Why is it that in an era of online everything, the construction industry has been described as the least digitised industry?
Sure, the biggest hurdle to any kind of transition has probably been the fact we associate it, naturally, with manual labour, bricks and mortar.
Coupled with the equally undeniable fact it’s heavily regulated, we start to understand why this sector more than many others has been slow to embrace change, innovation or collaboration and rely on digital systems to move it forward.
Think about it – there are regulations regarding the raw materials themselves and the services involved in creating a safe built environment – electrical, gas, engineering – minimum standards and certification processes at different stages of a construction project affecting various component parts of the team…the list goes on.
And currently, each team operate comfortably in its ‘silo’, connecting with the others on an as and when basis, often with significant delays waiting for relevant site visits and paperwork. The system can best be described as ‘clunky’ with pockets of super efficiency and swathes of inefficiencies.
Somehow, everyone involved at the various stages makes it work – eventually, usually.
But there are glaring opportunities for significant improvements and I believe the time is right for a step change in the way the industry operates. It’s time to embrace change, stop burying heads in the sand and make a digital system work for this crucial sector.
If something as traditional as taxing your car can be digitalised, connecting various parts of the transport and insurance industries, and we can spend our leisure time connected to people half way round the world playing a game, it beggars belief that a handful of building service suppliers in the same town (never mind the opposite end of the country or further afield still), can’t sign up to a system that automates much of the red tape and bean counting that frustrates the success of the sector.
All the time talk around the built environment is focusing on smart meters, renewable energy, centralised heat provision, selling your own solar power back to the grid, etc, traditional ways of buying/selling such services are no longer sustainable. Companies, consumers, professional bodies, goods, gadgets and services need to be connected.
I read recently the perfect description of what’s required to make it all work effectively: ‘The Internet of Things needs a Ledger of Things’. Cue Blockchain.
Without going into the detailed technological make-up of this innovation, it allows data to be connected from a myriad of sources (each piece of data being a ‘block’) and enables transactions to be recorded, payments to be made, contracts to be established, verification of legal criteria to be conducted, industry standards fulfilled, markets to be accessed, scrutiny of a project’s progress to be conducted and many, many other processes beyond.
Blockchain can represent a transaction, verification, certificate granting, payment, contract, delivery, project sign-off, you name the process in a construction project, it can be represented in a digital format.
Like a physical chain, more and more links can be added and the beauty is, as nothing is held on a central database as such, it is virtually impossible to hack, experts tell us.
What’s not to love?
I can only imagine it’s individual sectors or companies feeling somewhat reluctant to share their data with others, wary of competition and giving too much away to rivals, uncertainty of placing everything in the ether rather than on the table or in a filing cabinet. In a nutshell, fear of the unknown.
But let’s take two key sectors here – construction and energy – and briefly explore what could be connected and how…
The clue is in the title of the technology…a series of ‘blocks’ or events, connected to one another forming a ‘chain’ of interconnectivity.
For example, when a contract is issued (block), the painter starts work (block), when that job is complete (block), certification is granted (block) and the next stage of a project can begin. A service can begin when payment for materials has been authorised (block). Hopefully, you’re starting to see the connection and how project teams, contractors and sub-contractors can be linked efficiently.
All stages of a project can follow the same pattern…design, monitor, approve, tender, install, certify and handover of the built asset all fit the bill and as each entity, service provider, has its own individual verified ID, the system allows for reputations to be built so you can work with people you don’t necessarily know but appreciate you can trust.
In addition, Blockchain accurately records amounts of materials required for certain stages of a construction project – enabling accurate re-ordering and thus less waste. Another green tick!
The digital system creates an auditable record of transactions and certifications of events in the life cycle of a building and allows users to add in all relevant details of contracts and how they will be classified as fulfilled, signalling the completion of one ‘block’ and green light for the next phase to begin.
In the energy field, there is a lot of chatter around decentralised grids, energy being sold directly between neighbours, the power of the consumer to switch provider with increased access to regularly updated tariff information and the widespread implementation of smart meters.
All of this, again, points to one solution – connectivity.
The beauty of Blockchain in this arena is that consumers can access metering and billing data instantly in a peer-to-peer system negating the need for intermediaries such as banks involvement.
Smart contracts can be deployed so that whenever more energy is generated than required, the excess is diverted automatically into storage and when not enough energy is produced, any held in storage can be used by customers.
In an age of increased provider competition, this seems like the ‘smart’ way forward, making energy prices more cost-effective.
The concept of regional energy suppliers and neighbourhood systems are in their infancy, but so, too, is Blockchain so there could never be a better time to partner up and grow together as two decentralised initiatives.
Ultimately, I’m sure it will be the power of the consumer that drives Blockchain forward to its full potential. Nobody likes being last to the party so once one or two established key players join the chain and shout about it to their suppliers and contractors, I’m sure others will follow, seeing the practicality of hashtags replacing handwritten notes, checking a screenshot rather than chasing their tail around countless suppliers.
Speed and efficiency are watchwords of 21st Century living. I’m convinced Blockchain will come to be a key enabler to guarantee their delivery.
Will you be signing up anytime soon? What are your hopes/fears about taking such a huge leap of faith away from your own password protected systems and tightly-locked toolbox? If it is to be consumers and industry leaders who make it happen, let’s at least start the conversation.
Get in touch, it would be great to hear your views as we shape the business etiquette of tomorrow.