Digitization in the Construction Industry - 9 important Trends and their Benefits

The German construction industry is currently short of around 300,000 skilled workers. This is the estimate of IG Bau. At the same time, it also predicts that this will not change in the foreseeable future. One possible answer to the difficult situation could be the - less personnel-intensive - use of digital technologies. While these cannot completely compensate for the shortage of skilled workers in the industry, they can nevertheless cushion it considerably.

While software for construction planning, execution and billing as well as cloud technologies are already commonplace in many construction companies, digital technologies such as artificial intelligence, the Internet of Things and augmented reality are still exceptions - even though these in particular offer enormous potential for the construction industry.

We show architects, civil engineers, construction project managers and real estate developers which 9 trends are crucial for the digitalization of the construction industry, how they can put them into practice and profit from them in the short and long term.

The most Important in a Nutshell

  • The challenges of digitization for construction companies include data security, interoperability and investment costs.
  • Important trends in digitization in the construction industry are AI, Big Data, Building Information Modeling, Internet of Things and Robotics.
  • With Konfuzio, construction companies make the processes of their construction projects more efficient so that they complete them faster, more cost-effectively and with higher quality. Talk to one of our experts now and let's uncover the potential of digitalization for your company together! Contact Konfuzio now!

Construction Industry today

The German construction industry will be short of 300,000 skilled workers in 2023, and one in three apprentices is currently dropping out of training. In addition, construction companies reported a decline of almost 7 percent in the number of apprenticeships started in 2022. There is therefore no other way to put it: personnel capacities in the German construction industry are tight. It is therefore no wonder that many construction companies see the shortage of skilled workers - after energy and raw material prices - as the greatest threat to the economic development of their company. How can the digitization of the construction industry help here?

Digitization in the Construction Industry - What does that mean?

Digitalization in the construction industry refers to the use of the latest technologies and digital tools to optimize construction processes. Among other things, it includes the use of BIM (Building Information Modeling, more on this further down in the article), IoT (Internet of Things) and AI (Artificial Intelligence).

Construction companies are thus able to speed up processes, reduce costs and improve the quality of construction projects.

In practice, for example, construction companies monitor their building projects in real time, optimize the flow of materials and improve collaboration between stakeholders. In addition, digital technologies enable them to monitor energy efficiency and optimize building performance.

Would you like to automate individual work steps or entire processes in your construction projects as part of the digital transformation? Our team will advise you in detail on the possibilities of digitization and automation in your company! 

Development of Digitization in the Construction Industry

A Telekom study shows that the construction industry has some catching up to do in terms of digitization. The industry scored 53 out of a possible 100 points - bringing up the rear after logistics (65), industry (63), skilled trades (59), hospitality (57) and retail (55). What stands out:

Digitalization in the construction industry is barely progressing.

Thus, it could only gain one point on the scale from 2019 to 2022.

Yet the will to integrate digital solutions into processes is definitely present. In the Telekom study, for example, 93 percent of the construction companies surveyed said they would like to invest further in digitization. 39 percent would like to increase their budget, and on average 22 percent actually plan to increase the budget for digitization projects (Digitization Index for SMEs 2021/2022, Telekom). 

digitalization construction industry challenges

Challenges of the Digitalization of the Construction Industry

What explains the slow progress of digitization in the construction industry? Let's take a look at the challenges that construction companies face in the context of digitization. Are these keeping construction companies from digitizing?

ChallengeExplanationPractical example
Integration of existing systemsIntegrating digital systems into legacy workflows is challenging due to incompatible data formats and interfaces.A construction company introduces a BIM system but has difficulty integrating it with its existing project management software, causing delays.
Shortage of skilled workers and training costsThere is a shortage of professionals with digital skills and training existing employees is time-consuming.An architecture firm wants to implement BIM but needs to train staff, causing temporary productivity losses.... 
Data and cyber securityProtecting sensitive data from cyberattacks is critical to avoid financial and legal consequences.A construction company suffers a data theft due to a cyber attack, resulting in financial losses and a loss of reputation.
Interoperability and standardizationThe lack of industry-wide standards makes collaboration between different digital systems difficult.A civil engineering firm cannot seamlessly transfer created models into the architect's BIM software, leading to inefficiencies.
Investment costs and ROIImplementing digital advanced technologies requires significant investment and it is important to realize the return on investment (ROI) over time.A developer invests in drone technology to monitor construction sites, but it takes time for it to recoup costs through improved efficiency.
Resistance to changeNot all employees have a positive attitude toward digitization. They show resistance to new digital tools, especially if they are used to existing ways of working.Construction managers refuse to switch from paper plans to digital plans, which affects collaboration.
digitalization construction industry trends

