The construction industry is broken. What will it take to make radical change in our industry? According to a recent McKinsey & Company report, 98% of mega-projects are over-budget or delayed. The average cost is 80% higher than the original contract value and on average projects are delivered 20 months late. In no other industry would delays and overruns to that extent be acceptable. Why is this just standard practice in construction?
Meanwhile construction productivity continues to decline, the same report shares in the last 20 years, construction productivity declined while manufacturing productivity has increased over 50%. Additionally, based on the consumer price index, construction costs are increasing faster than inflation, while automotive costs are decreasing relative to inflation. This trend is not sustainable.
The construction industry is failing because of poor organization, inadequate communication, short-term planning, insufficient risk management, increasing project complexity and misaligned interests. The lack of digitalization of the construction industry only exacerbates the issue. Of global industries, construction is the second least digitalized industry behind hospitality, healthcare, and government (Mckinsey&Company). True digitalization of the construction industry could dramatically improve its overall effectiveness.
Technology Changes - So Must We
Consider for moment the advances in technology over the last 30 years: the fax machine, personal computer, internet, e-mail, and cell phones. But construction has had no significant improvements in productivity. What about the last ten years: smart phones, tablets, cloud computing, drones, and laser scanning?
Yet, no significant productivity improvements have been realized. 3D printing, virtual reality and automation are coming of age, yet without a dramatic shift, these technologies will not provide any productivity improvements. Until we are willing to give up antiquated processes and technology, we will not have any significant productivity improvement. Consider all the technology that has become obsolete around your home: VHS, CDs, DVDs, iPod, and standalone GPS. What about your business? Fax machines have been obsolete for several years, but many of us still pay $2,600 a year on average to maintain the fax number on our business cards. What other technologies do we have just laying around taking up valuable resources.
As the pace of invention continues to increase, we must give up the old technology to advance the overall industry. The worst offender is using paper as the primary communication tool for facility information. Consider for a moment the advancement that was to have taken place with the adoption of BIM. Despite many companies now using BIM, few are using BIM for more than design authoring and coordination. Even then, the model is “dumbed down” to 2D paper representations of a facility. The 2D paper representation has been around since antiquity. In the 21st century, when will we stop using a 3000-year-old technology to communicate facility information? Simply stated, the construction industry needs to give up its addiction to paper and go paperless!
Going paperless is not about saving trees (even though about 2 of every 5 trees are harvested for paper production), rather it’s about improving our effectiveness. Going paperless as an industry would provide a shared goal for the industry that forces us to think differently about our processes. Some of the benefits of going paperless include:
- Improved organization
- Increased communication
- Greater mobility and flexibility
- Fewer errors
- Cost savings
- Increases of productivity up to 50%
- Reduction of storage space cost by up to 80%
- Less stress and clutter
My Paperless Journey
For me, going paperless started as a personal journey to free myself of the stress and clutter of my “to-do list”. Prior to 2015, paper covered both my work and personal life. In fact, it got so bad that my colleagues pranked me, by covering my walls with sticky notes.
After my office was sticky noted, I began to intentionally remove paper from my life. I did this by identifying which of my workflows used the most paper. These included file storage, notetaking, tasks, and construction plans. By the end of 2015, I had printed less than 20 sheets of paper and was less stressed, less forgetful, and able to locate information more quickly. Overall my life was much simpler and more focused.
It’s Not Just Me
Countless others have also seen the benefits of going paperless. In my research, I have discovered numerous organization moving to digital plans and specs. Kristen Earnst of Whiting-Turner, shared how her projects have gone from printing tens of thousands of sheets per project to just a few, which enables real-time updates, more efficient processes, reduces risk and improves productivity. Recently, MBP’s HR department decided to go completely paperless. Julie Detwiler, the HR director, explained how going paperless has improved the team’s overall attitude. She stated, “every single day we notice new ways that being paperless saves us money.” She explains that being paperless forces her to rethink her processes and remove duplicated effort.
“Dive in and don’t just try to do it with some parts of the project. It’s either all or nothing to promote the strategy amongst the team.” - Tyler Donner, Barton Malow
Barton Malow recently completed the $400 million Daytona Rising design-build project paperlessly. To allow for greater efficiency during the renovation of Daytona Motor Speedway, Barton Malow implemented digital processes via cloud storage, Wi-Fi, tablets, smartboards, and cloud-based PDF tools. While the paperless efforts did save time and money, the ultimate goal of improving communication and collaboration on the mile-long project was achieved. When asked what recommendations they would give to others going paperless, Tyler Donner (Barton Malow’s PM) returned, “Dive in and don’t just try to do it with some parts of the project. It’s either all or nothing to promote the strategy amongst the team.”
What's Stopping Us
We often hear about how going paperless is impossible because of antiquated processes, the cost, and people who work in construction. I would like to take some time to address each one of those: Some of those antiquated processes include regulations, permitting, and client requirements.
As for regulations, the American Bar Association has had guidelines for digital signatures in place since 1996. Yet today, we are only beginning to adopt them. With regards to permitting, numerous municipalities are moving to online digital permitting. As for client requirements, it is an opportunity to improve your overall relationship with your client and help them become paperless.
It is important to understand how much paper is costing us. Per Pricewaterhouse Coopers, the average employee prints 10,000 sheets of paper per year; of which 45% ends up in the trash by the end of the day. The cost of storing those 10,000 sheets in a four-drawer filing cabinet is between $1,500-$2,300 annually. The cost of storing the same data in the cloud is negligible, in fact 450 filing cabinets worth of data can be stored in the cloud for around $100 annually.
It is true that the culture of construction, and its people, are slow to change and adopt new ways. However, transformation of culture and people is best accomplished through creating a shared goal, such as paperless, and finding a champion. Even if he or she needs help with the technical, it’s best when the champion has a wealth of industry knowledge and can communicate to others how going paperless has improved their overall effectiveness.
As Creighton Abrams said, “when eating an elephant take one bite at a time.” As with eating an elephant, to transform construction we must start with small deliberate steps. To begin to shift your organization towards becoming paperless, start with yourself. Make it personal, and be the change you wish to see in the world. Identify your reason, your story, for being paperless. From there, you can begin to influence others and help them find their story. As Derek Sivers said in his 2010 TED talk, “remember the importance of nurturing your first few followers as equals so it's clearly about the movement.” Once you have your first few followers you can scale. Start now, look around you! What paper is cluttering up your life. Identify how you are going to eliminate it.
A Paperless Moon
Kennedy in 1961 said, “We choose to go to the moon in this decade… not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills.” My hope is that as an industry we can use paperless to organize and measure the best of our energies. The construction industry is ripe for transformation, can we use being paperless to unite us towards a common goal. And before this decade is out, transform ourselves, our organizations, and our industry. Our Moon is an industry where paper is no longer the primary medium for exchange and communication of facility data, information, and knowledge. You have two years.