Exploring the Future of AEC Industry, digital Transformation between the Past and the Future

The Architectural, Engineering, and Construction (AEC) industry plays an important role in the development and economic growth of any country. It erects schools, universities, buildings, industrial structures, and infrastructure facilities, etc. which are the basis for human social and economic systems. AEC is the biggest industry in the world with 13% percent of global GDP xvii .

Nevertheless, the industry has one of the lowest productivity rates and its projects suffer from cost and time overrun. Figure 1 below shows that 98% of the megaprojects face cost overruns or delays xviii . The average cost increase is 80% of original value and the average slippage is 20 months behind original schedule.

Figure 1:cost overruns or delays of megaprojects 2

Stakeholders working in the industry have produced many studies and articles on this matter which indicate several factors that may cause this issue. While some of them see the complexity associated with AEC industry as a major reason for its cost overrun and delays, others like Lean Construction scholars, refers to the wastes produced across the construction process as the prime reason. This short paper will not discuss these factors in detail, but it is worth highlighting an example by Sir John Egan

“Rethinking Construction –The Egan Report” as a good example xix .

One of the most important solutions that have been proposed in recent years to develop our industry is via “Digital Transformation”, which has been defined as “the digital transformation is a foundational change in an organization. Digital Transformation is the integration of digital technology into all areas of business, mainly changing how you operate and deliver value to customers” xx .

Many of the players in the AEC industry, however, are still confused and hesitant about the change and new technologies which might make it harder to develop a real digital strategy xxi , but few engineering and construction companies have captured the full benefit of digital xxii .

This paper outlines four factors and related barriers to achieve digital transformation in AEC industry (see Figure 2 below). However, it is important to recognise that these factors are related to each other and affect each other.

Figure 2: characteristics of digital transformation

The above factors, policy; process, people and technology, made the digital transformation process is part of a complex process and require companies to shift gradually according to their human and financial capabilities, in other words, they have the option to manoeuvre when, how and to what extent they would transfer themselves digitally.

The freedom of choice of digital transformation was occurring before the beginning of this year, i.e. before the crisis of Covid 19, which subsequently brought about fundamental changes in social and medical habits and greatly affected the various economic sectors. This changed the way they do business, and certainly will impact the way our industry will work going forward. The industry now must rethink the previous four factors and try to find the right process to develop them in a way that speeds up the extent of digital transformation in AEC industry (see Figure 2 below).

Figure 3:suggested changing characteristics

This transformation will significantly involve the professional services industry and engineers in leading development to set the good example for other partners and stakeholders of the AEC industry.

By Dr. Ahmed Stifi, Germany

Dr. Ahmed Stifi is a senior project manager at Codema in Germany, a subsidiary of Ingérop Group, a leading engineering consulting company in France. Ahmed hold a degree of MSc. in civil engineering from the Technical University of Darmstadt.

After 5 years of international work experience for CDM Smith on large-scale construction projects he became in 2012 a senior research associate and lecturer at the Institute of Technology and Management in Construction at the Karlsruhe Institute of Technology (KIT), where he received in 2017 his PhD degree in construction management with highest honors.

Ahmed is an active member of many engineering and international organizations. For example, he is a member of the Association of German Engineers, member of the German Lean Construction Institute and member of the FIDIC Integrity Management Committee.