Construction Technology Quarterly, Q4, 2020
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The document summarizes the key trends in construction technology, including: 1) There is high demand for construction technology driven by digital transformation in the industry. However, the construction industry is highly fragmented with most projects handled by small companies. 2) There is a large supply of construction technology companies, most providing project management and communication tools delivered via SaaS. Fewer technologies automate physical construction processes. 3) The document proposes frameworks for organizing technologies, including by their use case in the construction process and by their level of technical maturity. This can help construction firms adopt the right technologies.
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Construction Technology Quarterly, Q4, 2020
- 1. Construction Technology Quarterly Q4, 2020December 10th, 2020
- 2. Construction is Seeing Waves of Innovative New Companies “App Fatigue” 2(C) Hugh Seaton
- 3. Construction Technology Quarterly • Free, online resource: • What’s out there • Find companies • Ideas to help make sense of it all • Courses to upskill teams 3(C) Hugh Seaton
- 4. Contents 1. Demand for Construction Technology 2. Supply of Construction Technology 3. Frameworks and Technology Trends 4. Courses and Upskilling 4(C) Hugh Seaton
- 6. Demand: Digital Transformation 6(C) Hugh Seaton
- 7. Digital Transformation is the changing of a complex web of users, producers, regulators and markets. 7(C) Hugh Seaton
- 8. Past Digital Transformations • Electronics at Sony • Broadband at AOL • Advertising at BBDO • Training at my own company/Glimpse 8(C) Hugh Seaton
- 9. Electronics Was Simple Driver of change: Consumer Preference 9 Electronics Enabling Technologies Distributors Consumers (C) Hugh Seaton
- 10. Broadband Was Less Simple Driver of change: Ecosystem Readiness 10 BroadbandRegulators Telecoms Electronics Makers Content Makers Consumers (C) Hugh Seaton
- 11. Advertising Even Less Simple Driver of change: Buyer Pressure for Cost Disruption of Distribution 11 AdvertisingMedia Market Media Buyers Content Makers Analytics Techniques Clients Search (C) Hugh Seaton
- 12. Construction is Complex Driver of change: Consumerization of technology Contractor Competition 12 ConstructionOwners Architects General Contractors Trades Risk Contract Structure Unions Regulations Skill Standards Technologies (C) Hugh Seaton
- 13. “Software is Eating The World” - Marc Andreeson, Founder of Netscape and Andreeson Horowitz 13(C) Hugh Seaton
- 14. Start of Digital Transformation: Turning Physical Processes Into Software-based Workflows 14(C) Hugh Seaton
- 15. Digital Transformation Lessons Learned 1. Ecosystems change by hundreds of small decisions 2. A sense of clarity about what’s out there helps those decisions 1. We have to overcome “app fatigue” 3. Giving decision makers information and tools to make sense of it all makes decisions faster, better, more durable 4. Hearing from others in the same industry helps decision makers feel it will work for them. 15(C) Hugh Seaton
- 16. Demand: Some Numbers 16(C) Hugh Seaton
- 17. We Know It’s A Big Industry 730,000+ companies $1,300,000,000/year 17(C) Hugh Seaton
- 18. We Need To Stop Thinking Of Construction As A Single Entity 18(C) Hugh Seaton
- 19. Sharper Statistics 19(C) Hugh Seaton
- 20. $1.3 Trillion (US) Private Construction $971.1 Bn Non-Residential $440.8Bn Residential $530 Bn 20(C) Hugh Seaton
- 21. Public $380Bn State & Local $351Bn Federal $29Bn 21 $1.3 Trillion (US) 92.4% (C) Hugh Seaton
- 22. Is all Construction The Same? • Residential $530 Billion • Commercial $440 Billion • Public/Local $351 Billion • Federal $ 29 Billion 22(C) Hugh Seaton
- 24. Implication: That $440 Billion is Different All markets have leaders, leading segments Commercial leads, but is only 1/3 of the total market DPR/Mortenson do not need help with digital transformation Are we addressing the other 2/3? 24(C) Hugh Seaton
- 25. Loose Indicator: Top Firms Staff for Innovation & Technology 25 Approx Headcount Keyword: ”Innovation” Keyword: “Technology” BECHTEL 14,000 195 2,500 THE TURNER CORP. 10,000 176 1,500 AECOM 4,000 82 1,000 WHITING-TURNER 3,500 46 669 KIEWIT CORP. 9,000 101 1,500 MCDERMOTT 13,000 176 3,000 (C) Hugh Seaton
- 26. 470,732 112,709 67,572 43,558 13,004 6,162 1,358 391 155 < 5 5 to 9 10 to 19 20 to 49 50 to 99 100 to 249 250 to 499 500 to 999 > 1,000 155 Firms with 1,000+ Construction Companies by Employee Count 26(C) Hugh Seaton
- 27. 470,732 112,709 67,572 43,558 13,004 6,162 1,358 391 155 < 5 5 to9 10 to 19 20 to 49 50 to 99 100 to 249 250 to 499 500 to 999 > 1,000 Distribution of Construction Firm Sizes These Three Company types do not behave the same way. These Three Company types do not behave the same way. These three company types do not behave the same way. 27(C) Hugh Seaton
- 30. Industry Fragmentation by The Numbers ENR 400 = $374 Bn 29% of construction is by the 400 largest ENR Top 50 = $222 Bn (17%) 30(C) Hugh Seaton
- 31. Summarizing The Demand Picture • Roughly 1/3 of the construction industry is commercial • Commercial productivity less dire than construction overall • Most demand for most products will be from <400 potential customers • The remaining 2/3 of Construction is harder to reach, harder to convince, harder to ”transform” • This includes infrastructure, which is usually hard Design-Bid-Build 31(C) Hugh Seaton
- 32. Supply of Technology 32(C) Hugh Seaton
- 33. How to Organize Hundreds of Offerings? • Do we care what technology they use? • Or do we care what problem they solve? • Competition is based on customer problems, not technical solutions. 33(C) Hugh Seaton