9 Trends in the Digitization of the Construction Industry - and how Companies benefit from them

Despite the slow progress of digitization in the construction industry and the challenges that arise in the process, 9 clear trends are emerging. These enable construction companies not only to significantly increase efficiency and productivity, but also to build more sustainably and improve quality assurance. Construction companies are able to plan their projects more precisely, execute them more safely and manage them more transparently:

1. Artificial Intelligence (AI) and Big Data

As in other industries, construction companies also collect vast amounts of data that provide valuable insights and thus allow well-founded decisions to be made - if the data is analyzed at all. Because: Without software that does this automatically, this is hardly possible for companies. Here come artificial intelligence and big data analytics into play.

They evaluate all data automatically and provide clear recommendations for action based on this.

To do this, AI analyzes complex data and recognizes patterns that are difficult for human observers to discern. This enables precise predictions, improved project planning, and optimized resource allocation. Big data analytics provide in-depth insights into the construction process, from material usage to labor performance. This helps to identify bottlenecks, reduce costs and increase efficiency. 

2. Building Information Modeling (BIM) 

Building Information Modeling (BIM) is revolutionizing the way companies plan, create and manage construction projects. BIM makes it possible to create comprehensive 3D models of buildings that not only show the geometric shape, but also contain all relevant information on materials, costs, schedules and workflows. This digital representation enables architects, engineers and contractors to work collaboratively, identify errors early and make more efficient decisions. In addition, BIM provides the ability to simulate construction processes, leading to improved project planning and execution.

3. Internet of Things (IoT) and Sensor Technology

Internet of Things (IoT) and sensor technologies enable the networking of construction projects through the use of smart sensors. Construction companies integrate these sensors into buildings and construction equipment to collect real-time data on various parameters such as temperature, humidity, load and energy consumption. This data provides construction professionals with precise insights into the condition of structures and enables proactive maintenance to prevent failures. Continuous monitoring of construction sites also helps improve safety and efficiency.

4. Augmented Reality (AR) and Virtual Reality (VR)

AR and VR open up completely new dimensions in the construction process. Augmented reality allows digital information to be superimposed on the physical environment, while virtual reality creates a completely immersive environment.

Construction professionals use VR for virtual walk-throughs of buildings before they are even built to review design aspects.

They use AR on job sites to view construction plans in real time, detect errors, and improve team collaboration. These technologies allow decision makers to experience realistic simulations, leading to better-informed decisions.

5. Robotics

The use of robots and automated machines on construction sites increases efficiency and safety. For example, construction companies use robots for tasks such as masonry, welding and material transport. They work precisely and continuously, which increases the speed of work and minimizes human error. Automated construction equipment, such as excavators and concrete pourers, not only improve accuracy, but also safety for workers, as dangerous tasks are taken over by machines. This shortens the time of construction projects and significantly reduces labor costs.

6. 3D printing on the construction site

Another important trend in digitization in the construction industry is 3D printing on the construction site. 3D printers are able to create complex structures and building elements directly on site. This not only enables a significant reduction in construction time, but also minimizes material waste. In addition, construction companies are using 3D printing to create unique and innovative designs that would be difficult to implement using traditional construction methods. In the future, companies could therefore construct entire buildings through the use of 3D printers, providing a sustainable and cost-effective solution for the construction industry.

7. Drones in the construction industry

Drones offer a wide range of applications in the construction industry. Construction companies use them for inspecting construction sites, taking aerial photos, surveying terrain and monitoring construction progress. In doing so, aerial photography from drones provides detailed information about the shape of the terrain and helps in the planning of construction projects. Drone inspections enable a quick check of buildings and building structures, reliably identifying potential defects and damage. 

8. Blockchain technology in construction

Blockchain technology provides a transparent, secure and decentralized method of managing transactions and data. In modern construction, companies use blockchain for various applications, such as contract management, payments, and supply chain tracking.

