On-Site 2020 Technology Report

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2020 TECHNOLOGY REPORT

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TECHNOLOGY REPORT

WELCOME LETTER

W

e are very pleased to be sponsoring On-Site Magazine’s Construction Technology Report. Autodesk is proud to be at the forefront of helping contractors adopt digital technology and move towards a whole lifecycle approach for the built environment.

We often experience waves of technology innovation come out of moments of challenge such as the one we find ourselves in today. With the sudden shift to remote work and new and increased safety standards, we now see many contractors accelerating their switch from analog to digital workflows to support their projects. A recent survey, which is an annual partnership between AGC and Autodesk, found that nearly 40 per cent of responding contractors have adopted new hardware or software, such as project management, field collaboration and bidding technology, in the wake of the pandemic crisis.

It’s a great time to start rethinking how we build at every stage, and for construction firms to invest in a robust digital foundation that connects teams, data and projects from design through to operations. A strong digital foundation will position us to solve the systemic problems the industry is still struggling to overcome, and will also empower you to take greater advantage of what’s coming next – automation through machine learning and AI, IoT technology, generative design, digital twins and so much more.

It’s exciting to hear about how many leading contractors are adapting and thriving in this new innovative environment. We look forward to helping many of you on this journey.

Sincerely, Allison Scott Director, Construction Thought Leadership at Autodesk

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TECHNOLOGY REPORT

STAYING AT THE REFRONT How Canada’s Top Contractors are preparing for the job sites of the future

BY DAVID KENNEDY

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F

ailing fast has become something of a mantra in the start-up scene. Making bold bets on risky new propositions and quickly finding success or failure defines the industry.

It is not a concept that lends itself particularly well to construction.

“We’re not encouraged culturally to fail fast, or fail at all, frankly,” says Chris Gower, COO of PCL Construction’s Buildings division. There’s good reason for the conservative mentality that pervades the industry, he adds, pointing to safety on-site and the need to deliver projects proven to last decades.

At the same time, Gower says builders need to find new ways to experiment – running into some inevitable fast failures

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TECHNOLOGY REPORT

“We’re not encouraged culturally to fail fast, or fail at all, frankly.”

– Chris Gower, PCL – to move the industry forward.

It is one in a range of insights from a panel hosted by On-Site this August.

Throughout the discussion, four industry experts shared how they have adapted their processes to better suit the digital age and detailed some of their plans for staying at the forefront as the industry evolves.

LAYING THE FOUNDATION The cloud is nothing new to most contractors. The migration to internet-linked systems has been underway for years, and recently, the COVID-19 pandemic has only accelerated the shift. For most, it is a starting point for wider technology adoption.

Yuri Bartzis, the Innovation Manager for

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Canadian Building Operations at Pomerleau, says many of the advantages revolve around communication.

“Having that common data environment really helps transfer information and communicate properly,” he says. “Version control is there – so everybody is up to date on the latest information to make the right decisions.”

Matt Gramblicka, vice-president of Information Technology & Enterprise Application at Graham Construction, agrees.

“Even something as simple as having plans on an iPad so that you’re having the latest version… there’s definitely a lot of advantages there,” he says.

Graham has already shifted a large

number of its systems to the cloud, but it is still working to integrate more of its processes.

At the same time, the cloud does have its limitations, Gramblicka says. “I don’t think all things lend themselves to the cloud,” he says, pointing to performance and connectivity challenges, particularly in remote areas.

Graham, Pomerleau and PCL are all working to tackle these sorts of network issues, turning to new advances in areas such as edge computing and 5G.

FINDING A BALANCE Even early adopters of new technologies caution against moving too fast too quickly.

At the same time, in a competitive market like construction, waiting too long can be even more costly.

“Technology is such a key component of innovation and in advancing important industry objectives like safety, productivity, risk reduction, cost reduction and inclusiv-

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ity,” says Mary Van Buren, president of the Canadian Construction Association (CCA).

With the ongoing workforce shortage facing the industry, technology also provides a way for more segments of the labour market to find a place in construction.

“When you look at heavy lifting that often has to be done, technology can help take off some of that load and reduce some of the wear and tear, so that more people can be included in the industry,” Van Buren says.

