How Automation will Drive the Future of AEC Work
The Secret of AEC Industries to Rise Above the Pandemic
Business technology has massively reshaped the AEC (architecture, engineering, construction) landscape—and automation promises to change it even more. Just in time, too, as the need for change has become increasingly urgent given the COVID-19 pandemic!
A McKinsey estimate finds that artificial intelligence, machine learning and robotic process automation (RPA) may affect one-third of the activities in 60 percent of all occupations.[i] The potential for automation may be highest in the manufacturing, hospitality and retail sectors, but the technology excludes no industry or pay grade.[ii]
As far as the AEC workforce goes, RPA solves workflow problems for both low-skill labor and high-paying executive ranks. Everybody—from construction foremen to architects to executives and CEOs — stands to benefit.
RPA’s Cascading Series of Positives
RPA gives us a capsule look at the future of automation in the workplace. This technology takes over many repetitive, rules-based business processes, freeing workers to do more high-value labor.
In RPA, software called “bots” automate manual steps in certain processes, replacing formerly human-driven actions like parsing Excel spreadsheets and pushing routine mouse clicks.
This leads to a cascading series of positives for companies willing to invest in RPA: increases in productivity, reduction of error rates, and a leap in processing capacity for starters, leading to an overall reduction in business costs of up to 70 percent.[iii] And as more employees are freed from repetitive, brain-numbing work, workplaces enjoy increased job satisfaction and employee engagement across the board.
No wonder the market for RPA’s benefits has increased exponentially, and will only increase further as the pandemic forces companies to adapt. Gartner Inc. predicts that 85 percent of “large and very large organizations” will have adopted some form of RPA by 2022.[iv] Spending on RPA for 2020 alone is estimated to climb to $1.5 billion.[v]
Industry Implications of Automation
The benefits of RPA (and automation at large) affects certain sectors more than others, particularly those whose workflows rely heavily on both human input and data management.
A McKinsey study found low adoption of automation in the AEC sector, ranking 11th in 12 surveyed industries. All 12 industries were projected to significantly increase AI expenditure over the next three years—but the AEC sector is expected to lag for a good while yet.[vi]
Pandemic-induced labor issues, among others, may compel the AEC sector to speed adoption.[vii] RPA offers great promise for firms looking to accomplish more work with less workers. Use cases in the AEC sector are currently optimizing paperwork and reporting tasks formerly left to employees; both employees and management have benefited from the transition.
Some early-stage examples include:
Invoicing: one unnamed engineering and construction firm reported cash flow problems due to Days Sales Outstanding (DSO) delays caused by inaccurate invoices.
It took RPA consultants eight weeks to design and implement a solution that reduced invoice creation time from 4.5 hours to 11 minutes. The RPA process now does the work of 20 full-time employees, who are now free to focus on more value-added services. For an annual cost of $150,000, the RPA solution has improved the company’s cash flow by eight figures.[viii]
Document input and review: RPA is now a common component of construction sites managed by Samsung C&T’s Engineering and Construction Group: “Six tasks have already been automated,” explains Samsung’s Kim Hyo-hwan. “This number is expected to grow to 12 in the first half of this year.”
RPA implementation has increased the Group’s capacity by freeing up manpower to focus on examining blueprints and checking materials and equipment. Robots are left to do the simple, repetitive tasks of document review and data input.[ix]
Inevitable Benefits of Automation
As the pandemic forces digital change throughout the business world, the AEC sector will have to figure out what kind of automation provides optimal ROI.
A cross-sector 2018 Deloitte study found that businesses’ RPA implementations provided an average 20% of full-time equivalent (FTE) capacity, with a full return on their investment made in less than 12 months and improvements in “compliance (92%), quality / accuracy (90%), productivity (86%), cost reduction (59%)”.[x]
Individual workers often fear being displaced by automation. But far from increasing unemployment rates, data shows that the productivity gains provided by RPA in particular have not led to broad job losses; a 2017 study by the Information Services Group (ISG) found that RPA-driven productivity gains have enabled companies to redeploy their workforce instead.[xi] And data from the World Bank shows that technology replacing routine work has actually created more than 23 million jobs in Europe from 1999 to 2016.[xii]
Digital change through automation is inevitable, and the COVID-19 pandemic means it will come sooner rather than later. As its track record indicates, automation promises AECs less to fear and more to look forward to in the future.
