When everything’s turning on its head in technology, what should you do?

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Virtual Reality has resulted in significant sales increases for builders applying the technology, says Event Dev president David Payne (Image from inventdev.com website)

Most architectural, engineering and construction companies are the beneficiaries, rather than the victims, of technological change. Your business efficiency undoubtedly improves (once you’ve gotten through the learning curve) and you can generate much more high-quality work volume with less effort and stress.

There are exceptions, and these issues show how the rapidly evolving world of artificial technology, virtual reality and microprocessors may tear established models apart, sometimes at record speed. Worse, if you are fortunate enough to be on the leading (bleeding) edge of change, your place isn’t secure when the revolution truly hits your environment. You may encounter downstream consequences even more radical than your initial successes.

Clearly the greatest stress and challenge has been in technical back-end operations, such as steel fabrication detailing, where offices once full of people at drafting tables evolved to people at computer terminals, evolving to . . . offices with computer terminals in third world countries where staff grind out the work at a fraction of the cost . . . to virtually no offices, when machine learning allows the systems to do most of the repetitive work automatically, even the non-repetitive stuff.

Building Information Modeling (BIM) has resulted in new learning and collaboration challenges for design professionals, as well as owner/decision-makers. Right now, the trades have it easy –these integrated systems certainly have the power to reduce conflicts and even make last-minute changes easier to complete without huge change order costs (and possible margins/disputes/expenses). The issue is not if, but when, to jump into the fray because as the technology evolves, capital investments decline, and the early adaptors — having spent a fortune on training and equipment — find this expense is a virtually a dead loss when the later competitor arrives and purchases off-the-shelf tools that do the work much easier and more effectively.

The media/advertising business has lived with these challenges for the last decade, and we’re wearing plenty of battle scars. The old daily newspaper has become an endangered institution, while other print media models increasingly have become niche enterprises. (The printed directory and encyclopedia businesses have almost totally died.)  Publishing businesses have fought the headwinds by aligning themselves with what had been online upstarts but are now media gatekeepers.  But you really have to work hard when you need to share a portion of your profit with an organization such as Google, at the same time as your client expects value for money at an order of magnitude greater than they ever could have imagined just a few years ago.

I think the scariest and most interesting challenges affecting the AEC industry will arrive when robotics, artificial intelligence and computing speed really begin taking over job site work.  After self-driving cars (and trucks, even sooner) become the norm, how will skilled trades do their work when the contractor rolls robots onto construction sites?

Science fiction? Maybe. But self-driving vehicles are moving past the theory to the practical stages, sending shivers through traditional manufacturers. (In the not-to-distant future, if you own a car, you rationally will turn access of it to a ride sharing service such as Uber, and operate it virtually around the clock.  And you won’t bother buying your own vehicle when you can obtain driverless rides whenever you wish, at a fraction of the cost of a traditional taxi. Woe be it if your trade is “taxi driver” or “truck driver”.)

With these observations, what should you do?

First, I can’t overstate the importance of being aware of the changes about to truly radicalize the way we do work and business.

The next challenge is greater: When to make changes. As I noted, sometimes it is folly to be first in the fray.  If you spend a million dollars on training, hardware and software to be the early adaptor — what happens when, just a few years later, long before you’ve amortized the capital costs, you find your competitors can do far more for far less. I would argue that, with technological change/improvements, you need to look at incredibly fast capital return/payback times before throwing away your existing processes.

The answer seems to be that you should apply a rigorous cost-benefit/ROI payback analysis on any new technology, and grab the tools that will result in returns on investment of a year or less, and be wary of innovations that would demand a longer payback (at least until the costs decline fast enough.) But when you reach the tipping point, you should dive in as fast as possible, to retain your market and cost leadership.

Finally, and this may give some hope for traditionalists, we should be aware that humans are wired for change at a pace far slower than the technology. As new tools and resources become available, the ones that catch on the most fit within our mind frameworks and are relatively easy to use and implement. Hence, the incredible success of social media and the fact that you can create really solid websites and have a truly impressive internet presence without spending massive sums on consultants, if you are willing to do the work in learning the basics.

I welcome your thoughts and questions on this topic. Please email buckshon@constructionmarketingideas.com or, if you wish, file a comment to this blog posting.

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