Digital Construction Management: Glimpses of Construction Industry by Akhilesh Srivastava

PART - I
GLIMPSE OF CONSTRUCTION INDUSTRY

1
CHAPTER
Glimpses of
Construction Industry
The construction industry is perhaps the oldest industry in the Sapiens

(human race) history. It is believed that development of frontal cortex
in human brain distinguished the Sapiens from rest of the animals
on earth. The development of brain led to imagination, story telling,
communication skills and socialization. Socialization needed shelters
or dwelling units, giving birth to the primitive construction activities.
Exactly what constitutes ‘construction’ throughout history Can we
consider pit-houses construction? What about grass shelters? One
thing is for certain: building activities are as old as humans themselves.
Construction during primitive times consisted of huts made of mud

and stone monoliths like Stonehenge.
This activity eventually lead to proto-cities, putting an end to pastoral

life and paving the way to society, as we know it today.
Over time, humans refined their construction practices and started

building more permanent structures. What we know as traditional
construction began to take shape in Ancient India, Egypt and
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Digital Construction Management
Mesopotamia. The earliest constructions were huts and shelters

built by hand or with modest tools. As cities grew through the Bronze
Stage, a class of expert craftsmen like bricklayers and carpenters
appeared. Occasionally, slaves were used for construction work.
Traditional construction, commenced between 4000 and 2000 BC in

Egypt and Mesopotamia when humans started to abandon nomadic
life. The construction of Pyramids in Egypt (2700-2500 BC) might
be reflected the first example of large structure construction. Other
ancient historic constructions include the Parthenon by Iktinos in
Ancient Greece (447-438 BC), the Apian Way by Roman engineers
(312 BC), and the Great Wall of China (220 BC). Likewise, the Romans
grew civil structures during their territory comprising bridges, insulae,
harbors, links, barriers and highways.
However, as population grew and urbanization took over, construction

quickly became a staple of civilization. Although this type of
construction is a far cry from the buildings we see today, this type of
activity laid the foundation for contemporary construction.
The story of construction engineering is one of human progression.

Innovation compounds over time, and anyone who has been inside
of a building owes a debt of gratitude to the industry pioneers of
yesteryears.
Population growth and urbanization led to an increasing need for

shelter developments, and focused attention on the importance of
local building materials and techniques. Accordingly, the construction
industry in many parts of the world started to grow with increasing
demand. In line with this, construction companies are growing at a
fast pace all over the world.. With an explosive growth of construction
companies, there is a dire need to review the processes and it’s
productivity and technology adoption in tune with the digital world of
today.
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Chapter 1: Glimpses of Construction Industry
Digitalization has changed the world in the last few decades.

Technology is taking over manual process faster than ever. Sapiens
are in the process of evolution from human to superhuman, planning
terrestrial construction activities from Moon to Mars.
At this juncture, when recently the World Economic Forum published

its long awaited report ‘Shaping the Future of Construction- A
Breakthrough in Mindset and Technology’, prepared in collaboration
with The Boston Consulting Group, it gave a different view of
reality about the construction industry. It is surprising to know that
construction is the least digitized industry marred with very poor
productivity in comparison with other industries of the world. While
other industries digitalized their processes and started reaping
benefits of increase in productivity in terms of low cost and better
services, the construction industry, which is the second largest
employment provider and most impactful industry, is still clinging to
many stone-age processes. There is need of change. There is urgent
need of technological infusion to cope with a fast changing world and
meet the huge demand of infrastructure and urbanization growth of
the world keeping in mind the construction industry has the maximum
financial and environmental relevance on the society.
Economical Relevance
As per McKinsey report, the construction industry with revenues of
almost $10 trillion and added value of $3.6 trillion, accounts for about
6% of global GDP. More specifically, it accounts for about 5% of total
GDP in developed countries, while in developing countries like India
it tends to account for more than 8% of the GDP.
The construction industry is expected to grow immensely in the

coming years, to estimated revenues of $15 trillion by 2025. More
than 100 million people are gainfully employed today in construction
worldwide.
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There are mainly three segments in the construction industry like

real estate construction which includes residential and commercial
construction; infrastructure building which includes road, railways,
power etc; and industrial construction that comprises of oil and gas
refineries, factories, textiles etc. The construction activity involved in
the different segments differs from segment to segment. Construction
of houses and roads involves about 75 % and 60 % of civil work
construction work respectively. Building of aerodromes and harbours
has construction effort in the array of 40-50%. For Industrial projects,
construction factor ranges between 15-20%. Within a specific sector
also, construction component differs from project to project.
Construction is a ‘horizontal’ industry (similarly the Financial Services

industry), in other words, construction has considerable interaction
with several other sectors, since the value creation practically always
occurs within or through means of constructed assets. Residential
housing accounts for 38% of global construction volume; transport,
energy and water infrastructure for 32%; institutional and commercial
buildings for 18%; and industrial sites (from cement to automotive
manufacturing) for 13%.
Over the past few years, growth of construction has followed the
trend of economic growth of the country. The multiplier factor between
growth rates of construction and GDP has been about 1.5X – 1.6X.
According to a 2014 estimate by the International Monetary Fund, if
advanced economies invest an extra 1% of GDP into infrastructure
construction, they would achieve 1.5% -1.6 % increase in GDP after
four years.
Environmental Relevance
The construction industry is the single largest global consumer of
resources and raw materials. It consumes about 50% of global steel
production and, each year, 3 billion tonnes of raw materials are used
to manufacture building products worldwide.
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About 40% of solid waste in the United States derives from

construction and demolition. Throughout the world, such waste
involves a significant loss of valuable minerals, metals and organic
materials – so there is great opportunity to create closed material
loops in a circular economy.
As for energy use, buildings are responsible for 25-40% of the global
total, thereby contributing hugely to the release of carbon dioxide.
Value therefore lies in improving the quality of construction and

the quality of materials used, in contributing to a healthier indoor
environment, increasing its sustainability and reducing its cost. Any
endeavour towards this goal will generate welcome benefits – whether
for families investing in their first private home or for governments
embarking on a giant infrastructure project.
Big Boost for Infrastructure Development

in India
Infrastructure sector is a key driver for the Indian economy. The
sector is highly responsible for propelling India’s overall development
and enjoys intense focus from Government for initiating policies
that will ensure time-bound creation of world-class infrastructure in
the country. Infrastructure sector comprises power, bridges, dams,
railways, roads and urban infrastructure development. In 2018, India
jumped 19 places in the World Bank’s Logistics Performance Index
(LPI) 2018, to rank 35th out of 167 countries
Historical background
During the period from 1950 to mid 60s the Indian government’s
main focus was on construction of industrial development and major
irrigation projects amounted to nearly 50% of the total capital outlay.
Labour–intensive construction was given priority at the cost of
productivity and quality. The industry was unorganised, dominated
by small and medium level contracting firms and a dozen public
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listed companies. The states and central government departments

formed their own innumerable forms and conditions of contract
favouring them against contractors. Bureaucracy dominated in the
administration of contracts; fair treatment was hardly given in solving
the problems. Planning and Designing was predominantly done
by hierarchy of the government departments with less attention paid
to economy of construction. Research and Development carried out
by organisations like Central Building Research Institute, Central
Structural Institutes, barely found extension work in the construction
field.
But in the last few decades, the Government of India demonstrated

a strong desire and commitment to invest in infrastructure, both as a
path to economic growth and as a way to tap the increasing surge of
populism, and to enjoy inclusive and sustainable growth.
India is witnessing significant interest from international investors

too. Foreign Direct Investment (FDI) received in Construction
Development sector (townships, housing, built up infrastructure and
construction development projects) from April 2000 to June 2018
stood at US$ 24.87 billion, according to the Department of Industrial
Policy and Promotion (DIPP). The logistics sector in India is growing
at a CAGR of 10.5 per cent annually and is expected to reach US$
215 billion in 2020.
India has a requirement of investment worth INR 50 trillion (US$

777.73 billion), in infrastructure sector alone, by 2025 and INR 304
lakh crore (US $ 5 trillion) by 2040 in order to have sustainable
development in the country. The major Infra projects are going to
be building new / widening of National Highways, Housing for all by
2022, Smart City Mission, laying gas pipelines under Mission CNG
to all household, power plants, utilities, metro rail in major cities and
new airports and ports etc.
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Growth Potential of Construction Industry

