DESIGN & PLANNING
According to EY Construction and Real Estate Advisor Eric Ottinger, the design and planning phase accounts for 7% — 12% of the total cost of a construction project. (10)
Digital design involves primarily architects and engineers, and obviously, asset owners. Some innovation in this space takes care of turning photos and sketches into CAD models (Computer Aided Design) and BIMs (Building Information Models, a technology that allows planners to visualise the building’s project in 3D).
The UK is actually one of the world’s leaders in BIM usage, mainly down to government initiatives, which made it mandatory across all centrally procured construction projects; Germany is working towards similar regulation to come into effect at the end of 2020. The adoption and perception of BIM is also increasing across the industry, with ‘aware and currently using’ jumping from 13% to 62% in only 6 years. (11) While BIM isn’t mandatory across the US, much of the Federal Government is moving towards requiring BIM on most types of building projects. Wisconsin and Texas are among the early adopters of BIM standards across the board. Other countries are following similar trajectories (France, Sweden, Norway, Finland, etc).
Overall, more people are using BIM than not. Between 91% and 100% of MEPs (mechanics, engineers and plumbers) and structural engineers have adopted it, and 60% of contractors and site workers. (12)
However, the BIM model is far less helpful if it stays with the architect in a data silo, which is why it’s important to have interoperability of data collected throughout the construction process and matched back to the planning phase. The BIM model also needs labelling in order to connect with the project schedule — which does not happen often or is a very manual process.
Innovation in this space is reflected in the use of different digital tools to gather data in the first place, such as drones, LiDAR scans, VR sets, geospatial technology, photos and videos, and in the software used to present this data in a readily accessible formats, such as 3D models, CAD files and BIMs.
Traditionally, the construction industry would spend a considerable amount of time preparing models that were subject to human error: now, this phase can be completed in a matter of days with a higher accuracy through use of software solutions. Some solutions go even earlier in the process to the discovery phase, with AI tools like Continuum advising on the best spots for development.
Interesting companies to watch: Airworks, Continuum, Higharc, Spacemaker
BUDGETING & ESTIMATING
A good budgeting tool is essential for the industry, where projects can often range from few hundred thousand to hundreds of millions of dollars. Recently, there has been innovation that automates and improves the accuracy of bid estimates.
Innovation in this space can offer better predictive cost estimation for builders, while also monitoring real-time budgets and costs throughout the project. This will ultimately offer better transparency to both buyers and contractors.
It’s worth highlighting that many project management tools covered later on also cover budgeting, hence this type of solution often covers more than the initial budgeting phase.
Interesting companies to watch: BidBox, Smartbeam, Nomitech
Scheduling is essential in order to manage collaboration and scheduling of tasks among the different stakeholders in a construction project. The construction industry is characterised by geographical dispersion and a fragmented value chain, making scheduling tasks — while factoring in various moving parts — very difficult.
Timing is also key. For instance, ready-made concrete has only a small window in which it can be delivered and used by workers. Software that effectively improves scheduling improves time efficiency on a project, and significantly reduces the number of tasks and interactions required from a supervisor, reducing risks.
The software landscape in this space has mainly been dominated by Oracle Primavera, although new innovative start-ups are building on top of it to aid with decision-making and fill the missing links in the schedules.
Interesting companies to watch: nPlan, Nodes & Links, Grit Virtual
Integrated marketplaces are platforms for stakeholders to evaluate and contact partners, contractors and purchase materials. Construction projects require multiple stakeholders, therefore innovation in the space is mainly aimed at finding ways to connect and discover contractors, lenders and experts to facilitate the matching and training process.
Suppliers in the industry, especially if SMEs, have little opportunity to market their services to businesses or individuals and most contacts are obtained through word of mouth. Integrated marketplaces give them access to an efficient and continuous stream of work, as well as tools for invoice and contract management. On the demand side, it’s difficult for enterprises to acquire and retain talent in the long term and recruiting is typically outsourced to inefficient staffing agencies (or in the case of B2C marketplaces, to online searches).
Interesting companies to watch: Construyo, Buildstream, Pickr, Houzz, Made Renovation, Resi, Schüttflix
WORKFLOW COLLABORATION & PROJECT MANAGEMENT
Companies in this space have produced a range of products, from simple admin tools to sophisticated ERP software solutions. Communication in construction is key: however, the different stakeholders in a project are usually geographically disperse, so coordinating them can be an incredibly time-consuming task.
Project management platforms allow for asynchronous communication among stakeholders, enabling them to plan tasks across digital multi-platforms, and execute cloud-based collaboration between teams on and off site. Most innovators in this space handle task allocation, digital documentation and communication processes, but some innovation is happening on the payment side of projects too, bridging the gap between progress tracking and finances, or allowing a more friction-less relationship between lenders and project managers.
Construction-specific CRMs might offer add-on built-in services, such as integration with construction marketplaces and bid management systems. Smartphone proliferation on site accelerated innovation in this vertical, making uploading and accessing documents much easier: hence, the category is larger and more mature than others.
Interesting companies to watch: Procore, PlanGrid (acquired by Autodesk $875m), Corrux.io, PlanRadar, 3drepo, Alasco (Operating systems) / BuyChain (Sales acceleration tools) / Followup CRM (CRMs) / Rabbet, Levelset (Construction Fintech)
MARKET INTELLIGENCE & DATA ANALYTICS
This vertical looks at gathering and analysing information related to the construction market. As the industry becomes more regulated, digitised and data-based, market intelligence data on competitors, trends, government policies and analytics is becoming increasingly critical. Most companies in this category were not founded solely for the construction industry but have since built arms dedicated to the sector. Companies in this space feature CRM and dashboard integrations.
Most workflow collaboration tools claim to be able to apply data science to the data they own. These claims are not always accurate, as disparate data formats influence the reliability of this kind of analysis. Some of these data points should feed back into the project — although, that’s not always possible as stakeholders sometimes struggle to communicate efficiently.
Interesting companies to watch: Curate Solutions, Dodge Data & Analytics, DocuNordic
PROCUREMENT & SUPPLY CHAIN
Identifying and tracking materials across the supply chain helps to adhere to environmental regulations, as well as manage stock and inventory. The construction industry is responsible for 11% of global CO2 emissions, so becoming more sustainable is key for the industry. Environmental mistakes can also result in claims that can heavily affect a company’s cashflow and reputation.
Companies in this space are focusing on making sure that the right materials are being used and highlighting any environmental risks a company might be running. Material management innovation is also strictly linked to interconnecting the different players involved in a project, as well as giving the construction company insight and data on their suppliers to inform better decisions.
Interesting companies to watch: QualisFlow, Agora, Samson Logic, Manufacton
TRACKING & FIELD PRODUCTIVITY
This vertical looks at tracking projects by fostering digital collaboration on site and off site and managing the overall construction project — with the aim of maximising field productivity and cost efficiency.
Construction productivity hasn’t improved for decades, due to disjointed and siloed processes as well as the uniqueness of each construction site. As outlined in Fed Nikolov’s post on the hidden barriers to innovation in construction, productivity is a great indicator of an industry’s technological progress. Throughout the 2000s, output per employee in the construction industry in the US actually declined.