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Digitalizing the construction sector with a value chain perspective

CECE is a recognized organization that represents European construction equipment and related industries. They aim to achieve a fair competitive environment through harmonized standards and regulations. Recently CECE published a report “Digitalising the Construction Sector: Unlocking the potential of data with a value chain approach.” We read the report, and here is our executive summary of some of the key findings in the report.

To remain unbiased in their research, they created a Steering Committee. This committee was established to ensure that the research was reflective of highly representative companies. The research was then conducted through desk research, online surveys and in-person interviews. The report corroborates the importance of digitalization within the industry, while also giving examples of this through case studies.

With the introduction of new strategies in an organization, changes in the management styles are almost inevitable. An example given by CECE on a management style, is “squadification”. This refers to the creation of smaller cross-functional teams working together on a unified goal, that is measured on the same metrics. These groups do not have bosses, rather they have a product owner who leads the group. This makes the decision process quick, and allows for agile changes within the groups. This is one example of how changing management systems, with the introduction of new technologies can aid an organization. These changes also bring new benefits to the organization, such as, increased efficiency, innovation, and increased revenue.

Ecosystem Collaboration Drives Increased Efficiency

When organizations are able to successfully integrate new technologies into their business models and strategies, there may be an increase in efficiency. One reason for this is because of the ecosystems that can be built through partnerships or joint ventures with cross industry organizations. “When all of the actors involved in a project are gathered together communicating in the same environment the picture is wider,” meaning that these ecosystems will give each actor a larger perspective on current processes. Through the digitalization of the construction industry there has been an increase in the collaboration between OEMs, rentals and contractors. Therefore, each individual organization is increasing efficiency internally, but this increase in efficiency can also be seen on the construction sites.

Innovation as a Result of Data Access

Through the possibility of having access to machine data, and the increased collaboration between organizations, there might also be an increase in the pace of innovation. Innovation is important as it will lead to the development of new products and services. “Digitalization also means higher customization,” the ability to track customer needs through data analysis holds many benefits; this ability allows for customization of products and services, paving the way for tailored, innovative products or services. The innovation of new and customized products plays a role in improving the quality of the product or the service provided by an organization.

Leveraging Data to Increase Revenue

Access to data, and the proper use thereof is also a key element in the digitalization of an organization. When businesses look to increase their revenue based on their digitalization efforts they should also keep in mind, that it is not the amount of data that determines the success rate. Rather, it is the leveraging the data for usage which will allow them to generate revenue. Thorough understanding of these elements could increase revenue. The increase in revenue stems from the increase in efficiency which again comes from the increase in the product innovation.

The benefits of digitalization are plentiful, and the implementation of new data strategies and the ecosystems will bring the construction industry into a new wave of construction. CECE also presents case studies, about how organizations have utilized digitalization in their businesses, and how it changed their processes while allowing them to benefit from these changes as well.

If you would like to know more about the CECE report and their efforts in developing the construction industry, you can check out the full report here.

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