Construction criticised for lagging behind: New Zealand, proud of its technological innovation, singled out as the pandemic makes a digital revolution urgent

Project delays, budget overruns and low productivity are widely recognised problems in construction worldwide. There are many reasons behind them, and the upheaval of the pandemic in 2020, with one lockdown after another, has made them worse. Digital transformation is now seen as an effective way out of the industry’s difficulties. However, a recent research report from International Data Corporation (IDC) has sounded a warning for the entire construction industry. New Zealand was among the countries singled out, with professionals noting that ‘Australia and New Zealand lack effective technology and are comparatively behind technologically’.

The revolution is unfinished; there is still work to do

The report, Digital Transformation: The Future of Connected Construction, surveyed 835 people connected with the construction industry across countries in Europe, the Americas and Asia-Pacific. It found that the industry was still in the early stages of digital transformation and faced challenges.

 

Today, in the 21st century, digital solutions are widely used by organisations and businesses. Yet construction, a pillar of national economies, has still not fully embraced digitalisation or enjoyed its benefits. The survey found that, worldwide, nearly 60% of businesses were still at the first or second stage of digital transformation, and Australia and New Zealand were no exception.

Many factors prevent businesses from moving forward. The three main challenges commonly faced across Asia-Pacific in digital transformation are:

• Integrating digital projects across organisations

• Planning a digital investment strategy

• Defining key metrics for digital success



 

In Australia and New Zealand, common challenges include data security, effective risk management and outdated technology.

With New Zealand’s pandemic controls now showing initial success, economic recovery has naturally become the government’s foremost task. ‘Building the nation through construction’ is one of its key strategies.

However, the sudden pandemic caught many New Zealand construction businesses off guard. Both the wider environment of markets and policy and day-to-day matters such as health and safety, staff management and project expenditure are changing rapidly. Construction businesses must rethink their approach to keep pace.

Professionals believe digital transformation can support the construction industry’s recovery and long-term development. Digital management can help construction companies control risks effectively, complete projects on time and within budget, and improve workplace safety, enabling smoother project delivery and greater client trust. According to estimates from the McKinsey Global Institute (MGI), adopting management systems similar to those used in manufacturing could help some construction companies increase productivity by a factor of 5-10.

 

The industry needs a more comprehensive transformation strategy

We often say that change opens the way forward. That is easy to say but difficult to put into practice, particularly when nearly 90% of New Zealand construction businesses have fewer than 20 staff. In these circumstances, pursuing innovation and change requires a more comprehensive, coordinated transformation strategy to accelerate digital development.

 

Here, we must acknowledge that PlaceMakers, New Zealand’s largest supplier of building materials and construction tools, has once again led the way in digital development. Its well-executed combination of integrated digital solutions has addressed tradies’ urgent needs, leading the way in contactless shopping while helping to improve industry productivity.

• Place orders and choose standard delivery, shipping or collection

• View, track, amend and update orders in one place

• Find products and stock availability, and view trade customer prices
• Create product lists by project and add items to your cart
• Order through a trade account and collect from any nominated branch

• Add team members and set different access levels

• View detailed product information and images

• Calculate quantities of timber and other materials, and order directly through the app
• Save time and effort by choosing intelligently recommended products when searching

The Trade App gives PlaceMakers customers access to all these services anytime, anywhere. Through the Trade Portal, they can manage orders whether they are in the office, at the dining table or on the sofa. A single login works across both online platforms.

For logistics, PlaceMakers has introduced a unique, world-class service called Smart Delivery. PlaceMakers’ head of business transformation, Wayne Armstrong, said: 

‘We draw on a range of proven technologies, such as restaurant ordering platforms and Uber ride-hailing platforms, to give our customers a reliable, transparent, end-to-end delivery service. Customers nationwide can track their deliveries throughout the process, giving them greater peace of mind.’

PlaceMakers also uses digital technology in warehouse management. Customers can now place orders using handheld devices rather than marking items in notebooks as they once did. This technology saves each drive-through customer an average of 5 minutes.

 

               Keven Chen

  Asian business manager, PlaceMakers Mt Wellington branch

To learn more, we interviewed Keven Chen, Asian business manager at PlaceMakers’ Mt Wellington branch. He said: 

‘As a leading industry brand, PlaceMakers has always been committed to being the easiest supplier for customers to work with. Our digital strategy will help us serve customers better, giving them a smarter, faster and more attentive shopping experience.’

PlaceMakers was also among the first businesses in New Zealand’s building materials supply industry to launch an official WeChat account. Keven said: ‘Our official WeChat account was likewise launched to better serve Chinese customers. It is both an information platform bringing together the latest industry news and knowledge, and a gateway for customers to learn about and use our digital tools.

Encouragingly, the pandemic has prompted more and more businesses to begin digital transformation. IDC reported that 38% of construction businesses in Australia and New Zealand said they had plans for digital development within the next 12 months. 

To learn more about PlaceMakers’ digital tools or access first-hand industry information, scan the QR code to follow its official WeChat account.

Reference:

Digital Transformation: The Future of Connected Construction - An IDC InfoBrief | March 2020: http://constructioncloud.autodesk.com/rs/572-JSV-775/images/Autodesk-IDC-Digital%20Transformation_The-Future-of-Connected-Construction.pdf

COVID-19 accelerates digital transformation in the construction industry: https://www.worldconstructiontoday.com/news/covid-19-accelerates-digital-transformation-in-the-construction-industry/

MBIE Construction Report 2013

https://www.mbie.govt.nz/assets/77439ddc45/Construction-report-2013.pdf 

Mckinsey: Imagining Construction Digital Future

https://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/imagining-constructions-digital-future