Strengthening Construction Resilience Through Digital Tools — KPMG

How important is digitalisation for construction businesses? When it comes to risk management, it is no longer optional.  We spoke to Frederik Brugmans, a Strategy Consultant in KPMG’s Global Strategy Group, to get expert insight from his work assisting construction companies and investors with growth and strategy. He said, “If you zoom in, from a competitive perspective, you can lose out if you don’t adopt digital tools.”

There is a range of factors making it harder than ever for construction companies to remain competitive. Frederik splits them into two categories. First, macroeconomic trends, including interest rates and higher material costs due to geopolitical uncertainty and trade risks. Second, more localised problems, including national regulation and the shortage of available skilled labour.

These factors make it a particularly challenging period for construction, and Frederik notes that, “combined, it makes construction costs rise and that projects are being postponed.”

A changing attitude towards risk management in construction

The first step in dealing with those challenges is understanding how to manage risk more effectively within your business.

Frederik advocates for “scenario analysis, risk readiness and preparedness analysis” to better prepare for any situation. He argues that this should be carried out across every area of the business to have the greatest effect – and it should be done by construction firms of all sizes.

Frederik says: “The point here is the need for increased formalisation and integration of risk management processes at these companies. It will be applicable to a wider group of construction companies in the future.”

Adaptability, flexibility, new tools and a changed mindset

Key for Frederik is to meet the challenges head-on and accept the need for change: “It requires some adaptability and flexibility. Due to scarcity, companies are focusing more on efficiency and utilisation. Those kinds of things are more top of mind and have more focus on them in recent years than a decade ago.”

That leads to a greater sense of professionalism in the sector, aided by the adoption of digital tools across organisations, which can help businesses operate more professionally, with greater transparency and a better ability to forecast what’s coming.

However, it’s not just about the tools. Frederik says: “You can have the tools, you can adopt the tools, but if you don’t use them in the right way, they’re meaningless, right?”

Transforming traditional ideas and skill sets

What that looks like will differ for each company, and it is important to collaborate with experts who can help you transform your business and the skill sets within it using digital tools.

Frederik speaks to the potential benefits of doing so, saying it could “really impact the utilisation and the efficiency of your workforce,” an essential part of risk management in construction.

Want to learn more about how effectively adopting digital tools can help you combat risks in your construction business? Download our new e-book, ‘From uncertainty to resilience: The digital future of Construction’, for more insights, guidance and practical advice.