The McKinsey Global Institute estimates that the world will need to
spend $57 trillion on infrastructure by 2030 to keep up with global GDP
growth. This is a massive incentive for players in the construction
industry to identify solutions to transform productivity and project
delivery through new technologies and improved practices.
However, the industry’s future will be shaped by the following four

major trends that will affect the growth of construction industry:
»» Markets and customers
»» Sustainability and resilience
»» Society and workforce
»» Politics and regulation
The industry needs to identify and implement optimal responses to
these major trends – both with respect to the opportunities they offer
and with respect to the challenges they pose.
Market and Customer Trends

As demand in emerging countries is rising, the industry is identifying
how emerging and developing markets can benefit best from
technological advances and increased protection standards already
being applied in developed nations, while still taking into account
local market conditions.
There is expected rise in global competition between the countries

and companies. Many Asian construction firms capitalize on their
cost advantages and put great effort into securing construction
contracts abroad. Most Western markets are characterized by a high
degree of fragmentation, which impacts unfavourably on their level
of innovation and their ability to access foreign markets. Eventually,
the firms with strong processes in place and the ability to adapt their
business models to new markets will prove to be the winners. Many
of the others will disappear.
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Another challenging area of infrastructure is the ageing infrastructure

assets, There demand proper maintenance, upgrading, replacing
assets, and there is, of course, a fast-growing societal need for
infrastructure assets in emerging markets. Overall, there is immense
opportunity, and new responsibilities for the construction industry.
The vast ‘infrastructure gap’ cannot be bridged by public sector

money alone. Private capital is needed, so the trend in infrastructure
construction projects and financing is for PPPs. One other notable
development is the increasing number of infrastructure mega projects;
these projects, however, have a poor record historically in terms of
on-time and on-budget delivery, environmental footprint and public
support.
Sustainability and Resilience Trends

Increasingly, sustainability is becoming a requirement rather than
just a desirable characteristic, and its pursuit is bound to affect both
the construction process and the built asset itself. The construction
sector produces an enormous amount of waste, so efficient use and
recycling of raw materials, can offer huge potential benefits.
Other new priorities are emerging accordingly, including optimizing

space, for example, and ensuring more efficient methods of heating,
cooling and lighting. The industry is increasingly making use of off-
grid or distributed power sources, such as wind power, geothermal
energy and solar panels on roofs.
The industry also has to address growing concerns over natural

hazards such as flooding, hurricanes and earthquakes and has to
enhance resilience. So new emphasis is being placed on devising risk-
mitigating solutions, especially in urban areas with high population
density. Finally, the industry must engage with the growing threats to
cyber security. No doubt many important benefits will emerge from
the convergence of Web, Cloud and Mobile platforms, as well as the
Internet of Things (IoT), but vulnerability will increase, too – particularly
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in an industry as decentralized as the construction industry, with so

many different stakeholders involved.
Societal and workforce trends

The world’s urban population is expected to exceed 6 billion by
2045, with about a quarter of that population living in slums, if the
current proportion remains unchanged. Hence the need for a boost
in affordable housing in urban areas, where the construction process
is very complex, owing to space constraints and for increased
infrastructure spending on water supply, sanitation, and so on.
An additional demographic trend, particularly in developed nations,

is the increasing number of ageing people which will also affect
the construction industry. New technologies require a highly skilled
workforce, and the construction industry, traditionally perceived as
less glamorous than other sectors will struggle to recruit the requisite
‘digital’ talent.
The construction industry is concerned with the health and safety not
only of workers but also of the people who actually live or work in the
buildings. Employee health and productivity are linked to the quality
of the indoor environment, and that quality is largely determined by
decisions made during project development and construction. The
construction sector’s responsibility does not end with the delivery of
the project: the entire operations or use phase is affected by the initial
selection of materials. The safer the material, the better for health and
the environment. For instance, asbestos has been outlawed in many
countries as construction material, and construction companies are
increasingly motivated to ensure that the living and work environments
that they create are ergonomic and allergy-free. In addition, safer
materials can be more easily integrated in the circular economy.
A further challenge facing the construction industry concerns the

rights or needs of local communities. Neighbourhood lobby groups,
for instance, often influence permit decisions and might even be able
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to force the withdrawal of permits already granted. Communities are

also becoming more organized and professional due to new forms of
communication and social media.
Political and regulatory trends

The various political challenges relate to regulation, bureaucracy,
instability and corruption.
Regulation impacts on many aspects of the Construction industry. In

a recent global survey, regulation was identified as the most important
driver of increasing complexity.
The industry is especially affected by changes in health and safety

requirements, financial and labour legislation, and environmental
standards. Any new rules in can adversely affect the industries
business processes. If designed thoughtfully, however, regulation can
actually prove advantageous to the companies. For instance, retrofit
investments in response to Germany’s new Energy Conservation
Ordinance have been a major driver of innovation for the construction
industry. Going even further, one could think of regulation not as
imposing a burden but as offering opportunities to stimulate an
industry transformation and inspire innovations that would greatly
benefit society and the environment.
Next is the issue of bureaucracy and political risk. The environmental

and social-impact studies will decide the construction permits. If these
studies are conducted inefficiently, however, or if there is a backlog
in the granting of permits, projects are needlessly delayed and their
prospects suffer, cash flows start later than anticipated, thereby
compromising profitability. An appropriate balance is required: on the
one hand, offering speedy approval processes; on the other, giving
all stakeholders their due share. Even after the permits are granted,
infrastructure projects remain vulnerable to cancellation, owing to the
vagaries of national or local politics. Frequently, a new government
will set different priorities from those of its predecessor.
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Another constant issue is that of political instability. The worldwide

community has debatably achieved to decrease overall level of
violence in modern decades, but certain areas continue to be places
of concern at enormous human and economic cost. Contractors
are wary of getting involved in such locations, even in post- crisis
conditions – especially in long-term infrastructure programme.
A new era of opportunities is rising. We have a rosy picture of the

future of the Construction Industry in the coming decades and enough
reasons to be excited about.
But are we ready?
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15
2
CHAPTER
Challenges of
The construction industry is the second largest contributor to India’s

GDP. Not only does it accompany huge economic potential but is also
among the biggest employment providers. According to government
reports, the sector was valued over $126 billion in 2016 and continues
on a steady growth path. It is further expected that the value of the real
estate and construction market will increase 7 fold by the year 2028.
While this seems encouraging, there are innumerable challenges that
may limit the growth prospects of the construction industry in India.
The latest MOSPI Flash Report October 2018, containing information

on the status of 1452 Central Sector Infrastructure Projects costing
Rs. 150 crore and above, brings to light the number of projects delays
and cost overrun amount, and the same is alarming
17
Trend in Projects over the Last Five Years 694
800
660
650
655
634
700
592
600
489
422
415
500
429
386
386
330
317
326
400
317
323
313
282
317
296
263
270
242
253
300
123
200
120
19
18
16
18
20
8
16
100
5
4
No. of Projects
0
8
1 4 1 5 16 17 18 8 18 8 2 01
20 20 20 20 20 01 20 2 01 t,
il, , il, il, il, ,2 , us
r ril r r r ay ne l y, g
Ap Ap Ap Ap Ap M Ju Ju Au
on Schedule Delayed without Date of Commissioning Ahead of Schedule
MOPSI – Project Implementation Overview –Aug 2018

Chapter 2: Challenges of Construction Industry
Cost overrun: Total original cost of implementation of the 1452

projects was Rs.18,27,757.29 crore and their anticipated completion
cost is likely to be Rs. 21,70,036.32 crore, which reflects an overall
cost overrun of Rs. 3, 42, 279.03 crore (i.e. 18.73% of the original
cost). The expenditure incurred on these projects till October 2018 is
Rs. 7,91,102.87 crore, which is 36.46% of the anticipated cost of the
projects.
Time overrun: During the reference month, out of 1452 projects,

375 projects are delayed with respect to their original schedules and
56 projects have reported additional delays vis-à-vis their date of
completion reported in the previous month. Of these 56 projects, 18
are mega projects costing Rs. 1000 crore and above.
An overview of the status of Indian Construction industry as evident

from the above report of Ministry of Statistics and Programme
Implementation (MOSPI) reveals that more than 25% of these
central sector projects are delayed beyond their scheduled date of
completion, and there has been a significant cost overrun of Rs. 3.42
lakh crore plus in these projects. The situation is more or less similar
worldwide.
This necessitates the urgency of modernising the various sectors

of Infrastructure. The actual achievements are far below the targets
due to a number of challenges. The challenges to the construction
industry are both internal and external.
Some of the big Challenges the

