Ecosystem pathways for smart construction

FROM the construction of smart buildings and infrastructure to its underlying technologies, the engineering and construction (E&C) sector has a crucial role to play in enabling Singapore to fulfil its ambition of becoming a Smart City. But while E&C companies have made some progress in adopting digital tools, increased digitalisation does not always equate increased connectivity.

During a recent roundtable discussion that Deloitte held with several E&C industry players in Singapore, we found that while connectivity, efficiency, and sustainability are among the top priorities for the industry leaders, the lack of a smart construction ecosystem - in which disparate players and their digital tools can communicate effectively with one another - continues to be the main roadblock standing in the way of them achieving these goals.

Amplifying collective network strength

Essentially, a smart construction ecosystem is formed when different E&C entities come together in meaningful ways to solve common challenges and meet shared objectives. Even so, ecosystems are much more than simply accumulating legions of partners or driving up the volume of use cases; in their best form, members co-innovate around common problems, looking for solutions that benefit more than one participant.

To harness the full cumulative network effect that would enable participants to drive greater value and higher performance, ecosystems must be built on a foundation of interoperability - typically, in the form of Application Programming Interfaces that facilitate the sharing of data and integration of functionalities on common platforms.

Ecosystems also tend to be driven by a single convener, or a player with the ability to bring participants together to develop capabilities through common platforms.

Broadly, there are four primary ecosystems in smart construction:

• Job site ecosystem

Job site alliances enable E&C companies to benefit from smart manufacturing and digital innovation capabilities of partners in other sectors. These include, for example, prefabrication and modular use cases with new material applications developed by startups and other research and development players.

• Supply chain ecosystem

Supply chain ecosystems support E&C companies in calibrating supply to demand and facilitating the storage and distribution of finished products to customers. For instance, through collaborative relationships with technology players, E&C companies can unlock productivity-related use cases in procurement and inventory management to reduce costs.

• Customer ecosystem

Customer ecosystems allow E&C companies to connect and engage with customers across different sectors for design and ideation collaborations. This, in turn, helps them gain valuable insights into how they can adapt their offerings based on their customers' real needs.

• Talent ecosystem

From employment service providers to apprenticeship programmes and technical training affiliations, talent ecosystems provide E&C companies with access to talent to create pipelines for skills and roles needed to support smart construction initiatives.

Pathways to an ecosystem approach

While E&C leaders recognise that the ecosystem approach works, they know that it is not easy to adopt. It requires deliberate effort involving executive commitment, intentional choice of partners, and ongoing cultivation of relationships and shared objectives.

A good development project that demonstrates a successful, holistic ecosystem approach is Singapore's Punggol Digital District (PDD) - the country's first smart business district that aims to demonstrate its smart nation ambitions.

The PDD sets an example, showing that E&C companies will need to consider the following pathways to unlock the full benefits of an ecosystem approach:

• Set up an executive team to drive the ecosystem approach

The role of the executive team is to focus on gaining easier and quicker access to digital capabilities and allow for flexibility to cater for division or location-specific nuances. For instance, a cloud provider or data platform could be decided at a corporate level, but there could be flexibility for different divisions or geographies to adopt different equipment based on their needs. In the PDD's case, the project draws from the expertise of its co-developers - JTC Corporation, GovTech and ST Engineering.

• Build the enterprise architecture for a connected construction platform

To support their strategic goals, E&C companies should build a digital enterprise architecture that not only includes their necessary core capabilities, but also reflects the use cases and corresponding technologies that drive them. This should be layered - where use cases are built onto consistent underlying technology platforms - to provide the flexibility for future use case expansion. The PDD's Open Digital Platform consolidates and shares the data sets collected by public agencies and then replicates these in the form of a "digital twin". Solution providers can test-bed their products and experiment on the platform without compromising the actual functions of the district.

• Adopt and maximise a strategic approach for ecosystem participants

E&C companies should consider applying the philosophy of strategic sourcing for their ecosystem approach and frontload the approach with strong relationship development. Like how the PDD has involved stakeholders from industry, academia and government, companies can choose to collaborate and form bi-directional relationships with partners who share their values, and agree on how value will be measured from these relationships.

• Determine which capabilities should be cultivated in-house

While external partners can provide quicker access to use cases, upskilling and upgrading select in-house talent and capabilities could help E&C companies to scale those benefits. Companies should determine what capabilities will differentiate their business and be deliberate about which capabilities they will source from the ecosystem's partnerships.

The path forward

While ecosystems have the potential to bring numerous benefits to E&C players, it must be noted that they come with challenges. Whether they are inherent to the development of external connections or come with managing them, barriers that could hinder the extraction of value from ecosystems include complex coordination efforts, lack of data protection and cybersecurity infrastructure, intellectual property theft, and heterogeneous capabilities across the ecosystem.

But these challenges are not insurmountable for E&C players. When properly mitigated with appropriate measures, the benefits of an ecosystem approach will likely far outweigh its costs. And as with all concepts that hinge on the cumulative network effect, acting sooner - rather than later - will be what differentiates leading E&C companies from the rest of the pack.

• The writer is Deloitte South-east Asia industrial products & construction sector leader.

This article is written in association with SwissCham Singapore's Digital Transformation Award 2021.