Contractors need to find a way to weigh the benefits and risks and establish an adoption path that works for them, Gower says.

“You’ll fail a lot. So, you have to balance being innovative, being on the edge, with doing what’s practical and sensi-

ble and what solves problems,” he says.

Graham has turned to a pilot strategy to test new technologies. Rolling out an innovation on a single job site first, Gramblicka says the company looks at the return on investment it would provide, among other metrics, before taking any next steps.

“That’s kind of our approach to things versus taking a big bang, we’re going to put this in everywhere, which is very challenging – trying to get 200, 300 project sites all using things the same way,” he says.

Likewise, Pomerleau’s innovation team attends conferences worldwide to keep track of new ways of working. It implements promising technologies on single projects first, tracking ROIs, as well as how easily the innovation fits into its every-evolving building method.

“The biggest sweet spot would be how

“The biggest sweet spot would be how easily the technology can get integrated into your existing workflow.”

– Yuri Bartzis, Pomerleau 44 / OCTOBER 2020

easily the technology can get integrated into your existing workflow,” Bartzis says.

One such example is an ongoing pilot of a new robotic dog known as Spot, which has been prowling one of the company’s job sites in the Montreal area since early this year.

Workers were leery of the autonomous robot at first, Bartzis noted, but soon accepted it like any other piece of new technology. “People are able to get comfortable with robotics and other technologies in the same work area,” he says, adding that he anticipates more pilots like it in the years to come.

AREAS TO FOCUS Robotics represent one opportunity for contractors, but unlike in manufacturing, where machines now take on a substantial portion of the work, construction robots still have limited applications. Builders are likely to glean the greatest benefit by reaching first for some lower hanging fruit.

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TECHNOLOGY REPORT

“Instead of adding to their plate one more thing that they have to do, it should be one or two things that we’re taking away.”

– Matt Gramblicka, Graham Graham, for instance, remains focused on implementing a wholly integrated solution across all of its job sites.

“Just having that consistency across the board so if a project manager or a superintendent needs to move to one site to the next, they’re not asking, ‘What technology are we using here?’ It’s, ‘What work needs to be done?’ and focussing on those types of things,” Gramblicka says.

The shift will clean up the company’s processes and create a consistent approach across hundreds of different sites, Gramblicka adds.

It is also designed to make on-site management simpler.

“Our industry hasn’t improved productivity-wise,” Gramblicka says. “So, adding technology to our project sites, it has to add that business value, it has to make the superintendent’s job easier. Instead of adding to their plate one more thing that they have to do, it should be one or two things that we’re taking away.”

Having developed a software package largely in-house PCL has recently focused a considerable portion of its resources on job site sensor technology to track things like weather, temperature, humidity and leaks.

“There’s so much data that we can collect and that we can become more efficient and effective as an industry,” Gower says. “We can mitigate risk and simply be better builders.”

Drawing on information directly from superintendents and project managers, sensors also offer excellent value for money, he says.

“Rather than someone running around suite to suite checking humidity to ensure the millwork doesn’t delaminate, we have sensors that provide immediate alerts when things are out of norm. This applies to so

many different things,” Gower says.

PCL is also working to use artificial intelligence to analyze the data from its array of sensors to identify hazards before they can cause damage or safety risks.

The wider implementation of building information modelling (BIM) is another key area of focus for contractors.

Bartzis says adoption remains hit and miss throughout the industry, but that around 70 per cent of the projects Pomerleau takes on now run off 3D models – though it fluctuates from year to year. A model is often created before the general contractor gets involved, but he says in some cases Pomerleau goes out of its way to create a BIM model to help its crews follow their typical processes.

“The methodology is making sure you have that usage of the 3D model from design straight through to operations and for the full life-cycle of the building,” he says.

For Bartzis and the other panelists, it is clear the building industry will eventually fully adopt BIM, but the transition may prove to be a slow one.

A TIPPING POINT It’s no secret the construction industry lags others in terms of tech adoption. The fragmentary nature of the industry and contracting models that revolve around minimizing spending are often seen as the culprits.

“Generally what we see on bids is it’s the low-cost that wins,” Van Buren says.

“That creates little to no room to take a

risk on innovation, or the owner already prescribes what it is they want.”

