Four trends that are changing the climate of engineering and construction

In part one of this 2-part series, we address 4 industry trends and how to lay the groundwork for a sustainable future through unified operations. 

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A digital transformation blueprint for Engineering and Construction


Digital technologies are changing the way many Engineering and Construction (E&C) companies operate as intensifying pressures are driving companies to better plan, manage, and execute projects.

Intensifying Cost Pressures 

Costs for materials continue to increase as does difficulty in finding skilled labour. In an industry with a low barrier to entry, these pressures, in addition to heavy competition and digital disruption will continue to have a major impact on shrinking profit margins. Ironically, these cost pressures add even more stress on a company’s ability to reinvest in technology and best practices that are vital to overcome these challenges and innovate. 

According to Deloitte, during the first seven months of 2021, the prices of critical construction materials observed double-digit increases every month (YOY in August 2021). 

Industry 4.0  

Globally, Industry 4.0 companies plan to double their average level of digitization within 5 years from 33-72%. Adopting a new forward-thinking mindset is essential for E&C companies to capitalize on emerging digital opportunities. Implementing cloud technology to connect project planning and job sites makes vital information available on almost every aspect of a project, to all parties involved, anywhere in the world. This type of collaboration and ability to anticipate new trends and demands with readily available data is what will separate leaders from laggards. 

Supplier Integration 

From procurement and real-time inventory management to stronger collaboration and risk management, digitization of the supply chain leads to greater customer responsiveness, and ultimately higher revenue. Supplier integration enhances visibility and transparency, resulting in a more flexible and resilient supply chain. It also enables leveraging supplier relationships to innovate new and better ways of managing the product line and operating the business while balancing risk and cost optimization.  

A very telling 75% of E&C companies reported project delays last year due to longer lead times or materials shortage, and 57% experienced delivery delays. These are just two growing concerns, reinforcing the need to optimize processes and gain visibility wherever possible and control what can be controlled in uncertain times.  

Smarter, Greener Cities 

There is a global megatrend toward urbanization with projections that 68% of the world population will be living in urban areas by 2050. This presents tremendous opportunities for E&C companies that invest wisely in technology and bring digital capabilities for smart city planning to the table. The key is having a flexible digital ecosystem now that enables extensibility to collaborate with partnerships across the various capabilities and areas of expertise to present strategic, viable, cost- and time-efficient solutions. 

Laying the Groundwork for a Digital Foundation

Today’s emerging E&C leaders are those who have identified their immediate pain points in this complex environment before embarking on a journey of digital transformation toward a connected digital ecosystem to support growth. Here are three important considerations and industry best practices to get started: 


1. Identify needs

It starts by addressing internal needs and getting all ducks in a row. Proven ERP solutions like Microsoft D365 for Finance, Supply Chain Management, Project Operations and Customer Engagement are designed to modernize and integrate all systems and data in a single platform to streamline operations and optimize processes. This often entails replacing legacy ERP technology and implementing future-proof, cloud-based solutions. 


2. Partner up 

To help scope out needs and priorities and minimize disruption of day-to-day operations during this transitional time, it’s essential to partner with an established company that specializes in digital transformation for the E&C industry. From choosing the best technology to complement or replace existing systems, to designing a roadmap for quick wins and meeting longer-term objectives, to implementing the technology and onboarding users, there are partners who can blueprint the entire process, build customizable solutions, and support the initiative as needs change.  


3. Upgrade technology 

Accept the fact that your legacy systems were not built to sustain the demands of Industry 4.0 or scale for growth. Success for today’s E&C companies relies on highly flexible technology that can integrate old and new systems, unify disparate data, and streamline processes. These platforms are revolutionizing the industry, how things are designed and built, how teams are managed, how partnerships and collaborations are forged, and how customer experiences and relationships are evolved.