The brave new world of BIM, "megatrends" and digitalisation: is the construction industry ready?

By Marko Misko, Kath Hallpike

21 Jun 2018

A recent report by the World Economic Forum and the Boston Consulting Group suggests that the construction sector is lagging behind other industries in embracing technologies of the "Fourth Industrial Revolution" and can no longer afford to do so.

As described in "Shaping the Future of Construction: Future Scenarios and Implications for the Industry", a report published by the World Economic Forum and Boston Consulting Group on 5 June 2018 (Report), the construction and engineering (C&E) sector is one of stagnating productivity, mired in traditional "business models, strategies and capabilities" that leave it ill equipped to adapt to emerging trends that will impact and transform the industry. The Report is a call to arms to industry participants, urging them to "think strategically about the future and take preparatory steps" to assimilate anticipated disruption to their businesses.

The implications of potential future scenarios on the construction and engineering sector

After consultation with industry leaders and representatives from government and academia, the Report's authors describe three "extreme yet plausible versions of the future" and consider the implications of each on the C&E sector. The scenarios contemplate an environment transformed not only by such global trends as climate change, resource depletion and increased urbanisation, but also digital technologies such as building information modelling (BIM), automatization and robotics, 3D printing and prefabrication.

The "Building in a Virtual world" scenario, for instance, is one in which design and engineering is driven by AI based on "customer requirements, key performance indicators and crowdsourced ideas", with little human intervention. Information derived from BIM models enables autonomous equipment to perform most work currently performed manually and O&M tasks are supplanted by data sourced from sensors embedded in assets. This version of the future sees the ascendancy of software providers and the dislocation of conventional stakeholders in the value chain.

Alternate scenarios contemplate:

  • the widespread adoption of prefabrication and mass customization, shifting the focus from building to manufacturing and thus exposing incumbents to competition from that sector; and
  • demand for renewable energy, innovative technologies and materials that minimise environmental impacts.

By delineating these potential "new realities", the Report aims to provide stakeholders with an understanding of the "differing ways present trends can play out", and so as to prepare for them. Common to each of the scenarios are three key "transformation imperatives":

  • building an appropriately skilled workforce, relevantly one with expertise in AI, data analytics and programming;
  • the uptake of digital technologies; and
  • increasing collaboration and integration, for instance by use of more integrated contract models.

The Report should give renewed impetus to consideration of the question, is Australia keeping up with global best practices when it comes to contractual frameworks and the uptake of digital technologies?

BIM adoption in Australia

Notwithstanding its acknowledged benefits, BIM adoption in the Australian C&E industry has been sporadic and episodic. Moreover as is noted in the Report, existing BIM applications predominantly "cover only design, engineering and construction activities, and have not significantly changed operation and maintenance processes". At present they mostly "address just one phase of an asset’s life rather than functioning as a comprehensive application over an asset’s entire life."

A further collaboration between the World Economic Forum and Boston Consulting Group published in February 2018, "An Action Plan to Accelerate Building Information Modeling (BIM) Adoption", identifies obstacles to BIM adoption together with some 27 recommended actions to drive its implementation. Key among them is the proposition that:

"…governments must make a long-term commitment to the technology by piloting it in public works projects and creating regulations conducive to its acceptance, including backing innovative forms of financing".

This lacuna is echoed in the Australian market, where historically there has been a palpable absence of strong leadership impelling BIM adoption. This is despite some very clear policy guidance on the issue, such as the 2014 Public Infrastructure Productivity Commission Inquiry Report (Vol 2 No 71) which recommended that the government should use BIM to lower the cost of delivering its complex infrastructure projects, and that governments (at the national, state and territory levels) should develop a common set of standards and protocols to facilitate the consistent use of BIM by the public sector and include in their procurement guidelines detailed advice as to its efficient use. Subsequently in 2016, Infrastructure Australia's "Australian Infrastructure Plan: Priorities and reforms for our nation's future" recommended that governments make the use of BIM mandatory for the design of large-scale complex infrastructure projects.  

Formal systems facilitating BIM uptake are similarly endorsed in the Action Plan. It notes that the use of BIM is mandated on UK government sponsored projects, and points to the UK government’s Construction Industry Council's "(CIC) BIM Protocol" which "requires deliverables to be created for specific project stages and outlines stakeholders’ BIM-related obligations, liabilities and limitations." Despite BIM's potential myriad advantages, such a strong government mandate as now exists in the UK remains lacking in Australia.

Focus on collaboration

Paramount to increasing the use of BIM technology is collaboration, according to the Action Plan. To this end it advocates the use of integrated contracts and the redefinition of risk-return mechanisms, relevantly to amortise the cost investment incurred in creating BIM models predominantly in the initial design and engineering phase more equitably over the project life cycle.

Traditional standard contracting models that compartmentalise stakeholder contributions are not conducive to harnessing and maximising the benefits that BIM can yield. More optimal delivery models for the utilisation of BIM are those based on relational contract theory, that emphasise collaboration and recognise the interdependence of different parties in the value chain. For this reason, the Action Plan advocates, for example, greater use of integrated project delivery (IPD) contracts.

What does this mean for the Australian C&E sector? There is a nascent sense that a paradigmatic change is afoot, that the days of familiarity-generated inertia identified by the authors of a 2014 Melbourne Law School and Society of Construction Law Australia report are numbered. There are encouraging signs that the much needed national leadership required to ensure that BIM reaches its full potential within the Australian construction industry is emerging, for example the resurgence of collaborative contracting delivery models (such as the forthcoming 2018 release of the new the Department of Defence IPD suite), the co-ordinated initiatives now being driven by the Australasian BIM Advisory Board established in May 2017 and the Australian Government's call for submissions for the Australian Government's Digital Economy Strategy.

Being able to adapt to and participate in an innovation driven industry will be imperative for players in the C&E sector. The Report should serve as a fascinating and compelling "wake up call" to industry stakeholders to prepare for that inevitable disruption.

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