- 34. Organizing For User Value • Layer one: the major job type • Layer two: the specific job • Layer three: the technology used • Layer four: the maturity of the technology used 34(C) Hugh Seaton
- 39. What Do We Find? 1. Not surprisingly, project management and team communication are the biggest categories. 2. Design a close second 3. Almost everything is delivered via web-based SaaS 1. Most have a mobile app, but are web- centric 4. Relatively few solutions are about putting work in place 39(C) Hugh Seaton
- 40. A Value Chain Framework Every process has an input, and an output. We string these together into a chain to produce value. Chris Mayer (Suffolk) proposed dividing technologies into those that are necessary, and those that directly add value. Putting Work in Place Project Initiation Design Estimating Submittals Scheduling Project Management Jobsite Management Inspections Closeout Facilities Management 40(C) Hugh Seaton
- 41. We Are in a Process Every digital transformation starts with the paperwork. Forms, accounting, communication are gateways to deeper transformation of who does the work, how we organize, what tools we use: 41 • People • Process • Technology (C) Hugh Seaton
- 42. Other Findings • Much better: • Tools to capture the jobsite – truly understanding and accessing what’s being, and already been, built. • Tools to collaborate & communication more richly than text. • Artificial Intelligence: • Showing up as services like voice and machine vision • These don’t require data to get started • A few less clear “machine learning/AI” powered offerings • Bunch of interesting approaches to reality capture, IoT, others 42(C) Hugh Seaton
- 43. CTQ Directory • Part of Construction Technology Quarterly • Comprehensive Construction Technology Database • Free • Not pay to play • Searchable by job, task & technology • Crowd-sourced tagging for better search 43(C) Hugh Seaton
- 44. Where This Goes Next • Sharing today as Google Sheet • https://bit.ly/ctq-public • Please comment with additions, corrections, ideas – whatever • Permanent Home: https://ctq.directory • Currently hosting forms: • Add your company • Request a free presentation like this • Searchable database published Jan 4th 44(C) Hugh Seaton
- 45. Framework #1: Mapping Technologies 45(C) Hugh Seaton
- 46. Wardley Maps • Simon Wardley, a tech CEO • Organize current and potential technologies • Tech maturity vs. distance from the customer 46(C) Hugh Seaton
- 47. 47 Closer to value creation Enabling Technologies Very New Very Stable (C) Hugh Seaton
- 48. Value Chain • Closer to value delivery the technology, the less we can tolerate customization and experimentation. • In Construction, that means the closer to the work of putting work in place – the core value delivery. 48(C) Hugh Seaton
- 49. Disruption • When a very new approach replaces a very stable approach • Wardley’s Genesis is where you go to disrupt processes with new technology 49(C) Hugh Seaton
- 50. Maturity • Different technologies can support different levels of ‘consulting’ and adjustment. • Simon Wardley liked to user four stages: • Genesis/experimental • Custom • Product • Commodity 50(C) Hugh Seaton
- 51. Loose Indicator: Where Construction Technologies Sit 51(C) Hugh Seaton
- 52. Framework #2: Service Oriented Architectures 52(C) Hugh Seaton
- 53. Breaking Up Software APIs are now very common – they are based on ‘contracts’ between software to exchange data. What if components within software talked to each other based on ‘contracts’? This has been called “Service Oriented Architecture” 53(C) Hugh Seaton
- 54. What Digital Technologies Do 1. Take in data 2. Do things to data 3. Send out data So how you organize the “doing things” and the “sending data” is crucial. 54(C) Hugh Seaton
- 55. Evolution of Systems Monolithic Software Islands Users Software Users Google API LinkedIn API AWS API API API API API Platform/iPaaS Software Software Software API API API Users 55(C) Hugh Seaton
- 56. Evolution of Systems: Service Oriented • What if you need to scale up some of the “things” and not others? • What if you need to scale them up fast, but then scale back down? • What if you want to change how one function works, but don’t want to risk the whole system? 56(C) Hugh Seaton
- 57. Evolution of Systems: Service Oriented • Separate functions into micro- functions, treat them like a service. • Put them into containers, virtual machines you can just copy. • Make them talk to each other like APIs – standard ‘contracts’. 57(C) Hugh Seaton
- 58. Service Oriented, or Micro-Services • Why this matters: • Micro-services take more work, but are much more scalable • Easier to support with different teams • Easier to integrate with different systems Functions Functions Functions Functions Functions Functions Functions Functions Functions Users 58 Most early products have to be a monolith, but mature products will often be a micro service. (C) Hugh Seaton
- 59. The Next Stage: Service Mesh • Microservices are internal to an application • What if you could do that for all the functions and applications on your system? • Service mesh that automatically responds, manages itself, and dramatically optimizes cost & performance. 59 Check out istio.io, AWS or Mulesoft to learn more (C) Hugh Seaton
- 61. Procore.org • Fantastic program of learning, courses and culture change • I was honored to write (and star in!) the Data in Construction Series 61 https://www.procore.com/data- construction-series (C) Hugh Seaton
- 62. 62 Primer on software and tech (on amazon now!) Talking with tech leaders www.constructedfutures.com (C) Hugh Seaton
- 63. Strong Community Doing Amazing Things 63 Many More (C) Hugh Seaton
- 64. MCA Chicago Blue Collar Labs The Digit Group Supporters (C) Hugh Seaton
- 65. Special Thanks to Giana Bartko Fordham 2022 65(C) Hugh Seaton
- 66. Thank You 66 https://ctq.directory (C) Hugh Seaton