Kenny Ingram, Global Industry Director of IFS shares his thoughts on how the Australian construction companies can best manage labour shortages.
Despite a levelling off in activity, according to the Australian Construction Industry Forum’s latest trends forecast, construction companies are still struggling to keep pace with demand. The industry appears to have reached a turning point and is facing a number of major disruptive trends.
The most acute trends are the ongoing labour shortage and pressure on project margins. The entrance of new technologies – including BIM, drones, IoT, laser scanning, virtual reality (VR), augmented reality (AR), robotics, etc. – into construction has started and is gathering pace.
Global competition is also intensifying and we are seeing competition from new industry entrants who will do things differently. This will drive new business models such as construction-integrated manufacturing and servitisation where asset owners want a total asset lifecycle delivery partner.
The industry is generally conservative and risk averse and has been working in a traditional way, with low adoption of technology, for a long time. Only when companies accept the need to change, however, can they begin to address the challenges they face.
Overcoming the construction skills shortage
The industry is facing a major skills shortage at all levels, including both professional staff and direct trades that work on the construction sites. There are a number of initiatives that may help to reduce this impact:
- Using apprenticeships and other training schemes
- Drive improved labour efficiency supported by modern digital technology
- Make your organisation attractive to work for with a modern open culture
- Attract younger employees by embracing new digital technology
- Implement a modular or offsite manufacturing strategy
Transitioning from traditional systems to new technology
Most companies in the construction and engineering industry have a complex business system landscape often comprising over 100 different systems.
Because systems are not fully integrated, MS Excel spreadsheets pop up everywhere in the business and become the joining connection. The result is a lack of timely, trusted, accurate management information and huge inefficiency.
The goal should be to replace many of these systems with an integrated business system. The solution should be able to support traditional ways of working and then transition to more modern digital methods such as building information modelling (BIM) in a controlled way over time.
Gaining competitive advantages from an integrated solution
As a specialist in integrated project lifecycle management solutions, we have a number of customers who have replaced the majority of their existing non-integrated business systems with a modern integrated solution, allowing them to:
- Reduce IT costs
- Easily transition to a cloud solution
- Improve management information and governance
- Implement best practice and consistent business processes
One of our customers, Multiplex, a global construction company headquartered in Sydney, needed to address its top challenge of obtaining consistency across all the regions in which it operates, while still respecting regional nuances. Since implementing IFS Applications, Multiplex has increased its operational agility, has faster and more accurate reporting, and has streamlined its processes.
Platform for continual innovation
A modern integrated solution also creates a platform for continual innovation. With regular updates to the latest technology and industry business practices, companies can keep pace with change and stay ahead of the competition.
This enables transition to the new digital world and supports business transformation. If companies need systems to transition to construction-integrated manufacturing or servitisation, it is simply a question of adding the necessary software modules.
Despite the industry’s natural conservatism, many leading construction companies have accepted that change is necessary and are addressing today’s challenges with modern, integrated solutions that also prepare them for whatever is coming up next.
About the Author
Kenny Ingram is the Global Industry Director for Construction, Contracting, Engineering and Infrastructure at enterprise applications company IFS and a key member of its Product Direction Board. Kenny is regarded as one of the top specialists in project-based business systems and has been heavily involved in driving the IFS strategy in this area for the last 16 years.