With general contractors and subs often unable to implement new innovations – technology, materials, or otherwise – without jeopardizing their bids, the CCA is pushing owners to take a more active role in advancing the industry. In particular, Van Buren says the organization is asking the federal government to build more room for new approaches when preparing contracts for major infrastructure projects. Instead of punishing innovators for taking risks, the aim would be to reward forward-thinkers, eventually raising the level of the entire industry.

Gower agrees, pointing to the ubiquity of LEED (Leadership in Energy and Environmental Design) standards – and the government being an early mover on adopting them – as an example.

“I think there’s a way to move the industry toward forcing us all to pay attention and therefore do it and therefore include the costs and let it be borne by the end users as it was with LEED,” he says.

With help from government and increasingly appealing returns on investment for both new software and equipment, construction’s slow shift toward technology represents both a challenge and an opportunity.

On a scale of one to 10 – with one meaning just starting out and 10 standing in for technology being fully adopted, panelists ranked the Canadian industry’s progress adopting technology between a two and six.

There is substantial work to be done, but starting from a low base, technology offers contractors ways to dramatically improve their operations and provides a rare opportunity to do more with less.

“It’s the low-cost that wins. That creates little to no room to take a risk on innovation, or the owner already prescribes what it is they want.”

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TECHNOLOGY REPORT

FIXING CONSTRUCTION’S

PAYMENT PROBLEM

Prompt payment promises to correct imbalances in the industry. It may also force general contractors to automate their payment processes

BY JACOB STOLLER

I

The action is in response to industry pressure to take on the late payment problem that has plagued the industry for decades. According to PWC’s 2019/20 Working Capital Report, the average time it took a contractor to get paid in 2018 was 83 days.

Prompt payment legislation will impose

some much needed payment standards and discourage unfair practices such as withholding excessive payments unjustifiably as a pressure tactic and putting cashflow pressure on the subcontractors.

“GCs have historically had a very heavy hand to get their way with subcontractors,” says Glen Anderson, vice-president of

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n October of last year, Ontario became the first Canadian jurisdiction to make prompt payment on construction projects legally mandatory. Other provinces are expected to follow, and a federal statute mandating prompt payment on federal government contracts has been approved and is awaiting ratification.

Prompt payment legislation came into force in Ontario last fall. Federal rules are incoming, but have been put on hold due to the COVID-19 pandemic.

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TECHNOLOGY REPORT

Finance and Administration for Buildings at Edmonton-based PCL Construction.

“To give you an example, a contractor may withhold a million dollar payment on a subcontractor for a $50,000 issue just to get their attention. But that creates immense cash flow issues, and can force smaller businesses into bankruptcy for unfair reasons. So prompt payment is really to add a degree of fairness to the treatment of subcontractors by generals, and also by owners.”

The topic is not an easy one for many in the industry. “There are a lot of people who don’t want to touch this subject,” says Jas Saraw, vice-president, Canada, at Procore, “because it provokes a lot of emotion for obvious reasons. It’s people’s livelihoods.”

As Saraw points out, late payment may not be intentional, but the result of inefficient and complex payment processes.

“With myriad stakeholders that you have in

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construction, it becomes very challenging to manage all of the relationships and the payment obligations,” he says.

The persistence of outdated processes compounds the problem. “Construction is a fairly traditional business with manual processes, manual workflows,” says Mike Milligan, director of Global Marketing for Portland, Oregon-based construction software provider GCPay, “so it’s pretty human capital intensive in terms of back office management.”

When the work piles up, the back office becomes a bottleneck. “If you’re a general contractor and you’re managing a $200 million project, you might have 150 subcontractors,” Milligan says. “So imagine the number of applications for payment you’re going to see over the course of that project. It gets very hard to manage, and that’s one of the reasons late payment is such a big issue.”

The existing and pending legislation

specifies time frames for payment or notification of dispute, and requires general contractors to keep an audit trail of all matters related to payments. This may well be the tipping point where contractors decide that manual processes are no longer viable.

The Canadian Construction Association’s president, Mary Van Buren, is confident technology vendors will step up.

“What we find,” Van Buren says, “is that when there’s new legislation or opportunities, then an ecosystem will form in the technology sector to help the contractors with their issues or opportunities.”

The CCA is developing courses to help contractors understand and comply with the legislation.

