Overcome Barriers to IT Adoption and Integration in the EPC Market — Like many organizations across industries, project-driven engineering, procurement and construction (EPC) companies are grappling with ever-growing levels of disparate data.
Construction projects, which traditionally have created an enormous amount of paperwork, are increasingly digital. As more digital information is generated, there is an opportunity to harness the data and leverage it to make smarter business decisions. But with those opportunities comes challenges: Data can make or break multi-party collaboration. To execute efficient capital projects, EPC firms need to be able to effectively communicate and share current data with project owners and subcontractors, as well as internally throughout their own organizations.
Lack of control and visibility into the growing level of data often leads to capital projects going over budget and over schedule. In fact, a recent McKinsey report found that 98 percent of mega-projects incur cost overruns or delays. The average cost increase is 80 percent of original value and the average slippage is 20 months behind the original schedule. Construction productivity, which has remained flat for decades, is among the biggest causes of that poor record.
Innovation and Productivity
Innovation and productivity gains in the construction industry have been meager compared to the advancements of other industries, due to a number of factors ranging from poor organization and inadequate communication to flawed performance management, contractual misunderstandings and poor planning.
This is a troubling trend for EPC firms whose business model depend on executing projects on time and within budget. The lump sum contract, which remains dominant in the construction industry, defers risk into the hands of contractors. Capital projects that go over budget and behind schedule can have dire consequences for EPC firms, including loss of revenue and reputational damage.
The technology exists today —from analytics to mobile apps, Internet of Things (IoT), wearables, robotics and drones — to transform how the EPC market collects, analyzes, manages and stores data, and ultimately to enable productivity gains and stronger capital project management. Yet, while many EPC professionals see technological advancements as the top trend that will transform their business, a move to invest in these technologies has been slow compared to IT adoption in other industries.
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