If change is the only constant—as was famously observed by a Greek philosopher circa 500 B.C.—then why single out some changes as “disruption”?

Disruption is about more than just technology; it’s about more, even, than the rapid rollout and development of technology in the past couple of decades. The word disruption refers to processes or products that are fundamentally different from what is currently in use and that render unforeseen, large-scale changes. Early discussions of disruption (the term was coined by Harvard Business School professor Clayton M. Christensen in a 1995 Harvard Business Review article) compared incremental change in existing systems, which are usually supported by established corporations, to innovations that start out as something completely fresh, limited in their appeal and flawed in initial iterations.

The construction industry was—and still is—late to adopt most technologies and late in experiencing overall disruption. It also lags behind other industries when it comes to efficiency and productivity. McKinsey reported that construction is one of the “least digitized industries in the world,” despite employing approximately 7% of the world’s working-age population and representing one of the world economy’s largest sectors. Disruption is likely to be fast approaching now, even for the construction industry. But its delay may confer the benefit of allowing construction companies to learn from other industries’ mistakes.

What’s happened so far?

Some drivers of change, such as the pursuit of lower costs, aren’t new—they’re age-old. Lower costs, or at least a better value proposition for the customer, are at the root of most tech adoption success stories. Frequently, savings are associated with better use of assets. For example, app-based ride share services challenged the assumed necessity of car ownership and presented consumers with a completely new model for transportation. The same thing can apply to the construction industry, where idle construction equipment and wasted materials cost contractors enormous sums every year. Software-based sharing programs can dramatically reduce barriers to equipment rental and leasing. Similarly, GPS and industry-specific mobile components, such as barcode scanners and radio frequency identification readers, greatly improve accuracy in tracking shipments, equipment and material location and inventory.

When companies fail to quickly adopt new technologies or workflows, it is usually due to entrenched mindsets and failure to imagine sweeping change.

Established companies have repeatedly underestimated consumers’ willingness to alter behavior. Disruptive companies that start small (as Amazon did with books) often go unnoticed as they continue to add services and products (as Amazon did with streaming and electronic devices). By the time businesses notice their competition, it’s too late to catch up. Other examples include the entertainment industry, where video rental stores did not envision their service being supplanted by content streaming or rental kiosks, and the hotel industry, where consumer willingness to open properties they owned via Airbnb—and their willingness to stay in a stranger’s home—was unanticipated. The construction industry may be similarly shortsighted as it fails to see robotic construction, machine learning, modularization and other trends as game changers.

Often, however, even when industries do see change coming, they are unsure of how to meet it. This has created openings for small, agile start-ups to disrupt larger, established companies. These start-ups typically launch fundamentally new business models that are based on a new technology, which serves as an enabler. The new technologies are often computer-based (and, increasingly, mobile-based), but not always: improved battery technology has enabled better cars, and improved oil extraction technologies have enabled hydraulic fracturing.

What will happen next?

PwC Global defines five factors that can significantly alter an industry: 

1. changes in customer behavior;
2. new kinds of competition;
3. shifting regulation;
4. new methods of distribution; and 
5. changes to a company’s core business.

Successful company response can include using detailed plans and specialization to guide growth; inviting more team involvement (not less, as is an all-too-common reaction); and instituting a global supply chain. It’s imperative that a company broadly identify what it is providing consumers; beyond the specific product or service being offered, there is always a basic problem being solved. For example, cars are a product; transporting people from one location to another solves a basic problem. Companies should also look at how and why people are using their products. For the construction industry, the question becomes, “how are people using the facilities the industry builds?” A timely example is warehouses, where traditional pick/pack/ship routines are giving way to the new single-item picking requirements of e-commerce as well as to automated equipment, which requires different floor layouts, ceiling clearances, etc.

Another strategy for success is being open to vertical integration—or in the construction industry, end-to-end construction. Design and construction companies need to better visualize how their business models can innovate in terms of where and how buildings, facilities and infrastructure are planned, designed, procured, constructed, operated and maintained. Investing in research and development, exploring new project delivery methods and remaining open to new materials and methods are all critical.