RECONSTRUCTING THE PAYMENT SYSTEM Payment software is a specialized product that is typically integrated with construction

Construction is a fairly traditional business with manual processes, manual workflows, so it’s pretty human capital intensive in terms of back office management.”

– Mike Milligan, GCPay

think every human has a challenge with change,” Anderson says, “and this is by far the biggest change in the invoicing process in construction ever. We’re going from each subcontractor having their own accounting system and running invoices at month end and what have you, and then scanning, faxing, emailing, depending on the technology of the day. Now they go online onto our platform and develop their invoice through an electronic application process.”

Anderson notes that online payment platforms are becoming more prevalent in other industries, and may well be becoming the new normal. “For a lot of our clients in the industrial world, we have to go online and do a similar type of process,” Anderson says. “So it’s becoming more common. But the construction industry usually lags quite a bit, at least in the accounting technology.”

While many general contractors will feel pressured to automate their payment processes in order to comply with the pending legislation, Anderson suggests that they choose their technology carefully.

“There’s certainly no shortage of technology that people can adopt,” he says, “and it changes so rapidly that if you’re going to make a commitment to technology, you want to make sure it’s going to be a lasting technology so that you’re not changing platforms every two years.”

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workflow and accounting platforms. One payment software vendor is GCPay, which provides a complete workflow environment for managing payments to subcontractors.

The software is a cloud-based system that provides a portal for subcontractors, who, instead of invoicing, access the portal to apply for payment.

“If I’m a subcontractor and I’ve completed a certain percentage of the work in a project,” Milligan says, “I can submit an application for payment for that work. It can be created, submitted, managed, and reported all online. It automates the whole process.”

An attractive feature of the software is that it manages lien waivers alongside payments, making it easy for a contractor to manage all aspects of the subcontractor relationship on a single platform. This is particularly important since Canadian legislation combines mandatory scheduling of payments with the legal adjudication process.

Payment, however, is not an isolated function, but one dependent on access to job site data to verify that the subcontractor has delivered according to contract. “A lot of things payment-wise will be tied to deliverables,” Saraw says. Contractors therefore need to have job management systems in place to capture and present this information. Obviously, this becomes more critical in case of a dispute.

PCL took on the payment automation issue 10 years ago when Anderson led a team that created PCL’s platform based on

an application called Textura. That product was subsequently purchased by Oracle and branded Oracle TPM. “Overall, we are viewed to be good payers in the industry,” Anderson says. “We want to maintain that because our subcontractors are our construction partners, and we need to work together to make sure both of us are successful.”

The new platform has allowed PCL to maintain its payment standards with much less manual work. “It removed a substantial amount of data entry required when processing payments,” Anderson says. “It’s also more transparent than the old mailing in the invoice or emailing the invoice and adjustments being made without the subcontractor’s knowledge.”

The system also ensures that if there is a challenge to an application for payment, that gets communicated immediately. “If a subcontractor applied for a payment of $200,000 this month for work they have performed, the project manager would go through and validate that. If there’s an adjustment, that would be communicated the next day to the subcontractor. So that aligns with what is now required under prompt payment legislation.”

While the new system means less work for subcontractors and assurance of prompt payment, it may not be easy for them to discard their old invoicing practices. “I

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TECHNOLOGY REPORT

SUPPLY

STRAIN

Shift to digital delivery options helps construction supply chain hold up through pandemic

BY DAVID KENNEDY

T

he construction supply chain strained under the considerable weight of the COVID-19 pandemic this spring, but in spite of slowdowns at manufacturing plants, revamped procedures at Canadian borders and stricter protocols on job sites, haulers have, generally speaking, continued to deliver the materials needed to keep projects moving forward.

There are exceptions, and many contractors have reported disruptions or delays since early this year. But considering the scale of the crisis, logistics networks have proved relatively resilient, according

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to Jordan Thomson, a senior manager with KPMG Canada’s Infrastructure Advisory team.

“All in all… the supply chain has held together pretty well,” Thomson said in webinar hosted by the Canadian Construction Association (CCA) in May. “It’s remained intact throughout the pandemic, although we have been hearing from our clients that there are issues, more so on the delays and just difficulties getting things actually to site.”

