Uncovering the ROI in a Common Data Environment

Construction technology could raise productivity by 14%-15% within the next decade, reducing project costs and increasing return on investment.

With construction technology set to revolutionize the industry, Asite explores the impact of adopting a Common Data Environment (CDE) on productivity and profit across the asset lifecycle.

Asite’s latest report, ‘Uncovering the ROI in a Common Data Environment,’ will take you through:

- COVID-19 Accelerates Digital Uptake
- How a CDE Creates Order Out of Chaos
- How a CDE Can Solve Problems Plaguing Your Organization
- Do you have the right solution for your construction business?
- 10 Question to Discover if a CDE Right for Your Construction Business

At the end of this report, you will have a step-by-step process for evaluating your current processes and help evaluate the return on investment when implementing a CDE.

COVID-19 Accelerates Digital Uptake

The COVID-19 pandemic proved the construction industry is resilient and capable of adapting to new ways of working. Construction companies rolled up their collective sleeves and sent office workers home to work remotely. They prioritized safety protocols across construction sites—all while keeping projects moving forward.

Despite being known as slow moving when it comes to digital uptake, construction was among the biggest contributors to the 0.9% output per hour rise in productivity in the UK during the pandemic, according to the Office of National Statistics.

This news is impressive considering a 2017 McKinsey & Co. report showing construction was the second-least digitized sector. The report noted if construction productivity were to catch up with the total economy, it could boost the sector’s value by an estimated $1.6 trillion.

Construction is constantly improvising and improving its tools of the trade. Whether adhering to BIM standards or forgoing fax machines and paper blueprints, the construction industry has made great strides in adding technology both on-site and in the office during the last two decades. Technology has reshaped the way we build—from drones to robots to 3D printed buildings on construction sites—to more efficient workflows and streamlined processes in the office.

The pandemic only increased the industry’s digital uptake.

However, all this new technology and captured data has created a degree of chaos as disparate and siloed ways of working continue to plague the industry. Many organizations struggle to manage their technology stack. They add tools to solve one issue and end up creating a ripple effect of additional problems. If tools don’t play well with one another, it results in cumbersome, inefficient processes.

As a result, employees grow frustrated having to retype procurement invoices, deal with manual input errors, or spend hours searching for the most up-to-date documents.

How a CDE Creates Order Out of Chaos

A single construction project produces massive amounts of data and information. However, in many cases, the data isn’t accessible and reliable. Maybe the latest designs and drawings are in an email sitting with a project manager who is on holiday. Or a snag was noticed on-site and never documented.

Your construction business needs to make sure the right information is updated throughout the project and is in the hands of the right person at the right time. Seeing a quick status or project snapshot should not be time-consuming and frustrating. Not being able to communicate snags promptly leads to delays. Or not being able to see a document is waiting for approval leads to bottlenecks.

Simply put, a Common Data Environment (CDE) is your best answer to taming the chaos swirling around any construction project. A CDE can make sure everyone has the most recent information in real-time—from the field to the office. In the most basic terms, its central repository provides a single source of information for the project. It is used to collect, manage, collaborate, and share project information with the project team.

Most importantly, with this accuracy and efficiency comes cost savings. For example, a recent KPMG report suggests a CDE is so vital to productivity that between £5.10 and £6 of direct labor productivity gains could be made for every £1 invested in information management, with between 1.6% to 18% cost savings possible at different asset lifecycle stages.

A Common Data Environment will:

- Create a flow of information lasting throughout the asset lifecycle
- Create a central and secure repository for managing your supply chain
- Provide a single source of integrated project information and simplify the construction ecosystem
- Centralize your knowledge base, record analytics, and allow all project members to feed into a central hub
- Ensure all stakeholders work within the same collaborative environment
- Enhance decision-making, create more advanced procurement systems, stamp out waste, and prevent a wide range of issues from cropping up cycle stages.

Let’s take a deeper dive into how a CDE can solve problems plaguing your organization—from design to tender to build. We’ll also dig into what questions you should ask to build a case for a CDE.

The Problem: Missing Project Information

If you’re not using collaborative technology, you're likely digging for documents. During the design and engineering phase, documents are held within network drives which are time-consuming to navigate at best and impossible to penetrate at worst. The same document may be held in multiple locations, with complex folder structures hindering accessibility.