There are currently a few key ways in which technology can be leveraged to spur growth and efficiency in design, construction and engineering:

• Productivity. Owners and contractors are increasingly using technology to benchmark productivity. This will serve as a driver to adopt improved methods. A recent McKinsey report, Imagining Construction’s Digital Future, identified the construction industry as being ripe for disruption. According to McKinsey, large construction projects take 20% longer than scheduled to complete and are up to 80% over budget. Overall, the construction industry has trailed other industries in the adoption of process and technology innovations. In addition, they struggle with the basics. Opportunities exist to improve project planning and coordination, develop contractual approaches for risk sharing and innovation, improve performance management and refine supply chain approaches. Moreover, construction R&D spending is less than 1%, well below the 3.5% to 4.5% for the aerospace and automotive sectors. 
• Collaboration. Mobile devices and the apps created for them have improved collaboration among members of design and construction teams by allowing workers to quickly access, document, share and edit important project information. Cloud-based software and file storage extends that functionality. Heavy-duty hardware made specifically for field work (featuring rugged construction and screens that are better lit for viewing in bright daylight) has also entered the market. It is expected that wearables such as smart glasses and hardhats that can provide visualization, augmented and mixed reality will eventually replace handheld devices, further removing barriers to communication.
• Building Information Modeling. BIM is now in wide use, with recent program versions broadening the range of information contained within a model. For example, conceptual models are created for use during early planning phases—even during capital appropriations—and are then built upon during the design phase. Models pull from historical or other databases to improve delivery of information on site conditions, scheduling, etc. and they can be connected to devices in the field, where real-time sharing enhances productivity. It is also becoming more common for an expanding range of team members to have simultaneous access to a project model, and for the model to be a required deliverable to the owner and operations team. Beyond the three spatial dimensions modeled in original iterations of BIM programs, 5D is the next generation of building modeling. It takes into account a project’s cost and schedule, as well as physical characteristics, such as acoustics and thermal performance, that don’t fit neatly onto a coordinate grid. Building models, therefore, increasingly resemble the real-world structures they are meant to represent.
• Virtual Reality and Augmented Reality. VR is an interactive computer-simulated environment—more akin to walking through a space than viewing a model of it. AR, while similar, uses the real world as a visual backdrop and superimposes computer-generated information. Because these types of simulation can be quite realistic, they represent a new era in architecture, engineering and construction. In addition to improving clash detection and safety, these technologies show great promise in improving the accuracy of decisions made during project planning.
•  Drones and Geolocation. Drones, which continue to become more proficient in communicating with software on the receiving end, can collect information in locations that are hard for humans to access. Captured images can support site assessment and inspections, as well as augment a project team's understanding of project progress and as-built conditions. Drones can also be utilized to monitor logistics, deliveries and the workforce. Some companies are taking drone footage and converting it into three-dimensional pictures and videos that can be compared to architectural plans. Drones can work in conjunction with geolocation technology. They can be outfitted with GPS, take high-definition photos and/or generate images using light detection and ranging (LIDAR). Once incorporated into 3D models, this information can improve a project team’s understanding of ground conditions, which can be especially helpful during early planning. 
• Laser Scanning. As many manufacturers and other industrial owners prefer to purchase existing facilities versus building a new greenfield facility, laser scanning is growing as a tool to get an accurate picture of as-built conditions, even those that are invisible to the naked eye. Field measurements performed with laser scanners capture very detailed geometric information in the form of point cloud data and can be fed into BIM or CAD files to generate highly detailed, accurate drawings. This reduces the number of clashes between existing conditions and renovated elements.
•  Internet of Things. Process digitization will continue as the industry moves from paper to digital and online technologies. This will include real-time sharing of information to ensure collaboration; progress management and risk assessment; worker and safety management; quality control; document management; and more predictable project outcomes. Sensors and software now support building and infrastructure monitoring (such as tracking a building’s energy use or assessing bridge degradation) on an unprecedented scale. As the IoT develops, this trend will only continue. 

Some experts forecast that a new wave of fundamental changes is on the way and that it will be touched off by products that are able to “learn.” This seems a likely outcome in the construction industry. Current tech adoption has been used, for the most part, to augment existing workflows, as demonstrated by the above examples of asset management, scheduling and the assessment of building performance. But in the near future, a confluence of technologies such as IoT, application programming interface (API) and big data will become a fabric uniting and transforming other technologies. The amount of information that can be known, and the speed with which it can be known—not to mention the development of physical tools such as 3D printers that extrude concrete—will cause a sea change in the way construction activities are performed and the way business decisions are made. Ultimately, these investments must show an increase in productivity, efficiency and better project outcomes.

Companies that are agile, proactive and willing to embrace change will be the leaders – the question is, how many construction companies will be among them?