We are living in a golden age of digital technology—an age that provides new worth to businesses worldwide through speed and efficiency. Still, government agencies are trapped in an antiquated era filled with spreadsheets, homegrown systems, and rickety infrastructure. For stakeholders to gain any value from extensive capital projects, harnessing technological innovations like cloud infrastructure to support planning, building, and operating initiatives is imperative.
State and local governments today face no shortage of challenges, such as legacy systems, siloed data, and an aging workforce—to name a few. In recent years, there has been a clear push by capital project leaders to invest more heavily in digital capabilities. Yet, in an Accenture study, only one-third of the 570 participating executives realized improvements in key performance indicators with data-driven digital transformation initiatives. Digital investment is taking place across the construction industry, but why are we still so far behind?
While many executives acknowledge the potential of new technology to improve collaborative decision-making and project execution, they often hesitate to risk multi-billion-dollar projects on applications they consider unproven. The uncertainty is understandable to a certain extent because reputations are on the line, and there are no do-overs. However, agencies cannot disregard the evidence that adopting new technologies presents a critical opportunity to increase project productivity and public outcomes.
Large capital projects, infrastructure, and facilities such as highways, airports, data centers, large housing projects, etc., have become more complex and more extensive in scale. These multi-year, cross-sectional assignments—with multiple timelines running concurrently and multiple structures or vital elements within a single project—require new techniques in order to realistically achieve success. According to McKinsey, the average capital construction project is 20 months behind schedule and 80 percent over budget—a statistic that hasn’t changed in previous years.
The construction sector, an industry notorious for financial and timetable overruns, has historically been resistant to change. But the constant strain on inefficient legacy processes has become a catalyst for technological upheaval.
A New Era for the Construction Industry
Public sector leaders who are embracing technology are reaping the benefits of digital transformation, like speed and cost optimization. Urbanization continues to be a growing need in America as demands for infrastructure projects increase to accommodate denser population hubs, such as transportation, power, and sewage. Data-driven insights are the answer to predicting market trends and project performance.
Aligned with the Industrial Integrated Project Delivery research by the Construction Industry Institute (CII), capital project stakeholders must align investments across relevant technologies, and digital assets and capabilities. Choosing and implementing the right digital technology foundation is critical to better serving the communities, businesses, and economies that depend most on these projects. Modernizing existing government legacy systems requires stakeholders and executives to commit to large-scale change for large-scale projects. Enterprise SaaS systems lower an organization’s risk on capital programs by ensuring that the project stays on budget and schedule. It’s a proactive approach that gives organizations an early-warning system for potential issues, instead of letting those issues snowball.
The path to thoughtful digitalization is through strong leadership support. Gartner’s list of the top 10 government technology trends for 2021—including accelerated modernization, cloud software implementation, data sharing, hyper connectedness, and more—is still applicable today as the problems it addresses persist. Innovative leaders are embracing these systems with great benefit. Cloud software improves program performance, risk, staff onboarding, retention, and more. This is moving the sector forward, spurred on by the innovative leaders who have optimized business functions by leveraging cloud technology.
When government organizations get behind digital transformation, they’ll use technologies, such as AI automation, cyber security, and cloud-based software to transform service delivery and back-office operations. This will enable governments to provide constituents with the infrastructure that they need, delivering projects safely, quickly, on time, and on budget.
The author, Balaji Sreenivasan, is Founder and CEO of Aurigo Software