Categories: Technology

Beyond Gimmicks and Add-ons: How Manufacturers Can Master Digitalization

Digitalization

Manufacturers of building products are striving to optimize their internal processes to be more competitive, innovative, and powerful. It’s no secret that embracing digitalization is the easiest way to achieve this novel goal. However, how does one optimize the process of optimization?

“In short, the digital transformation in construction, like in other sectors, must be a "proactive" one, rather than a reactive process plagued with complicated add-ons.”

Today, the word “digital” has a meaning way beyond computer hardware and software. While the digital transformation started primarily in industries like entertainment and communications, there’s not a single sector that’s untouched by the revolution.

From oil extraction to healthcare, all companies must have a robust digital infrastructure to be thriving global businesses. Construction, which remains one of the least digitized sectors in the world, is no exception.

How Software is “Eating” the Businesses

In a 2011 essay published by the Wall Street Journal entitled “Why Software is Eating the World”, American entrepreneur Marc Andreessen argued that by now, all companies have to be tech companies.

“More and more major businesses and industries are being run on software and delivered as online services — from movies to agriculture to national defense,” he wrote. “Companies in every industry need to assume that a software revolution is coming. This includes even industries that are software-based today . . . In some industries, particularly those with a heavy real-world component such as oil and gas, the software revolution is primarily an opportunity for incumbents.”

Mr. Andreessen’s observations align with construction: Digital ideas and services like BIM, drones, and laser scanning are already part of a modern building site. The application of other technologies like artificial intelligence, augmented reality, or the Internet of Things are booming too. These technologies are changing all phases of construction — and it’s an irreversible process.

New Business Opportunities Also Bring New Threats

The new digital models and technologies offer unique solutions and opportunities to companies. Tapping into these, construction businesses can become more efficient, profitable, and greener than ever. However, without the right treatment and strategies, digital transformations can pose new risks and threats.

Take Nokia: Manufacturing the world’s best-selling mobile phones at the beginning of this century, Nokia dominated the world from a small, namesake town in Finland. However, once the tech giant ignored the touchscreen technologies, things quickly went south.

Responding to these telltales, companies might come into enthusiastic conclusions in board meetings. “We must be more digital,” they might conclude, or, “Our products must be smarter.”

Digitalization Should Make Things Easier, Not More Complicated

Digitalization

It’s not uncommon for manufacturers to “react” to these innovations and incorporate impressive-looking add-ons and gimmicks to their business models.

As a result, it’s possible to see bizarre products in the market with seemingly impressive features but with little practicality or user-friendliness. For example, toothbrushes add value to daily life by helping people to maintain dental hygiene. However, by adding gimmicky features and “smart” add-ons, it’s possible to make this hygiene routine daunting.

Such attempts might discourage people from brushing their teeth regularly and achieve the opposite of what digitalization should be about: Making things simpler.

How Should Manufacturers Optimize Their Business Models?

Likewise, in construction, it might be tempting to “digitalize” a product by adding a new feature or opening a new marketing channel. However, add-ons and gimmicks on products often make them complicated and difficult to use, rather than adding value.

In the case of Nokia, the market gap of touchscreens that the Finnish company failed to see was quickly filled by others like Apple and Samsung. Fast forward to 2020, and touchscreens are so ubiquitous that it’s challenging to picture a world without them.

In construction, digital transformation managers must thoroughly understand their sector, analyze how people work together and how processes might change in the future. Innovations can stem from this understanding. These might include offering a new way of addressing new user groups, generating demand and creating new products, new partners, and new markets.

In short, the digital transformation in construction, like in other sectors, must be a “proactive” one, rather than a reactive process plagued with complicated add-ons.

A Holistic Change in Business Planning in Construction

The result of a successful digital transformation isn’t a single smart product or a fruitful adaptation of a new software program. It’s a holistic change in the entire ecosystem of a company that will have a positive impact on different phases of construction like planning, marketing, sales, and operations.

In construction, digital planning often takes place on the client’s side for manufacturers. Some might consider this as an “add-on” to the products that have to be present. However, these tendencies are slowly shifting. Products are pushed more and more to the background, and the role of services and new business models are becoming increasingly crucial. Digital will change from single, product-centric approaches to systems and solutions, that include several products and disciplines.

If digital tools like BIM facilitate a smooth experience for both businesses and clients, they’re unlikely to want anything less. Once the core digital structures of construction companies are in place, it’ll help them to build better, faster, cheaper, greener. Unlike a once-used gimmicky toothbrush, this is what digital transformation in construction is all about.

Dr. Kai Oberste-Ufer

Dr. Kai Oberste-Ufer

Kai is a civil engineer with a strong focus on IT and holds the position of Senior Manager for Digital Planning at dormakaba digital. With his work, he wants to answer the question: “How do we plan, build and operate buildings in the future and how can we better support this process digitally?”.