1. Lack of skilled workforce
There are lot of job opportunities in the construction industry but
most of it is restricted to manual jobs, which discourages the young
computer savvy urban population. Construction workers come from
rural areas in search of work and contractors still follow traditional
work practices, hiring low wages. This not only reduces the efficiency
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of the process but also makes it a lot risky. Nearly 70% contractors
believe there is lack of skilled workforce and qualified/certified
professionals.
Requirement of Human Resources for Constructions 2022
Engineers 3.72 million man years

Technicians 4.32 million man years
Support Staff 3.65 million man years
Skilled Workers 23.35 million man years
Unskilled/Semi Skilled 56.96 million man years
Total 92 million man years
To sustain growth of construction sector; substantial addition about

4 million per annum is needed to be added to the workforce for the
next decade.
2. Academic Curriculum
The academic curriculum of industrial and technical courses in India
is skewed to suit the needs of British Empire. Historically, the impulse
for creation of centres of technical training came from the British
Raj rulers of India. While Superintending Engineers and above
were mostly recruited from Britain, the lower grades e.g. craftsmen,
artisans and sub-overseers were recruited locally. To make them
more efficient, industrial schools were attached to Indian Ordnance
Factories and other engineering establishments.
The first engineering college was established in 1847 for the training
of Civil Engineers at Roorkee, named Thomason College (which later
become IIT Roorkee), which made use of the large workshops, and
public buildings that were erected for the Upper Ganges Canal.
Further, three more Engineering Colleges were opened by about

1856 in the three Presidencies. In Bengal Presidency, a college
called the Calcutta College of Civil Engineering (which later became
20
Indian Institute of Engineering Science and Technology, Shibpur)

was opened at the Writers’ Building in November 1856. In Bombay
Presidency, the Overseers’ School at Pune eventually became the
College of Engineering, Pune and was affiliated to the Bombay
University in 1858. Similarly, in the Madras Presidency, a industrial
school, established and attached to the Gun Carriage Factory,
became ultimately the College of Engineering, Guindy and affiliated
to Madras University.
Post-Independent India saw an exponential upsurge in the opening

of engineering colleges. The number of engineering enrolment seats
went as high as 17 lakhs per annum. But, lack of futuristic vision led
to rise in unemployment of engineers and subsequent decline in the
engineering seats.
According to All India Council for Technical Education (AICTE), the

number of engineering seats has been on decline every year. In
2016, total intake capacity at undergraduate level was 15.71 lakhs
of which total enrolment was 7.87 lakhs, which is just around 50.1
%. In 2015-16, total intake was 16.47 lakhs of which enrolment was
8.60 lakhs, which was 52.2 %. Many engineering colleges closed civil
engineering departments.
In addition, the country has a massive shortage of various categories

of construction tradesmen, operators and technicians and the existing
training facilities in the country for these categories hardly cope with
the demand.
The number of Industrial Training Institutes (ITIs) in India as on April

2016 were 13105. Out of these, the number of Government ITIs was
2293, while the number of private ITIs was 10812. The number of
students taking admission in ITI are around 13 lakhs. Fortunately,
the admission trend in ITI has not followed the pattern of engineering
colleges More students are opting for short-term gainful skill training
courses.
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Another issue related with the curriculum is lack of adequate

integration of theory and practical at the engineering college level,
requiring fresh graduates to be further trained at post-graduate levels
in construction technology and management. All India Council for
Technical Education (AICTE) with Engineering Council of India is
trying to make on job training mandatory for at least one semester or
one year.
Moreover, this is time of multidisciplinary education, where

civil engineering students should be trained in basic courses of
Information Technology, Computer science, electrical & mechanical
engineering, drone operations or other such relevant streams so that
their knowledge can be gainfully utilised.
3. Increasing Project Complexity

Modern construction projects are getting more demanding, both in
terms of design and functionality. The challenge is alleviated by the
lack of skilled labour and latest technology with most investors.
The project completion periods are getting shorter and project sizes
becoming bigger. China recently made a 57 story building in just 18
days. Many more such projects are going on around the world. At the
same time the complexity of structures is also increasing. Construction
of 100 storey plus buildings, long hilly tunnels, undersea tunnels,
more than 100 km long sea roads are quite common nowadays.
A report by Accenture suggests that only 30% of firms have been able
to deliver projects in the agreed budget and 15% on the agreed time.
The solution will be a movement from labour intensive activity to

mechanization and more pre-fabrication systems, and 3 D printing of
structures.
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4. Lack of Digitalization
One reason for the industry’s poor productivity record is that it still
relies mainly on the papers to manage its processes and deliverables
such as blueprints, design drawings, procurement and supply-
chain orders etc. Due to the lack of automation and digitization, the
information sharing is delayed. The Client, Engineers and Contractors
often work from different versions of reality. The use of paper
makes it difficult to capture and analyse data holistically. It seriously
affects the productivity because in procurement and contracting,
the historical performance analytics can lead to better outcomes
and risk management. Mismanaged paper trails also routinely spur
disagreements between owners and contractors leading to disputes.
5. Governance
The government plays a key role in the development of the construction
industry. Being the policy-making body, the government in power can
greatly influence the productivity and output.
6. Environmental sustainability
The construction industry is responsible for 25-40% of the carbon
emissions on a global scale. In India, this is even more important
as traditional means of manufacturing and construction is a large
part of the process even today. Climate change and environment
is a global agenda and governments across the world are pushing
towards environmentally sustainable practices. New norms and
regulations require companies to become more technology advanced
and acquire skilled manpower. Taking care of the environment is not
only a social obligation but a legal requirement too.
7. Natural Hazards
Being a tropical country, India is prone to a lot of climatic disasters,
especially floods that happenes every year. Many big cities like
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Mumbai and Chennai have been deluged continuously and this has
been a huge challenge for the construction industry. The Sustainable
and safer building practices will help overcome this challenge.
8. Time Overrun
Timely completion of a construction projects is a rare phenomenon; in
fact, time overrun in the construction industry is taken as granted and
is a universal problem. Time delays can occur due to many reasons
some of which are :
»» Financial crunch
»» Non-Payment of Completed Works
»» Poor Contract Management
»» Changes in Site Conditions
»» Shortage Of Materials
»» Design Changes
»» Weather Condition
With the implementation of RERA (Real Estate Regulation and
developments, 2016) on-time completion of the project is a basic
requirement, failing which builders will have to bear penalties.
9. Cost Overrun
COST is one of the major considerations throughout the lifecycle
of a building project. But, unfortunately, nearly all the projects fail
to achieve project completion within the projected cost, whether in
India, as outside. The major factors that contribute to cost overrun
may be:
»» Lack of Contractor’s Experience
»» Poor Site Management And Supervision
»» Inaccurate Time And Cost Estimates
»» Schedule Delay
»» Frequent Design Changes
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»» Fluctuation In The Prices Of Materials

»» Financial Difficulties Faced By Contractors
Survey conducted by World Economic Forum with M/S BCG indicates
that large projects across asset classes typically take 20 % longer
time to finish than scheduled time and are up to 80 % over budget.
Construction productivity has actually declined in some markets
since the 1990s; financial returns for contractors are often very low
and too volatile.
10. Construction Waste

In construction site, large amount of waste is generated, which may
be unutilised materials, steel, cements, bricks, aggregates etc, apart
from the debris of the demolished structures. The quantity of waste
has a direct impact on the productivity and overall completion cost &
time of a project. It can also result in the significant loss of revenue.
Construction wastes are generated due to one or more of the below
reasons:
»» Frequent Design Changes
»» Poor Quality Of Materials
»» Workers’ Blunders During Construction
»» Poor Planning
»» Poor Site Management
Illegal dumping the result of increased construction waste generation,
is another issue and it has caused risk to human health and
environment.
11. Negative Impacts on The Environment

