How analytics can drive smarter engineering and construction decision
The construction business faces a major productivity challenge. While labor productivity in the global economy has increased by an average of 2.8 % a year over the past two decades, and in manufacturing by an impressive 3.6 %, the construction sector has registered a mere 1 percent annual improvement. As the capital-project partners responsible for execution, engineering and construction (E&C) firms are well positioned to drive changes that can help close this troubling gap.
To do so, some are turning to data-driven solutions that have already revolutionized many other corners of the economy. These techniques are emerging as vital tools for improving capital project outcomes and reducing risk. By enabling E&C companies to leverage the vast amounts of data they already collect, analytics can uncover critical insights that both speed up and improve the quality of management decisions. In particular, they can help project teams assess market conditions, portfolio composition, and individual project performance.
Admittedly, adopting analytics tools may pose challenges for project-driven businesses in the construction sector. Unlike manufacturers, for example, which tend to follow predictable and repeatable processes, E&C firms face high variability. Progress-tracking systems sometimes change mid-project, causing incompatibilities and inconsistencies in the collected data. Parameters such as scale, materials, and subcontractors involved also vary significantly from project to project, making it difficult to establish benchmarks.
The cultures and processes within E&C organizations can pose additional barriers. The industry tends to put trust in individual experience and expertise over empirics, and few companies have data analysts on staff who can take ownership of advanced analytics initiatives.
In time, predictive analytics, machine learning and artificial intelligence solutions will likely usher in bigger changes to the ways E&C firms bid on and deliver projects. For now, three applications illustrate how companies are beginning to embrace data solutions while establishing a foundation for more ambitious initiatives in the future.