Service, Offsite Work and Technology: The Big Paradigm Shifts for the Construction Industry in 2021

As the pandemic has led to a drop in the number of construction projects, the time has come for the reinvention of business models, a crucial step for the future of companies.

It has been proven that many companies are taking advantage of this period of lull to arm themselves with tools that will allow them to come back in force once the crisis is over. A recent study conducted by IFS shows that 70% of companies have increased or maintained their spending related to digital transformation, despite the health context. In the engineering, construction and infrastructure sectors, this figure rises to over 75%.

The year ahead will be just as unpredictable as 2020 given the challenges and opportunities that will arise. However, here are the trends that are emerging in the sector, for 2021 and beyond.

Manufacturers and services: when the lifecycle of resources becomes a priority

In 2020, the construction sector redoubled its efforts to ensure stable income flows and deal with difficulties. Several traditional construction companies have thus transformed themselves into real service providers for their customers, able to adapt to each stage of the resource lifecycle, but also to manage infrastructure and maintenance.

Costs are now defined for the entire lifecycle, not for each stage separately. The companies in charge of building these hardware resources are therefore facing a real paradigm shift because to ensure an end-to-end service, it is necessary to focus more on quality, longevity and ease of maintenance.

Most players in construction and engineering still operate on the basis of two separate contracts: one for construction, the other for service. In 2021 however, the trend will be to merge these into a single contract, covering the life cycle of the resource as a whole.

Materials and operational processes will need to be standardized to promote off-site construction

Off-site construction arouses growing interest and has gained more and more importance. Traditionally, in the case of building a house, all the materials were available on the job site. More and more companies are now relocating projects to covered spaces, where different modules are manufactured separately, then shipped and assembled on site.

As construction companies are therefore required to handle increasingly complex logistics processes for each project, good supply chain management practices will emerge. Most traditional companies admit to having very little experience in terms of references or inventories, and the example of companies like Amazon, whose supply chain is at the heart of the strategy, does not really reflect their reality. . They will therefore have to learn certain concepts fairly quickly in order to be able to juggle the multiple prefabricated modules to be shipped, at the right time and in the right order, to the sites.

There is a good chance that we will see an acceleration in investments made by construction companies in software capable of supporting them in controlling the supply chain. These will gradually change their mindset and adopt this standardized manufacturing approach, involving the use of serial numbers that can be reused on several projects.

In other words, 2021 will be the year when off-site construction pulls traditional businesses into its frantic race, relying on an urgent need for standardization of materials and processes.

BIM in 5D having reached its stage of maturity, place in 6D

Most people in the industry know what BIM is and know its benefits. This stand-alone 3D design technology greatly facilitates the development and construction of complex assets. Many industry players are now talking about 4D BIM, able to assimilate project planning, and provide a simulation video detailing the stages and how a resource should be ideally constructed.

BIM and ERP (Enterprise Resource Planning), however, do not yet form a winning duo, although this combination is full of potential, as most important data can be stored there. This is known as BIM in 5D. This fifth dimension symbolizes revenue, which is why the challenges faced in 2020 are likely to push companies to bridge the gap between BIM and ERP.

Knowing that 5D BIM is gaining ground and in order to simplify processes, it is very likely that 2021 will be the year when construction companies will automatically transfer their BIM models to their ERP. This will allow free flow of data between the different systems. The team responsible for responding to calls for tenders must however be able to sort and structure the data in order to automate pricing.

Avant-garde companies, which are already at the stage of implementing BIM and ERP solutions in 5D, will soon be able to explore BIM in its sixth dimension, dedicated to project maintenance.

Keep moving forward

Even in optimal conditions, construction is a demanding sector, which requires the execution and mastery of complex projects. Investing in the long term in suitable technologies remains the best way to ensure the business value and resilience of a company.

Despite all the surprises it holds, 2021 will be a year of opportunities for the construction, engineering and infrastructure sectors. However, a good dose of strategy and tenacity, as well as a clear vision of what servicization and technology can bring will be required to be able to grasp them.