You waste time searching for the right document, without knowing whether you’re working on the most up-to-date version and sending drawings to stakeholders manually. This is particularly troublesome if you are required to ensure a clear audit trail when working with the industry-standard—ISO 19650.

Correctly managing this stage of the asset lifecycle is vital, as changes to design further into the project can lead to, in some cases, an increase of between 5% and 40% of project costs, according to the Civil Engineering Journal.

The Solution: Improving Information Flow

You never want to create inaccessible information or design in isolation. You need to make it easy to share information across all project stakeholders at all stages. An ISO 19650-compliant CDE ensures all stakeholders across design, manufacturing, construction, and operational processes work from the same information at the same time.

Implementing a CDE creates a flow of information lasting throughout the asset lifecycle, allowing stakeholders to review iterations at every stage in the cloud collaboratively. This can have multiple benefits, including a quicker sign-off and approval process, resulting in on-site work starting sooner.  

You also can encourage the repeatability of processes. For example, you can use a cloud-based CDE platform to ensure off-site components are manufactured to meet set standards. When they work with the most up-to-date approved designs with precise specifications, you can rest assured the components will fit when they arrive on-site.

According to the McKinsey Global Institute Report, refining design and engineering practices can improve productivity by 8%-10%, with a cost-saving of between 7%-10%.

The Problem: Poor Procurement & Supply Chain Management

McKinsey’s Global Purchasing Excellence Survey describes the construction industry as one of the least sophisticated sectors in procurement and supply-chain practices, with poor management accounting for, on average, 10% to 30% of the cost and time overruns.

For starters, managing a complex project while leaning heavily on email is a challenge. From invitation to tender and beyond, you will struggle if you are using email to send documents back and forth between the project manager and suppliers. The result? Information gaps and way too many emails until the invoice is sent and payment made.

With low email capacity also comes the tendency to send sensitive documents via third-party file hosting services, putting information security at risk. Accurate tracking and auditing become complicated when this occurs across multiple tenders as you interact with countless suppliers.

The bespoke nature of this process also makes managing the contract process—for NEC3/NEC4 and other contract types—both difficult and time-consuming.

How will you ever collate all contract data in a single, simplified view to see if the project is running as planned? Plus, this lack of transparency and inability to plan creates issues further down the line.

The Solution: Standardize Your Repository & Processes

Implementing a CDE creates a central and secure repository for managing your supply chain. As such, all preferred suppliers can be notified of new tender opportunities, all receiving the same information simultaneously. Here, suppliers can register their interest, saving the procurement team time on costly follow-ups.

Interactions between project owners and the supply chain become streamlined as the tendering process, and all subsequent engagement occur within the CDE. Not only does this enhance productivity, but it also mitigates risk.

As seen in other industries, introducing standard procurement tools help to optimize the entire process. These tools and processes—such as clean-sheet cost models, robust clean sheeting, and “should-cost” models, alongside forward planning and standardized specifications—can enhance transparency across procurement and improve communication between supply chain members.

Integrating these tools and processes within a central procurement management system and adopting an integrated approach will improve project efficiency and reduce costs.

According to McKinsey, if you implement strategies to solve collaboration issues and improve procurement and supply chain management, you could see productivity grow by 7% to 8%, with a cost-saving of between 3%-4%.

The Problem: Engrained Lack of Collaboration

Typically, a construction project will bring together multiple stakeholders, widely dispersed supply chains, and large delivery teams—all of whom are working together for the first time.

Even worse, it may be centered around one-off projects and temporary relationships. The result is fragmentation, incoordination, and isolation—leading you to repeat errors if you never transfer knowledge from one project to the next. This is often the case when a wealth of knowledge remains with individual project members and is not widely shared.

An engrained lack of collaboration is complicated when disconnected systems don’t talk to one another. The industry relies on bespoke software tools, which means stakeholders across the asset lifecycle use different platforms, which do not share information. Here, teams frequently use tools that don’t always produce information in an open format, increasing your risk of making decisions based on outdated or inaccurate data.

This lack of collaboration creates information chaos where no single source of truth is established. This fragmentation has a significant impact on productivity and prevents the critical mass required to enact real change.

As it stands, an estimated 10%-25% of project costs, equal to £20 billion a year across the UK sector, are thought to come from avoidable errors and unmeasured and indirect costs, according to the Get It Right Initiative (GIRI). Improving collaboration could help to reduce this avoidable waste, thus creating a huge cost saving.

