Jim Forrester and Paul Daynes from Newforma discuss regional variations in the UK and US construction sectors, and explain why collaboration is key
In this Q&A between Jim Forrester and Paul Daynes; we examine the differences between the UK and US construction industry, the urgent need for collaboration, the challenges and opportunities faced, and what lies ahead.
What are the main differences you see between the UK and US construction sectors?
JIM: When it comes to technology adoption across the UK and US AEC sectors, we see a big difference in willingness to try new types of contractual models. In the US, there is more interest doing design-build projects. There are a lot of construction firms which have found that this is an area of differentiation where they can provide the owner with a more cost effective model.
PAUL: In the UK it’s slightly different. The government is driving construction efficiency, mainly in the public sector, but is also beginning to impact the private sector. At this point in our UK development, I still feel that contracting strategies used do not encourage shared value through collaboration. While design companies adhere to the RIBA Plan of Work, the deeper you are in the supply chain, it feels like the less value you can deliver. We are noting however that construction firms are looking to control their information more rigorously, albeit from a technology standpoint using extranet solutions which disconnect from the design process, hence hindering a workflow back to design.
What untapped opportunities do you see across the construction sectors in the UK and US?
JIM: A lot of construction firms in the US are adopting lean principles. There are five widely recognised levels of lean adoption, and everyone is trying to evolve along that spectrum. But many firms don’t know how to apply that regarding business collaboration. Some will start with the tools they think they need, rather than the processes that they actually put into practice. The Lean Construction Institute (LCI) has established itself as an influencer in this area, and its visibility is increasing. The methodologies used by the LCI are focused on construction but are also applicable to a design firm looking to become leaner.
The growth of data across projects is also a big opportunity; knowing how to mine this and make better business decisions about what might be most profitable to your specific business. Traditionally, analytics have been used in the construction environment to evaluate things like safety – but there are still so many other areas that can be explored from a business analytics perspective.
PAUL: Better collaboration is a big opportunity in the UK, however, we have noticed that nobody is really acting on this yet – that’s despite the former Minister for the Cabinet Office, Francis Maude, pushing better work on this back in 2012. We do see a self-awareness of the need for change – a recent survey that Newforma conducted with Vanson Bourne found that the majority (95%) of AEC sector professionals believe that changes could be made within their organisation to drive more effective collaboration on today’s projects.
How do you see the “skills gap” translating across geographies?
JIM: In the US, it’s tough to get kids that are leaving school to consider joining a traditional engineering firm, for example. They might be attracted to a design firm because it’s perceived to be cool; but once you get into the day-to-day work of managing complex projects, it’s easy to understand why some look outside the AEC industry for career growth. It’s incumbent on us in the AEC industry to make it attractive for someone with ambition to develop skills and business acumen while applying things like business analytics or game design.
PAUL: In the UK we’re in a similar situation. The wide adoption of tools and technology across businesses in this country means that recruitment requirements have changed. However, while there now may be some element of comprehending the value of data in any given job in the AEC sector, the creative element should still be the primary focus. In other words, remove the task administration to enable more time for design and construction.
What effect will Brexit have on the construction industry?
PAUL: While we see some trepidation towards Brexit and the effect it may have on the AEC sector here in the UK, the industry is quite optimistic from what I can see. In a year, we may see a different situation. Much depends on investor confidence. There remains a desperate need for investment in housing. Infrastructure investment remains confident with the recent confirmation of HS2, the Heathrow new runway and Hinckley point projects. So there remains a degree of optimism. The successes we’ve seen in recent years tell me that investment made in the UK is a safe bet.
JIM: In the US, there is a lot of concern about what Brexit might mean; most firms Newforma deals with have some international component and they’re showing concern that it might impact their businesses. I wouldn’t limit uncertainty just to Brexit – our own US election cycle has created a lot of noise about where infrastructure expenditure might go.
Looking ahead, what is next for the global construction industry?
JIM: The commoditization of IT is already having a significant impact as businesses start to see and acknowledge what this can bring. It’s up to companies like us to enable that by easing our customer’s digitalization journey, there is a smooth transformation.
Beyond technology, we do have a responsibility to create things in a sustainable way; this should be our collective call to action over the next 3-5 years. It’s our professional responsibility to evolve and improve the things we do on a daily basis to ensure a sustainable future for all of us.
PAUL: I agree. Getting business leaders to understand the benefits of an IT strategy will be one of the keys to evolving the industry. We’ve got to get on top of these things and find new ways to do business but in order to make this work business themselves need to become more collaborative.
Regional Director, UK and Northern Europe
Co-founder & VP of Business Development, United States