The construction industry continues to produce 35-40% of the world’s
carbon emissions. Making important modifications in carbon releases
needs a completely new project management tactic focused on
reducing energy emissions and water consumption.
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Construction is believed to be the most environmentally unfriendly

human activity. This is because it consumes huge amounts of natural
resources and is a major source of urban air pollutants, cutting of
timber leads to the loss of natural forests.
Apart from these significant impacts, a few other impacts are

excavation to provide aggregates, manufacture of cement, wastage
of water and the extensive use of toxic chemicals in construction
materials.
The impact of the construction industry is extensive and is readily

identifiable, yet most people are not serious on environmental
protection in construction sites.
12. Excessive Resource Consumption

Construction Industry has severe impact on natural resources,
It accounts for one-quarter of the wood harvest, two-fifths of the
energy and material flows, and one-sixth of the world’s freshwater
extractions. The building structures alone also impact the areas
beyond their direct location, disturbing watersheds, transportation
patterns, and air quality.
Excessive resource and energy use and a growing demand for raw
materials and water are mostly responsible for the depletion of natural
resources worldwide and the hastening of global warming.
13. Shortage Of Sand & Water – The Most

Alarming Challenge
Now that we know how the construction industry is plagued with
challenges, the most alarming one is the shortage of natural
resources like water and sand which further contribute to issues like,
time overrun and cost overrun.
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14. Non-availability of land within city limits

Though the demand for housing and commercial projects in the cities
has been increasing, supply is highly limited due to non-availability
of land and the rising costs. This makes most construction projects
unviable and it impacts both on the contractors and the buyers. Material
prices too have increased over the past few years and building high-
quality properties with the right technology and materials has become
a very costly affair – something that doesn’t attract the general buyer.
15. Low Technology Adoption in Construction

Industry
Technology can transformed the industry, and whoever cannot keep
up will be left behind. Necessary construction technology should
include cloud-based software, integrated collaboration, and mobile
project management.
Technology can be a big differentiator in the construction industry

today. Technologically efficient builders are attracting collaborations
in the higher end and businesses that follow traditional means are
falling behind. Elements like Virtual Reality, AI security, and BIM are
transforming the trends today, both in the commercial and housing
sector. It is necessary that all competitors start getting technologically
efficient to live up to the challenge of technology.
16. Challenges related with contracting

»» Contract Procedures
No standardization has taken place in practice in spite of guidelines
on Standard Contracts Documents published by the Ministry of
Statistics and Performance Implementation (MOSPI).
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»» Dispute Resolution
Proper project planning process should be encouraged and Detailed
Project Reports (DPRs) should be completed before providing the
project go-ahead.
Firstly proactive approach should be taken to avoid the disputes and

if a Dispute has arisen then technology should be adopted for quicker
and faster resolution of the Disputes.
»» Construction Law
Multiplicities of Acts result in lack of clarity. This necessitates a
comprehensive draft law to be developed and enacted, providing the
way to avoid disputes and poor Contract administration.
»» Labour laws
Multiplicity of labour laws are applicable but very few are implemented,
result in exploitation of labour. Massive under-reporting of labour,
employed to avoid statutory benefits to be paid to workers, is noticed.
»» Public Private Partnership (PPP)
Concession Agreements have still to be rationalised based on the
spirit of partnership and mutual cooperation.
»» Clearance hurdles by Government
Problems relating to Land acquisition, Forest and environmental
clearances need faster attention. Rehabilitation and Resettlement
have to be attended to well in advance before project commissioning.
»» Contract Provisions for Risk Allocation
These may be apportioned between the Employer and the Contractor
on rational basis taking into consideration as to who shall be more
competent to shoulder the risks.
»» Defects in Contract Documents
Sound feasibility studies, efficient designs, timely support of
construction drawings, and equitable administration of contracts are
28
important. The overall experience is, that the contract documents do

not provide full information and date for proper appreciation of the
job requirements. The time allowed for completion of contracts is
generally not based on a scientific evaluation of the scope of work.
»» Extra Items / Deviation
Planning, designing and estimating are done in a haphazard way to
conclude contracts resulting in inevitable changes in time and cost.
Changes of alignments for Metro rails, Flyovers, Irrigation canals, etc
have become too frequent, as the required preparation was not done
before concluding a contract. Adequate soil investigation in case of
EPC / BOT contracts are done after concluding a Lump sum contract
and not earlier.
»» Final and Binding Powers
Engineers entrusted with the Final and Binding Powers, generally
develop a fear psychosis and do not take even justified decisions in
favour of contractors for fear of CBI / Vigilance officers.
»» Implementation of Value Engineering
Advantages of saving costs by implementing value engineering
techniques and workshops are hardly in use, during pre and post
contract periods.
»» Tendering unviable PPP Projects
The issues that hamper the viability of projects are – planning projects
beyond available finance, insufficient Viability Gap Funding (VGF)
and increased risk to the provider.
»» Use of Inappropriate contracts
Item-rate contracts having several inbuilt defects, are most commonly
used as opposed to Lump sum and EPC contracts. Engineers at
various levels need training in Contract Management and “Partnering”
concepts.
29
»» Low Prevalence of Lean Construction Principles

Indian Construction industry has not yet adopted the latest principles
of Lean Construction, which finds opportunities of reducing time and
cost by about 20 to 30 percent.
»» Selection of Design Engineering Consultants on the basis
of Quality-cum-Cost based Approach (QCBA)
QCBA should be the criterion for selection of consultants instead
of the traditional lowest quotation. Proper weightages on various
parameters contributing to be ‘Best Value’ should be the basis for
selection.
»» Award of Contracts based on ‘Effective Lowest Price’
instead of ‘Lowest Price’
Lowest bid alone need not be accepted for award, neglecting the
effectively lowest price, without considering the element of value
addition, as prevailing in Singapore. Relevant parameters for ‘Best
Value’ tender should be laid down for acceptance of tender
»» Taxation
Construction has high incidence of direct and indirect access, and
incentives as in manufacturing industry are not available.
»» Non-availability of Reputed Contracting Companies
Reputed and well-organised contracting companies are less than
1% of the available contractors. Contractors Development Institute,
started by National Academy Construction, Hyderabad, is practically
lying idle.
»» Low Research and Development
Investments on R&D in construction sector is insignificant:0.03% to
0.05% of construction project cost, negligible compared to about 4%
to 6% in the other sectors like telecommunication, manufacturing etc.
30
»» Lack of Partnership in Construction Industry

Lack of partnership result in successful completion of projects within
time, cost and performance parameters. Concept of Partnering
between the Employer and the contractor by way of cooperating
each other in a spirit of give and take is necessary for successful
contracting.
»» Exploitation of labour
Exploitation of labour in construction industry is another serious issue.
There are multiplicities of labour laws, but poorly implemented, result
in exploitation in labour. Massive under-reporting of labour employed
to avoid statutory benefits to be paid to workers is noticed.
17. Other Internal Challenges

Apart from the above reasons, the construction industry has some
inherent characteristics that make it a structurally difficult business
and that hinder attempts at reform. It also represents just one step
out of several in the value chain, and relies on a large number of
stakeholders, Therefore, the much desired industry transformation is
practically difficult.
Apart from being slow in technology adoption, there is also a continuing

challenge when it comes to correcting the basics of construction such
as project planning, which, remains uncoordinated between the office
and the field and is often done on paper. Contracts do not include
incentives for risk sharing and innovation; performance management
is inadequate, and supply-chain practices are still unsophisticated.
The industry has yet to embraced new digital technologies that need
up-front investment, even if the long-term benefits are significant.
R&D spending in construction is far lesser than other industries,

which is less than 1 % of revenues, versus 3.5 to 4.5 % for the auto
and aerospace sectors. This is also true for spending on information
technology, which too accounts for less than 1 % of revenues for
31
construction, even though a number of new software solutions have

been developed for the industry.
Technical challenges of the construction industry are also reason for

the slow pace of digitization. Rolling out solutions across construction
sites for multiple sectors that are geographically dispersed is not
an easy task. Further, given the sophistication levels of smaller
construction firms that often function as subcontractors, building new
capabilities at scale is another challenge.
However, none of this is going to get easier. Projects are getting

ever more complex and larger in scale. The growing demand for
environment friendly construction means traditional practices must
change. These are some issues requiring new ways of thinking and
working.
The sector tried to make incremental improvements, in part because

many believe that each project is unique, and it is not possible to
scale up new ideas or embrace new technologies.
Therefore, the industry must also confront internal challenges to

change.
The productivity improvements in construction have been meagre in

last 50 years, especially when compared to those in other industries
for the respective historical trends in labour productivity. Why does
the industry have such an unimpressive record?
»» Informal processes and consistency in process
execution.
The processes adopted by construction companies regularly lack
maturity. Often-greater emphasis is put on defining the final product
rather than on planning the actual construction process.
»» Insufficient knowledge transfers from project to project.