The Solution: Create a Single Source of Information

To improve collaboration and prevent costly errors, you need a platform your entire team—design, procurement, and supply chain—can use. Instead of using their own systems, a central system—a CDE—can provide a single source of integrated project information and simplify a complex ecosystem.

Even better, a CDE can be cloud-based and mobile—linking those in the field with those in the office—so information can be shared bi-directionally and be accessible in real-time. All tasks are housed within one single, secure environment with open information sharing regardless of location.

Using a CDE, your company can centralize its knowledge base, record analytics, and allow all project members to feed into a central hub. Dependence on a single project member is eradicated, so lessons learned on one project can be used on the next. By utilizing such analytics, your project teams can benchmark current work against previous projects to improve their quality of work.

According to one of the biggest infrastructure groups in the UK, Balfour Beatty, increasing collaboration overall leads to “better project outcomes, the more efficient delivery of schemes, improved business performance and greater client satisfaction.”

Using collaboration tools across the asset lifecycle could result in you saving 20% on your overall project cost.

The Problem: Lack of Digital Uptake & Disparate Tools

Despite proven examples of construction companies using digital technologies and achieving significant productivity gains, businesses are consistently underinvesting in the technology and digital tools to increase productivity.

If your digital tools do not share information, you will find information quickly goes missing. Documents will get lost in an impenetrable maze of shared folders, never to be seen again, or updates to an asset model will fail to get accurately communicated to those on-site.

Part of this issue is due to a reliance on paper. Traditionally, many in the construction industry have relied on 2D drawings, which are inherently prone to human error and do not include the same level of data as models provide. BIM—3D, 4D, and 5D—is a more cost-effective, consistent, and efficient construction tool.

4D BIM allows you to add an additional layer to your 3D model in the form of time. It enables you to visualize your model over a set period. As gradual layers are overlaid onto the model, you can see the different stages of the building process, ranging from the building’s structural foundations to the roof, and every stage in-between.

Meanwhile, 5D BIM allows you to incorporate cost management onto the model. Here, you can automatically pull quantities and elements directly from the model, removing the need for expensive and time-consuming manual counting.

The Solution: Embrace BIM & Advanced Analytics

By making 3D BIM universal across your business and supply chain, you can ensure all stakeholders work within the same collaborative environment. This means a single source of truth is facilitated, enhancing collaboration and visibility.

Mobilizing 4D and 5D BIM across the asset lifecycle will help to add “extra layers” to the typical 3D representation. With cost and schedule overlays, models become a powerful visualization and project management tool throughout the asset lifecycle.

When you implement digital technologies on a project, an increased amount of data and information is collected. As such, advanced analytics can be applied to this data to enhance decision-making, create more advanced procurement systems, stamp out waste, and prevent a wide range of issues from cropping up—such as identifying bottlenecks or delays.

These advanced analytics can then be visualized within a CDE. With the right tool, workflows, reports, and dashboards can all be created. Here, information from the various tools and software can be collated to provide better visibility across the project. This makes it easier for you and your stakeholders to monitor project progress and make informed decisions.

When you increase digital uptake and implement construction technologies throughout the asset lifecycle, McKinsey predicts you could improve productivity by 14% to 15%, with a cost-saving of between 4% to 6% on a typical project.

Making Your Business Case for a CDE

Let’s recap. A single construction project occurs across an extended period and has many different stakeholders and processes—some efficient and some not. Unfortunately, these different players tend to work in a variety of formats, such as Revit and 3D Repo.

This produces a vast amount of data and information, often unstructured, uncoordinated, and inaccessible. This lack of efficiency could add 20%-25% to the cost of a project. For example, a project with a construction value of £250 million could see an increased cost of between £50 million and £62.5 million.

The key to saving time and money is to transform your data from disorderly to well-structured. Not only does a CDE help achieve this, but it also enhances productivity—helping stakeholders to work in a more streamlined and collaborative manner—while having tangible benefits to your bottom line. It is also easy to see the ROI considering how technology can improve productivity and increase revenue while having little to no impact on cost. 

With a CDE, everyone from the architect to the estimator to the site foreman can work from a single source of truth with all information stored in a secure and interoperable digital environment—not a dusty old filing cabinet. The benefits to you and your supply chain are immense—from streamlined processes to stronger collaboration to shared project visibility.

In addition, your CDE can support ISO 19650 compliance—the international standard of good practice, which name CDEs as the gold standard for managing project information when multiple parties are involved. 