Thomson noted that key materials such as steel and concrete have remained available, but pointed to issues with more

specialized products, such as light fixtures and other manufactured finishes with longer lead times.

In a survey conducted this June, two thirds of Ontario contractors in the ICI (industrial, commercial and institutional) sector reported supply chain disruptions at a medium or high level. In three similar surveys carried out by the Ontario Construction Secretariat (OCS) at different stages of the pandemic, contractors have consistently cited supply chain disruptions as an area of concern.

Particularly when dealing with international suppliers, Thomson said contractors

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should be actively engaging with vendors to identify any problems early and get ahead of delays. With the crisis expected to persist for some time, he also advised moving up shipment dates when possible to ensure material and equipment is available when needed.

Beyond these steps, problems with the global supply chain remain largely out of contractors’ hands. But on job sites themselves, builders are adjusting their delivery protocols during the pandemic and turning to new software providers to modernize what have often been pen and paper solutions.

“It feels a little bit like we’ve gone into a bit of time machine and jumped ahead a couple of years in terms of the industry’s propensity to adopt technology,” said Noah Dolgoy, the CEO and co-founder of Tread, in an interview this spring.

The Toronto-based tech company has built a digital platform designed to streamline material deliveries and make it easier for contractors and material suppliers to connect with haulers. By digitizing a system that’s relied heavily on phone calls and paper tickets in the past, the platform eliminates much of the human error from the equation.

It also allows haulers to stick to their cabs on job sites, avoiding the exchange of pens or physical invoices – a critical step during the pandemic. The CCA’s site safety guidelines, now well ingrained on sites across the country, advise nothing be passed between deliverers and receivers for the duration of the pandemic and many contractors have built this step into their own action plans.

With the added impetus, during the early months of the pandemic Dolgoy said a range of barriers – regulatory, administrative and culture – eroded.

“What we’re seeing is not only increased adoption, but increased technical literacy and increased comfort. Comfort with change and desire for change across the board in the industry,” he added.

Ottawa-headquartered GoFor Industries Inc. is another tech company that’s seen its business surge as COVID-19 reconfigures construction’s conventional supply chain.

Unlike Tread, which focuses on the movement of bulk raw materials, GoFor transports a wide range of products for retailers such as HD Supply, The Home Depot and Sherwin Williams. The company moves everything from paint and ABS piping to HVAC equipment and larger palletized materials. The majority of the its revolves around smaller-scale construction like renovations, but about 30 per cent of its deliveries now go out to large projects.

“In a lot of ways, we start out kind of filling their gaps – when they need it, or if it’s urgent,” Brad Rollo, the company’s CEO and co-founder, said this spring. “But if you start to look at the way we can do it versus somebody who owns their own vehicle or puts their own staff in it, we’re so much more cost efficient.”

Through GoFor’s app or website, retailers can supplement their own delivery fleet to get materials out to contractors quickly,

We’ve gone into a bit of time machine and jumped ahead a couple of years in terms of the industry’s propensity to adopt technology.”

– Noah Dolgoy, Tread or contractors themselves can secure a missing component without sending their own staff off-site. Rollo pointed to Pomerleau, Modern Niagara and Ainsworth as a few of the contractors it’s working with.

With many builders having adjusted their site protocols to eliminate any interaction with delivery drivers, GoFor has gone contactless as well.

“Everywhere that you have a point of contact we’ve reduced it to zero,” Rollo said, noting that paperwork has stopped changing hands and its drivers are now wearing masks as a precaution.

Moving forward, as the industry slowly returns to something resembling normal, Rollo anticipates its retailers will shift to a “delivery-first mentality” to compete in the post-COVID world, while contractors will place increased emphasis on the availability of digital storefronts and on-demand deliveries.

With COVID-19 forcing contractors’ hands, the construction industry looks likely to emerge from the pandemic with a firmer grasp of technology and a greater willingness to embrace it. The move to cloudbased construction management software is another example.

In the long run, Dolgoy expects the pandemic will help boost productivity across the sector by turning builders onto the advanced telemetric and artificial intelligence tools that Tread and other companies are offering.

“Those used to feel like dirty words when we talked to clients about them and now they’re so excited… I think it’s very much a harbinger of where the industry’s going,” he said.

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