Even though every construction project has its own unique
characteristics, the processes of construction itself are repetitive in
32
nature. Therefore, knowledge of one project can be usefully applied

to subsequent projects but often it is lacking. Past experience is
therefore often lost, and projects continue to rely heavily on the
expertise of the individual project manager.
»» Poor project monitoring.
A related issue is the poor monitoring of projects, in comparison
to other industries. In many manufacturing industries, for example,
operations are continuously tracked and large quantities of data are
collected. In that way, if something goes wrong, a car manufacturer,
for instance, can quickly identify the root causes and implement
remedies immediately and efficiently. Few construction companies
are set up in this way.
»» Little cross-functional cooperation.
The conventional construction process is generally sequential,
reflecting the input of the project owner, designers, contractor and
key suppliers at different stages of the project. This set-up militates
against sophisticated construction planning. Ideally, the knowledge
of all stakeholders along the value chain should be fully exploited
early on in the design and planning process, but that is seldom easy
or even possible under current arrangements.
»» Little collaboration with suppliers.
The purchasing strategy generally involves long term relationship
with the key suppliers even then the final decisions are made on
adhoc basis on a project to project basis.
»» Conservative company culture.
The construction industry generally operates in a traditional
environment and often retains a conservative corporate culture.
The widespread perception is that construction companies are not
progressive or forward thinking.
33
18. Generational Differences

Another conflict that may arise is the conflict between generations.
More and more millennials are entering the job force that has very
different work ethics and sets of skills than different generations in
the field. This difference of opinion may cause conflicts. As a rule,
the older the employees the more structured hierarchy they seem to
prefer. Whereas, the Millennials and Generation Y individuals appear
to feel more comfortable when they are working independently.
19. Corruption
Finally, the challenge of corruption must be addressed. In many
countries, corruption remains one of the greatest barriers to
economic and social development. Although bribery and other forms
of corruption afflict almost every industry sector, they are a particular
concern for companies in the E&C and Real Estate sectors, given the
nature of their business
34
35
3
CHAPTER
Youth perspective
of construction industry
EMPOWERMENT is about the development of knowledge, skills and

the enablement of people to realize their abilities and full potential.
From this perspective, the construction industry has literally failed the
young people. A low level of innovation, coupled with the industry’s
stifled thinking, has confined young people to the boxed, conventional
thinking and is the main contributors for delay in evolvement. In
developing countries, a few decades earlier, there was dependency
on foreign consultants due to shortage of skilled engineers/architects.
Now there are millions of young graduate architects, surveyors, geo-
technicians, quantity surveyors, designers, land surveyors and town
planners.
So, the challenge is not that of inclusion of professionals within

the construction industry. The main problem is that construction
industry peers have not created enough space for young people to
be fully integrated in order to grow within the industry. They are not
empowered enough to apply the knowledge that they have acquired
from academic institutions and develop and implement innovative
solutions to address the challenges the industry faces.
37
Instead of taking advantage of the new skill sets and the innovative
thinking capabilities of young people, the construction industry has
continued regurgitating old methods of doing business and have
neglected embracing new innovative ideas.
There is a pool of vibrant, intelligent young people with knowledge,

and exciting ideas on how we can transform communities through
construction, provide cost effective ways of providing sanitation and
address dire shortages of water for people in deep rural areas of the
country. And yet, the industry continues to conform to conventional
methods, exporting urban homes to rural areas and not identifying
alternative solutions or addressing issues on rural housing and
establishing what’s best for the country.
We keep exporting conventional city buildings to rural areas as if that’s

the only way of addressing the issue on housing. There is need to
identify what can be done to address current challenges how we can
improve rural homesteads and allow young people the opportunity
to innovate and implement the knowledge they have acquired from
universities.
According to the Engineering Council of India, in last few decades,

there has been an increase in the number of young engineers entering
the market, with one engineer for every 1000 people in the country.
The problem we have is not a skills or empowerment issue; it’s an

innovation challenge and lack of practical knowledge.
We as practitioners have failed the young people of our country by

underutilizing the resources and the young graduates that we have.
We need to take these young graduates and start using their knowledge
to identify areas in which we can build more cost effectively, and
maximize on their new and fresh approach to establish how we can
deliver infrastructure, services, water and sanitation in deep rural
areas of our country.
38
Chapter 3: Youth perspective of construction industry
To change the future of the construction industry nurturing of talent is

required so that that it becomes attractive for young people.
As per Engineering Council of India’s study, we need to be more

serious about building on artisanship, to allow young people to
explore their capabilities. Young engineers can be associated at
large infrastructure project sites as apprentice engineers, where they
can contribute to nation building.
Issues around capacity constraints at workplaces to accommodate

trainee artisans have been noted as a major challenge, unrealistic
expectations on remuneration is another serious concern given the
low profit margin and high operating cost of most of construction
companies.
Most of these young engineers are technology savvy and posses

inter disciplinary skills. They can be gainfully employed for quality
audit of the projects, where there is shortage of manpower in India.
Fourth Industrial Revolution

The Fourth Industrial Revolution has emerged, and its impact on
India has to be explored.
What is Fourth Industrial revolution?

The Fourth Industrial Revolution is characterized by the fusion of
technologies that is blurring the lines between the physical, digital,
and biological spheres.
It brings together digital technology and the physical world to create

a new range of products and services.
The possibilities of billions of people connected by mobile devices,

with unprecedented processing power, storage capacity, and access
to knowledge, are unlimited.
39
And these possibilities will be multiplied by emerging technology in

fields such as artificial intelligence, robotics, the Internet of Things,
autonomous vehicles, 3-D printing, nanotechnology, biotechnology,
materials science, energy storage, and quantum computing.
The revolution is evolving at an exponential rather than a linear pace

and it is disrupting almost every industry in every country.
What is the case with India?

The Fourth Industrial Revolution India is not a frontrunner in most
area of the fourth Industrial Revolution but has started to contribute to
the emerging digital-physical world. India heads the list of the Top 10
digital nations, according to the recently released Tholons Services
Globalisation Index.
The rank reflects the country taking global leadership in the use of
mobile data, by Aadhaar’s success in giving every resident a unique
digital identity, and BHIM & Rupay’s rapid growth and acceptance
compared to the stodgy performance of global card companies like
Visa and MasterCard.
These platforms are low cost and mass scale, precisely the
combination that defines most Indian markets. Such platforms can
be used to offer products and cloud-based services to citizens and
consumers by governments and businesses.
The new technologies, and data platforms like the GST Network and
the Corporate Identification Number system, along with interventions
like the Reserve Bank’s support for a Public Credit Registry, make
it possible to radically improve the transparency of the financial
system. This ensures that small businesses without either a credit
history or assets to offer as collateral can get credit on the basis
of their cash flow. The result could be transformative for millions of
small businesses.
40
If cloud-based stages can be place in the public space, new

commercials could construct on them, as Uber has completed with
the Global Positioning System (GPS).
Businesses that build on such platforms that offer low cost and large-
scale base could facilitate success in the 4th Industrial Revolution in
a way that India failed to achieve in earlier manufacturing avatars.
Digital-only banking is already a reality. Cloud-based business

software packages offer small businesses affordable pay-as-you-
go business software solutions that are precluded by heavy upfront
costs.
What should be done?

