Half of construction firms and project owners report adverse project performance in past 3 years. Majority lack confidence in the industry’s ability to deliver projects on time and on budget.
It’s time to reassess the approach to effective performance of major construction projects, according to Make it, or break it – Global Construction Survey 2017 from KPMG International. Of the 200-plus senior construction executives taking part in the survey, only 25 percent say they have confidence in the industry’s ability to deliver projects on time and on budget.
Richard Threlfall, UK Head of Infrastructure, Building and Construction at KPMG comments “economic uncertainty is impacting on business confidence within the UK construction industry. But as the survey shows, the sector is also facing disruption from technology and the changing skills requirement in the workforce. For those companies that are quick to adapt and set aside their initial reservations, they could reap the rewards of more efficient working.”
New rules for a new generation of construction worker
The growth of the millennial workforce is exposing the limitations of the industry’s reliance on “hard” technical controls. As 37 percent of the workforce, millennials now outnumber baby boomers, who comprise just 23 percent.
“While millennials are more comfortable with the technological advances of the sector, they are more likely to reject the strict rule and regulations associated with project management. Some of the executives involved in the survey spoke of staff feeling restricted and how hard, technical controls are proving inappropriate for a younger workforce,” explained Threlfall.
Yet, just 40 percent of the organizations in the survey have formalized ‘soft’ controls – which promote rather than dictate good behavior. Threlfall comments, “There is an urgent need to reduce the number and level of controls across the construction industry. While it is important to be thorough and systematic, the processes must work for all generations. Rules and procedures are only as good as the people implementing them.”
Poised for a digital breakthrough
This KPMG 2017 Global Construction Survey finds an industry that’s very excited about the potential of technology – but also a little cautious about where to invest to get the optimum impact.
An overwhelming 93 percent of respondents think technology/innovation will significantly change their business, but a mere five percent view their organizations as ‘cutting edge’ in terms of their technological maturity. And, fewer than one in 10 are routinely using innovations like mobile platforms, advanced data analytics, and robotics and digital labor. As further evidence of this slow response to disruption, fewer than half of the respondents say their company has developed a data/technology strategy or roadmap.
Richard Threlfall said, “The survey responses reflect the industry’s cautiousness towards technologies. They would rather follow the status quo than lead on innovation. While the UK is starting to adapt quicker than other regions, there is still a long way to go before companies are reaching their maximum potential.”
While other sectors have succeeded in raising productivity over the past decades, construction has largely stood still. The findings suggest both construction companies and owners need to take a closer look at governance, people and technology.
“These three drivers should not be taken in isolation, and instead focus on how they integrate and influence each other”, Threlfall adds. “By embracing technological advances, not only can it improve efficiency, but help to attract and retain talent – something that is critical for UK companies as they try to navigate a possible short-term skills gaps due to a reduced foreign workforce as a result of Brexit.”
About the report
Make it or break it – Global Construction Survey 2017 highlights the views of 201 senior executives from major project owners and engineering and construction companies. The report looks at how the industry is approaching governance, people and technology. The survey, now in its 11th year, includes both private companies and government agencies, with project owners from many industries including energy and natural resources, technology and healthcare.
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About KPMG’s engineering and construction team
KPMG’s team of seasoned industry professionals understand the key issues facing clients on a local, national, and global level. With more than 2,000 professionals in over 40 countries worldwide, our multidisciplinary teams help clients identify and mitigate project risks throughout the project lifecycle. Our services include construction program evaluations, project risk and controls assessments, contract compliance analyses and cost investigations, as well as project support on complex and troubled projects.
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