References
[i] Manyika, James et al. "Jobs lost, jobs gained: What the future of work will mean for jobs, skills, and wages." McKinsey & Company. McKinsey & Company, November 2017. https://www.mckinsey.com/featured-insights/future-of-work/jobs-lost-jobs-gained-what-the-future-of-work-will-mean-for-jobs-skills-and-wages.
[ii] McKinsey Global Institute. "Where machines could replace humans - and where they can't (yet)." McKinsey & Company. McKinsey & Company, January 15, 2017. https://public.tableau.com/profile/mckinsey.analytics#!/vizhome/AutomationBySector/WhereMachinesCanReplaceHumans.
[iii] “Robotics and intelligent automation.” EY. Ernst & Young Global Limited, June 7, 2018. https://www.ey.com/Publication/vwLUAssets/ey-robotics-and-intelligent-automation-power-of-human-and-machine/$FILE/ey-robotics-and-intelligent-automation.pdf.
[iv] "Gartner Says Worldwide Spending on Robotic Process Automation Software to Reach $680 Million in 2018." Gartner Newsroom. Gartner, Inc., November 13, 2018. https://www.gartner.com/en/newsroom/press-releases/2018-11-13-gartner-says-worldwide-spending-on-robotic-process-automation-software-to-reach-680-million-in-2018.
[v] Le Clair, Craig. "How Automation Is Impacting Enterprises In 2019." Forrester. Forrester Research, Inc., April 23, 2019. https://go.forrester.com/blogs/predictions-2019-automation-technology/.
[vi] https://www.mckinsey.com/business-functions/mckinsey-analytics/our-insights/what-ai-can-and-cant-do-yet-for-your-business
[vii] "Hong Kong facing shortage of 10,000 construction workers - and MTR is suffering." SCMP.com. South China Morning Post Publishers Ltd., retrieved 2020. https://www.scmp.com/news/hong-kong/article/1519855/hong-kong-facing-shortage-10000-construction-workers.
[viii] "Engineering and construction firm leverages RPA to transform billing operations." isg-one.com. ISG, retrieved 2020. https://isg-one.com/consulting/automation/articles/engineering-and-construction-firm-leverages-rpa-to-transform-billing-operations.
[ix] "Automated bots are changing workplaces." Samsung C&T. Samsung Corporation, Feb 27, 2020. https://news.samsungcnt.com/automated-bots-are-changing-workplaces/.
[x] "Deloitte Global RPA Survey." Deloitte. Deloitte Touche Tohmatsu Limited, 2019. https://www2.deloitte.com/bg/en/pages/technology/articles/deloitte-global-rpa-survey-2018.html.
[xi] "ISG: RPA Increasing Productivity, Not Job Losses." Cision PR NewsWire. Information Services Group, Inc., May 3, 2017. https://www.prnewswire.com/news-releases/isg-rpa-increasing-productivity-not-job-losses-300450630.html.
[xii] "World Development Report 2019: The Changing Nature of Work." World Bank. World Bank, October 2018. https://elibrary.worldbank.org/doi/full/10.1596/978-1-4648-1328-3_ch1#.
About Author
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Alan Chan Alan believes that innovation-directed and honed by effective leadership-can revolutionise an organization. He leads with vision, but keeps his feet firmly grounded by managing through data. Alan's experience in both global enterprises and local companies has enhanced his understanding about the requirements of customers, as well as giving him a unique, holistic perspective of market needs that he draws on to deliver value to customers. Whilst at FUJIFILM Business Innovation (Hong Kong), he has led the drive to leverage the use of different technologies to enable clients' success through digital transformation.
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