Nations should protect their interest first, like China kept the Google
at bay while growing its local “Baidu search engine”. Similarly kept
out the international credit cards while pushing China’s UnionPay.
This could be due to the concern that lack of control of key data
platforms could become a national vulnerability in conflict situations.
This was also one of the reasons for the major push towards data
localization as policy measure in India, despite US opposition.
The Indian government is also proactively working towards

localisation of key areas such as development of the satellite-guided
Navic system as an alternative to the US-promoted GPS is another
result of such thinking.
However, India should ensure that access to the domestic market be

leveraged in other areas like transportation, manufacturing etc. too,
without losing efficiency.
The Fourth Industrial Revolution may indeed have the potential to

robotize the humanity and thus to deprive us of our heart and soul.
However the creativity, empathy, originality, understanding can also
41
lift humanity into a new collective and moral consciousness based on

a shared sense of destiny.
History of Earlier Industrial revolutions in

India
A glimpse in the history of earlier industrial revolution will reveal that
India can’t afford to miss this Fourth industrial revolution.
India dominated global cotton textile markets in the 18th century. The
Indian textile industries took a hit when industrial revolution began
in Great Britain. Britain became a leading world exporter of textiles,
displacing India in the process. To protect its new textile industry,
Great Britain began to restrict imports of textile from India and other
countries by putting tariffs and other restrictions. British protectionist
laws hastened India’s de-industrialization.
Colonial laws forced Indian farmers to devote fields to cotton crops.

India thus, became an exporter of cotton and importer of textile.
India faced widespread famine and poverty during initial periods of
industrialization.
First steam powered cotton mill in Asia opened in Bombay in 1854.

More such mills were opened in later years. So, Industrial Revolution
came late to India and could develop properly only since it gained
independence in 1947. Thus, under British rule, India was forced to
miss the gainful time of Industrial revolution.
This time, socially and demographically India is in an advantageous

position to maximize the benefits of The Fourth Industrial revolution
with a huge population of relatively young and IT skilled people. As
per statistics, 65 % Indian population is in the age group of 18-55
years with second highest number of soft IT skilled awareness.
42
Sustainable development to fast changing

needs
What is sustainable development?
Sustainable development is development that meets the needs of
the present, without compromising the ability of future generations to
meet their own needs.
The concept of sustainable development can be explained in many

ways, but at the core, it is an approach to development that looks to
balance different needs against an awareness of the environmental,
social and economic limitations faced by a society.
Often, development is driven by one particular need, without fully

considering the wider or future impacts. The examples of the damage
this kind of approach can cause can be seen, from large scale financial
crises caused by irresponsible banking, to the changes in global
climate resulting from our dependence on fossil fuel based energy
sources. The longer the unsustainable development is pursued, the
more frequent and severe its consequences are likely to become.
There is lack of awareness about what is sustainable development.

Let’s try and understand it.
Is sustainable development all just about

the environment?
The focus of sustainable development is far broader than just the
environment. It’s also about ensuring a strong, healthy and just
society. This means meeting diverse needs of all people in existing
and future communities, promoting personal wellbeing, social
cohesion and inclusion, and creating equal opportunity.
43
Question generally asked is that if

sustainable development focuses on
the future, does that mean we lose
our present?
The simple answer will be no, it does not mean so. Sustainable
development is about finding better ways of doing things, both for the
future and the present. We might need to change the way we work
and live now, but this doesn’t mean our quality of life will be reduced.
A sustainable developmental approach can bring many benefits in
the short to medium term.
How does it affect me?

The way we approach development affects everyone. The impacts of
our decisions as a society have very real consequences for people’s
lives. Sustainable development provides an approach to making
better decisions on the issues that affect all of our lives.
How do we make it happen?

Everyone has a part to play and small actions, taken collectively, can
add up to real change.
The need for disruptive technology in

It’s a well known fact that the construction industry is one of the least
efficient industries and this is not restricted to India but a worldwide
issue. The reason is the unique characteristics of the construction
industry.
44
Examples of unique characteristics of the

industry
Multiple stakeholders with diverse interests/
needs
Three different project owners are involved in the construction of
the Berlin airport. Delays of 10 years and cost overruns of about €5
billion are expected.
High industry fragmentation

The United States has more than 700,000 Construction companies;
but only 2% of them have more than 100 workers and 80% have just
10 workers or fewer.
Low profitability and capitalization

Globally listed Construction companies have a weighted average total
shareholder return of only 5% and are consistently outperformed by
most S&P 500 companies.
Highly cyclical and volatile business

The Spanish construction market declined from a peak
of €151 billion in 2006 to just €70 billion in 2012, and has still not
fully recovered.
Complexity of contracts and dispute resolution

25 years ago, a typical contract consisted of about 50 pages; today it
can easily exceed 1,000 pages and is packed with legal complexities.
In a seminar, I heard somebody describing the construction industry as

‘the last craft industry’ and this may be true. When much of production
and manufacturing has become rigidly process oriented and quality
controlled, prototyped and tested; the construction industry remains
customized even in the developed countries, almost every building
45
that are build is have it’s own design, constructed piece by piece on
site.
The inefficiencies of all phases of building from procurement to design

and construction are outstanding. There is very less standardization!
The architects and designers are expected to customize almost

any product, and often at no extra cost because so much is custom
manufactured for each and every project. These results in additional
costs, both to those supplying services and products related to
buildings, which are then passed onto those purchasing buildings.
KPMG report estimates that the construction industry wastes a mind

boggling 20-30% of building costs possibly equal to nearly $1.7 trillion
worldwide each year!
All these suggest, that buildings and construction is ripe for disruptive
innovations as there is clearly a massive problem here.
Use of Artificial Intelligence, Building Information Modelling, Block-

chain, Prefabrication, 3D Printing, Robotics, Augmented Reality,
Simulation and GPS can be seen as possible saviours of the industry,
that would increase efficiencies but are they effective and are they
disruptive innovation?
Nowadays, the term ‘disruptive innovation’ is used everywhere.

From events & seminars, to blogs and even politicians, everyone is
talking about disruptive innovation, what does it means and how is it
changing business and our lives?
!!
Let’s find answers in the next part.
46
47
PART - II
Time to Go Digital
4
CHAPTER
Time To Go Digital
Probably, Construction is one of the first businesses that humankind

developed, and it continues to shape our daily life in unique ways
even today. All other businesses rely on the construction industry for
their accommodation, plants & infrastructure. The construction is a
determinant of where and how almost everyone lives and works.
The built environment heavily influences the quality of life. The

building and materials used in its construction and finishes have a
major impact on the health and well being of its occupants.
India is set to become the world’s third largest construction market by

2025 and the Infrastructure Sector will be a key driver for the Indian
Economy. The road sector profits especially from the Government’s
efforts and initiated policies are bound to ensure time-bound creation
of world class infrastructure in the country.
The construction industry in India is the second largest after

Agriculture. It accounts for about 11 % of the GDP and provides large-
scale employment. Growth drivers are an estimated urban housing
51
shortage of 18.8 million dwelling units and in rural India the shortage
in 2016 was estimated at 47.4 million units.
Infrastructure is presently inadequate to meet the demand of the

fast increasing urban population. Therefore, a regeneration of urban
areas in existing cities and the creation of new, inclusive smart cities
are needed. Future cities will require smart real estate and massive
infrastructure to accommodate those migrating from rural to urban
areas.
The construction industry in India is highly fragmented. There are

a number of unorganised players, which work on a subcontracting
basis, and the profitability of construction projects varies across
different segments.
There are mainly three segments in the construction industry: Real

Estate Construction which includes residential and commercial
construction; Infrastructure Building which includes roads, railway,
power, and Industrial Construction which consists of oil and gas
refineries, pipelines, textiles and so on.
India’s first economic growth was propelled by the

tertiary sector and as India moves into second phase of economic
growth, the need to improve manufacturing and to create production
enhancing resources are getting very important.
The construction industry is the backbone

of this process
The construction industry is of great importance in the growth of
India’s net output; not only because of its total share but also because
of its multiplicative factor and the forward and backward linkages it
has with the other industries.
The multiplier effect of construction is estimated to be in the range

of 1.5 to 1.8, which makes it one of the highest multipliers in the
economy. This is due to the high labour intensity in the sector, its
52
Chapter 4: Time To Go Digital
relatively few imports and its reliance on an extended and varied

supply chain.
Therefore, it is imperative to ensure increased productivity and

competitiveness. However, although productivity in the construction
segment is 55% higher than in the agricultural, it lags behind other
sectors, and is the only major employment-generating sector that has
seen a decline in productivity over the past few years. Since it is
a labour and input intensive industry, the only way in which it can
increase its productivity is by cutting costs and making the requisite
processes efficient.
What is Digital Construction?

