stands to benefit greatly from the data revolution. Research suggests that by better exploiting the value of data, the construction industry could realise productivity gains of 14 to 15 percent and cost reductions of 4 to 6 percent2. So why does the industry appear so reluctant to adopt new digital technologies when the benefits are clear? 

A recent report by McKinsey & Company2 highlights some of the characteristics of the construction sector that have contributed to it languishing at the bottom of the digital league tables. These include multiple subcontractors and suppliers working across diverse projects with little incentive to invest time in different digital tools for each job. Projects also vary widely in scope, timescale and type of construction, whilst R&D budgets tend to be limited and work often takes place in remote and difficult environments2. These factors contribute to managers in construction working with sub-optimal data tools and legacy software that is time-consuming, prone to errors and fails to deliver the right information at the right time. These problems become especially acute on a construction site when a delay or disruption occurs and accurate information is required to support a case for loss or expense.

In an ideal world, construction data would be collected to agreed standards and frameworks3,4.  There is still, however, scope for creating detailed and accessible analyses from limited data through the application of new tools and methods. Data preparation can be the most time-intensive part of an analysis but recent advances in data preparation software, such as Alteryx and Tableau Prep, streamline this process. These new approaches and digital tools can transform how we work in construction and present few technical barriers to their use. With the right knowledge, information can be organised across systems with ease, and key information delivered in comprehensive, simple visualisations. 

In an industry where claims can range from thousands to millions of pounds, being able to drill down into the detail of why delay and disruption occurs, and how it affects costs, can make a significant difference to the outcomes of a claim.

Using data commonly held by construction project teams, simple models can be built to explore the cost implications of these disruptions. Once built, the additional complexities of each claim can be added to the model to further support a claim. 

Understanding how data in construction is used also allows us to improve and inform how on-site data is collected, enabling its analysis to be as rapid and straight-forward as possible. 

One benefit of the construction sector being at an early stage in its digital transformation is that we have the opportunity to work across the industry to capitalise on its impact. We at 53Quantum are proud to be pioneers in data-driven construction claims and to be leading the way in this vibrant and competitive industry.

  1. McKinsey Global Institute (2017) Reinventing construction through a productivity revolution: https://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/reinventing-construction-through-a-productivity-revolution
  2. McKinsey and Company (2019) Decoding digital transformation in construction: https://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/decoding-digital-transformation-in-construction
  3. RICS data standards: https://www.rics.org/uk/upholding-professional-standards/sector-standards/construction/rics-data-standards/
  4. Open Data Institute (2020) Case study: Creating a standard to help people find construction knowledge: https://theodi.org/article/case-study-creating-a-standard-to-help-people-find-construction-knowledge/