“Digital construction is the use and application of digital tools to
improve the process of delivering and operating a built environment”.
In general terms, this will translate into making the delivery, operation
and renewal of our built environment safer, more efficient and more
collaborative. It will ensure that we get a better outcome at every
stage of an asset’s lifecycle.
»» Digital construction could take many forms. It might be simple
tools that make communication easier and reduce the need for
travel or messaging tools like Slack and WhatsApp or video
conferencing systems like Skype and Google Hangouts.
»» It could be the improvement or automation of a construction
process
»» Advancements in plant or materials
»» Cloud-based computing and filing systems
»» Software applications for use in both delivery and operation/
facilities management
Or
»» It could be considerably more advanced than that
53
»» Things at the cutting-edge like Unmanned Aerial Vehicles

(UAVs, sometimes referred to as ‘drones’)
»» Satellite imagery, for site scanning or inspections
»» 3D and 4D printing
»» Robotics
»» IOT sensors
»» Artificial Intelligence (AI)
All these above fall into the broad category of Digital Construction.
Digital Construction Theory can also be defined as an emerging

engineering management theory for Construction Project Life
Management, which build smart environment of the project construction
and operation, and improve and manage effectively all the processes
of engineering project in life cycle through technical innovation and
management innovation. It uses BIM (Building Information Modelling),
Internet of Things, Data Analytics, 5D Visualization, other advanced
network and information technology as implementation tools.
Why Digitalirals Construction?

It is a known fact that the construction industry is one of the least
productive industries. As per McKinsey study, given the construction
industry’s societal, environmental and economic importance, even
small improvements in performance will have a strong effect in all
three domains:
»» Societal: A mere 1% reduction in construction costs would
save society about $100 billion annually – a sum equal to the
entire global cost of cancer drugs.
»» Economic: The global shortfall in infrastructure capacity is
expected to reach $15-20 trillion by 2030. Closing this gap
could create up to 100 million additional jobs and generate $6
trillion a year in economic activity in the long run. Up to 30%
54
of this boost could come from improvements to construction

projects and to asset operations.
»» Environmental: By harnessing the capacity of the building
sector, many countries can cut emission rates cost-effectively
and achieve energy savings of more than 30%, according to
the United Nations Environment Programme.
Cultural Shift brought out by Digital

The most significant change these technologies enable is the
cultural shift. They bring everything closer and make the world more
connected. They aggregate data, streamline the way of working and
challenge the status quo.
These have given rise to disruptive new forms of business models

that were not conceivable in the past: things like Uber, Airbnb, online
video or Amazon same-day delivery.
For the construction industry, digital technologies have enabled new

ways of working that hold the mirror to a lot of our old practices.
It is a really exciting time for the construction industry. These

technologies are here to improve productivity and help to make lives
easier.
Applying the digital construction processes not only optimizes the

projects but also benefits the organizations.
Other industries have shown that first movers can build a sustainable
competitive advantage. In the construction sector, this is also likely
to be the case. Over the next decade, these winners of tomorrow will
take the lead in technology innovation and digitization.
Digitization of Construction Management

McKinsey Global Institute Industry report puts the construction
industry at the bottom of the digitized industrial sectors.
55
The construction industry is among the least digitized.
McKinsey Global Institute industry digitization Relatively low digitization Relatively high digitization
index; 2015 or latest available data
Relatively low digitization Digital leaders within relatively undigitized sectors
Assets Usage Labor
Overall Digitization
Digital Spending
Digital asset Stock
Transactions
Interactions
Business Processes
Market Making
on workers
Digital Spending
Digital Capital deepening
Digitization of work
Sector
Media
Professional services
Finance and insurance
Wholesale trade
Advanced manufacturing
Oil and gas
Utilities
Chemicals and pharmaceuti-
cals
Basic goods manufacturing
Mining
Real estate
Transportation and ware-
housing
Education
Retail trade
Entertainment and recre-
ation
Personal and local services
Government
Healthcare
Hospitality
Construction
Agriculture and hunting
Based on a set of metrics to assess digitization of assets (8 metrics), usage (11 metrics) and labor (8 metrics).
Information and communications technology.
Source: AppBrain; Bluewolf; Computer Economics; eMarketer; Gartner; IDC Research; LiveChat; US Bureau of Economic
Analysis; US Bureau of Labor Statistics; US Census Bureau; McKinsey Global Institute analysis
While most of the other industries have undergone tremendous

changes over the last few decades, and have reaped the benefits of
process and product innovations, the Construction Industry has been
hesitant about fully embracing the latest technological opportunities,
and its labor productivity has stagnated accordingly.
This unimpressive track record can be attributed to various internal

and external challenges: the persistent fragmentation of the industry,
inadequate collaboration with suppliers and contractors, the difficulties
56
in recruiting a talented workforce, and insufficient knowledge transfer

from project to project, to name just a few.
By digitalizing, construction industry will have transformative effect on

the wider society by reducing construction costs; on the environment,
by improving the use of scarce materials or by making buildings more
eco-efficient over time; and on the economy, by narrowing the global
infrastructure gap and boosting economic development in general.
The uninterrupted flow of data and communication at every stage of

a construction project is necessary for successful management of
the projects to overcome the generic flaws like project delays, data
inefficiency, broken communication and budget deficits.
The use of construction management software and other digital tools

form the basis for managing all aspects of a construction process.
Apart from the basic Project Management tasks, various features
including seamless time billing, invoicing options, collaboration tools,
custom reporting, and other business tools make operations of a
construction firm like a large-scale building or infrastructure projects
significantly more efficient.
Trailing Innovative Technology in

As per latest Mckinsey report the 10 most promising technologies,
which can improve the productivity and efficiency of the construction
industry by digitization, are:
1. Pre-fabrication and Modular Construction
2. Advance Building Material
3. 3D Scanning
4. Autonomous Construction
5. 3D Printing
6. GIS
7. Wireless Monitoring and Connected Equipment
57
8. Cloud and Real Time Data Collaboration

9. Big Data and Predictive Analysis
10. Augmented Reality
11. BIM
But do all these have equal impact on the construction industry?
Future of Construction Survey conducted a survey and an interesting

fact came to light that, contrary to belief, many much hyped
technologies have minimal or little impact on improving productivity.
Impact-likelihood matrix of new technologies
Externely Integrated BIM GIS

likely
Prefabricated building
Likelihood
components
Wireless monitoring (loT)
3D laser scanning
Drones Advanced project Real-time mobile
Augmented reality
planning tools collaboration
Advanced budding materials
New active materials
Somewhat
likely Big data analytics 3D printing of components
Self-healing materials
Not
likely Contour crafting of buildings
No Some Extremely
Impact impact impact
Source Future of Construct. Survey

Impact
For example, Drones have little direct impact but have a high
likelihood chances of improving the productivity, whereas 3D printing
of components and Big Data Analytics have high impact but lesser
likelihood of enhancing productivity.
58
As expected, the Internet of Things (IoT), Advance project-monitoring

tools, Real time mobile collaboration have both high impact and high
likelihood of improving productivity.
The surprise element is integrated BIM (Building Information

Management), which has extremely high impact and extremely high
likelihood to disrupt the construction industry. BIM is channelizing
every aspect from raw material to the model generation. Integration
with design software enables builders to update and publish
drawings easily and make them available to their subcontractors,
and Building Information Modelling fulfils the need for a digital 3D
design. Involvement with BIM accelerates the need for collaborative
tools, establishing smart buildings. The evolution of smart buildings
with features like adaptive energy systems, automated systems,
intelligent building management, assistive technologies, and remote
monitoring is also changing the workforce of construction industry
and project management.
With specialized processes like BIM, the planning, designing and

construction of a project without overlooking significant factors like
material and logistics, contract administration, cost control, and
project scheduling becomes feasible. With the recent adaptations
resulting in the streamlined workflow at all levels and higher profits,
the future awaits embracing information technology properly.
Such high rating to Integrated BIM shows that the construction

industry is heading towards its Uber movement. Flow of end-to-end
information, and collaboration with the entire project stakeholders
along with end users, is going to transform the industry like never
before.
BIM (Building Information Modelling) has many advantages but

simultaneously brings new challenges, which must be addressed, in
the contractual provisions.
The discussion around digital technologies is getting more and

more intense all over the world, and it is of great interest to see
59
which countries are leading the technological disruption game in the

construction field. The BIM is known as one of the game changer
technologies.
Many European governments including UK have already mandated

that the government projects should use Level 2 BIM.
In India, 5D BIM is being extensively used in Metro Rail Projects. But

in spite of BIM being already around for more than ten years now, it
still lacks higher-level uptake by industry.
So is BIM a disruptive technology of Constructive Industry? If so then

why adoption is so slow even after 10 years!
The frequent examples of disruptive technologies we are familiar with

include Airbnb, Uber, iTunes and Facebook. One may not be quite
sure that all of these actually meet the requirement for a ‘new market’
– how is the Uber market different from the taxi market? Similarly,
how is the Airbnb market different from the hotel market?
What do these kinds of disruptive innovations have in common and

how do they differ from architecture and construction? The key issue
is that almost all of these commonly discussed disruptive innovators
rely on the power of individual consumers and not government and
big business.
The key point is that they create a way of service or product delivery
that is completely different from what has come before, rather than
just being a little bit different cheaper, easier and more competitive.
There are reasons for the slow uptake of change in the construction
industry because the option of doing the things in older way way is
still there.
A little bit combination of BIM with traditional paper documents and

contracts is not going to work. It is not an all or nothing alternative.
60
The other reason is internal force of the construction industry itself:

the contracting, subcontracting, building materials, financing and
sustainability, etc. I will take up these internal factors of Construction
Industry in my next book : Digital Construction Management – Part -II
What about other aspects of technologies? Could robots and

prefabrication cause disruptive innovation in construction? Again,
these are technologies that have been developing for some time
prefabrication for probably over a hundred years now! Both offer
opportunities for efficiency gains in design and construction, like BIM.
Another opportunity of disruptive innovation in design and construction

seems to come from algorithms, through the form of software like
Google Flux, which automates building design, based upon site
conditions.
There is no reason why either the model or the documentation would

not be largely automated out of the software. While humans (as
architects) will always be involved in designing high quality buildings,
much of the work of architects could be automated.
Why should a human spend time drawing up all the details and
layout of a toilet when a computer could do it faster, and make sure
it meets the building code? The parts could then be prefabricated
or assembled onsite by robots, increasing construction efficiencies.
Developed outside the traditional markets, could Google displace
Autodesk as the primary software provider for building design and
be the disruptive innovator that changes the traditional delivery of
architecture?
What about disruptive innovation in construction itself? If not robots

or prefab, what could it be? Is disrupting design sufficient to disrupt
construction? Or are there other disruptive innovations out there on
the horizon?
61
To some extent, these four technologies

seem to disrupt the construction industry
at present
The industry is in desperate need of a disruption. Since 1945,
productivity (defined as the total economic output per worker) in
manufacturing, retail, and agriculture has grown 1500%, while it
has remained almost flat for construction, according to McKinsey. In
large part, this stagnation is a result of the industry’s unwillingness to
embrace innovative new technology. However, as these technologies
become more affordable and practical, the tide is beginning to turn.
1. Artificial Intelligence
In terms of project design and planning, artificial neural networks
(i.e., computer systems modelled after the human brain and nervous
system) are poised to make a huge impact - from initial design
modelling, to project planning, to performance diagnostics technology
is already taking on many tasks previously considered too dependent
on human. Combining the power of AI with augmented reality (AR),
tech can make it a more impactful onsite tool.
The future of AI-led design involves systems that accept any type of
input that a designer can produce it becomes collaboration with the
computer to iteratively target a high-performing design that meets all
the varied needs of the design team.
In other words, building design may soon be less about actual drawing
and more about specifying project requirements and parameters,
then letting the algorithms step in to connect the dots.
2. VDC Technologies
As everyone in the construction industry knows, the construction
process is an inherently complex and difficult one. Each project
requires extensive planning, a long list of stakeholders (architects,
engineers, project managers, owners, operators etc.), taking into
62
account the site’s unique environmental, regulatory, and structural

considerations, which can change at any given moment. When
unexpected issues arise, it can cause projects to miss important
deadlines, go over budget, or jeopardize the safety of the onsite crew.
Innovative virtual design and construction technologies like Building

Information Modeling (BIM) and Virtual Reality (VR) like Digital Twins
can help professionals to improve accuracy, safety, and efficiency at
all stages of the project lifecycle.
3. 3D Printing
Just imagine a world where materials for skyscrapers were printed
onsite instead of cast on site or delivered from prefabrication factories.
Though the industry is not quite ready for large scale production, 3D
printing in construction is generating a lot of buzz.
3D printing also opens up the possibility for building structures in

remote, potentially hostile environments (i.e. other planets), utilizing
their locally sourced resources as materials (i.e. Martian soil and
rocks).
4. Drones /Robots
The flying robots are incredibly useful for managing and inspecting of
the sites. Drones can survey a large location in a fraction of the time
that it would take to a human; it can inspect tall buildings with no risk
of harm and can provide high-resolution images of difficult to reach
locations to operators on the ground.
This timely data allows site managers to deploy resources without

delay, avoid potential risks, and maintain an accurate timeline for
project completion.
In reality, the question of which technology will have the biggest

impact on construction’s future isn’t really fair, especially considering
that, at least to a certain extent, each will be somewhat dependent on
the others to function properly and reach its full potential.
63
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Digital Construction Management: Glimpses of Construction Industry by Akhilesh Srivastava

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PART - I

GLIMPSE OF CONSTRUCTION INDUSTRY

The construction industry is perhaps the oldest industry in the Sapiens

Construction during primitive times consisted of huts made of mud

This activity eventually lead to proto-cities, putting an end to pastoral

Over time, humans refined their construction practices and started

Mesopotamia. The earliest constructions were huts and shelters

Traditional construction, commenced between 4000 and 2000 BC in

However, as population grew and urbanization took over, construction

The story of construction engineering is one of human progression.

Population growth and urbanization led to an increasing need for

Digitalization has changed the world in the last few decades.

At this juncture, when recently the World Economic Forum published

The construction industry is expected to grow immensely in the

There are mainly three segments in the construction industry like

Construction is a ‘horizontal’ industry (similarly the Financial Services

About 40% of solid waste in the United States derives from

Value therefore lies in improving the quality of construction and

Big Boost for Infrastructure Development

listed companies. The states and central government departments

But in the last few decades, the Government of India demonstrated

India is witnessing significant interest from international investors

India has a requirement of investment worth INR 50 trillion (US$

Growth Potential of Construction Industry

However, the industry’s future will be shaped by the following four

Market and Customer Trends

There is expected rise in global competition between the countries

Another challenging area of infrastructure is the ageing infrastructure

The vast ‘infrastructure gap’ cannot be bridged by public sector

Sustainability and Resilience Trends

Other new priorities are emerging accordingly, including optimizing

The industry also has to address growing concerns over natural

in an industry as decentralized as the construction industry, with so

Societal and workforce trends

An additional demographic trend, particularly in developed nations,

A further challenge facing the construction industry concerns the

to force the withdrawal of permits already granted. Communities are

Political and regulatory trends

Regulation impacts on many aspects of the Construction industry. In

The industry is especially affected by changes in health and safety

Next is the issue of bureaucracy and political risk. The environmental

Another constant issue is that of political instability. The worldwide

A new era of opportunities is rising. We have a rosy picture of the

But are we ready?

The construction industry is the second largest contributor to India’s

The latest MOSPI Flash Report October 2018, containing information

on Schedule Delayed without Date of Commissioning Ahead of Schedule

MOPSI – Project Implementation Overview –Aug 2018

Cost overrun: Total original cost of implementation of the 1452

Time overrun: During the reference month, out of 1452 projects,

An overview of the status of Indian Construction industry as evident

This necessitates the urgency of modernising the various sectors

Some of the big Challenges the

Requirement of Human Resources for Constructions 2022

Engineers 3.72 million man years

To sustain growth of construction sector; substantial addition about

Further, three more Engineering Colleges were opened by about

Indian Institute of Engineering Science and Technology, Shibpur)

Post-Independent India saw an exponential upsurge in the opening

According to All India Council for Technical Education (AICTE), the

In addition, the country has a massive shortage of various categories

The number of Industrial Training Institutes (ITIs) in India as on April

Another issue related with the curriculum is lack of adequate

Moreover, this is time of multidisciplinary education, where

3. Increasing Project Complexity

The solution will be a movement from labour intensive activity to

»» Fluctuation In The Prices Of Materials