Through blockchain, they verify transactions in near real-time, resulting in accelerated payment processes and a reduction in fraud.

The technology also enables seamless tracking of construction materials, which is particularly important for quality assurance and environmental compliance. In addition, blockchain promotes transparency throughout the supply chain, from material procurement to project completion, which increases trust between stakeholders and reduces the risk of discrepancies.

9. Automation of processes

Automation technologies play a key role in the construction industry. This is because: they affect almost all steps of a construction project. From project planning and budgeting to resource allocation and supply chain optimization to workforce planning and quality control, AI algorithms take over numerous manual processes. This increases efficiency, minimizes human errors and helps accelerate construction projects.

digitization construction industry use cases

3 Use Cases of AI in the Construction Industry

This means that construction companies are faced with the question of which solutions they should start digitizing their operations with. After all, hardly any company can tackle all 9 trends in the industry at the same time. 

What unites many trends is the analysis of large amounts of data. To implement this efficiently, companies cannot avoid the use of AI. AI is thus currently the most important pillar for the progress of the Digitization in the construction industry. It enables better decisions and has a significant impact on the quality as well as the project time of construction projects. To illustrate this, we take a look at 3 classic use cases from the construction industry and show how companies are using and benefiting from AI:

1. Digitalization in the construction industry - project planning and risk management with AI

AI in project planning enables more accurate and efficient scheduling for construction projects. By analyzing historical data such as past construction projects, weather conditions, and work schedules, AI creates accurate forecasts for the timeline of a new project. It takes into account several variables that human planners often overlook.

These accurate schedules allow companies to better plan resources and avoid bottlenecks.

In risk management linked to project planning, AI helps predict potential problems and risks even before they occur. To do this, it analyzes large volumes of data to identify patterns and trends. For example, it is able to identify bottlenecks in material availability at an early stage or predict possible delays due to weather conditions. Companies then take timely action to minimize these risks, whether through alternative sources of supply or adjustments to the schedule.

2. digitalization in the construction industry - quality control and defect detection with AI

AI-based image recognition systems play a crucial role in quality control. They analyze photos and videos from construction sites and compare them with the construction plans. Deviations, whether in the placement of building elements or in the structure, are immediately recognized by the AI. In the process, the image recognition systems identify even the smallest defects that are difficult for the human eye to detect. This precise defect detection enables companies to optimize their quality assurance processes and minimize costly rework.

3. Digitalization in the construction industry - energy efficiency and building management with AI

In the field of energy efficiency, AI continuously analyzes the energy consumption of buildings. Sensors measure consumption in real time and transmit the data to AI systems. These systems recognize patterns in energy consumption and adjust lighting, heating and cooling accordingly. For example, if a room is not being used, the AI turns off the lights and adjusts the temperature. This precise control results in significant savings in energy costs. In addition, the AI systems also predict which systems companies need to renew or maintain to further increase efficiency.

Take Advantage of the Potential of Digitization now with Konfuzio 

An enormous shortage of skilled workers, high energy and raw material prices, and barely advancing digitization are currently making it difficult for the construction industry. While there is currently no end in sight to the shortage of skilled workers, digitization in the construction industry could actually make great leaps forward. Because:

The construction industry is predestined for digital technologies such as AI, augmented reality, robotics and 3D printing. They are the key for construction companies to cushion the shortage of skilled workers.

An established partner for the digitization of the construction industry is the German provider Konfuzio. Konfuzio has AI software that construction companies can use to develop a data-driven strategy that will give them a competitive advantage in the long term. To do this, Konfuzio has advanced AI that also includes Machine Learning and Deep Learning. 

This makes Konfuzio not just a one-trick pony, but a daily driver with which companies can holistically digitize and automate their daily work steps. In practice, this means: Konfuzio supports construction companies in making construction planning and execution more efficient, minimizing risks, increasing quality and reducing costs. What does that look like in practice?

Application Scenario - How Konfuzio Optimizes Construction Planning and Execution

The initial situation

A mid-sized construction company with a wide range of construction projects, including residential, commercial and public infrastructure, faces the challenge of optimizing its construction planning and execution. Manual processes and the processing of CAD files as well as blueprints require a lot of time and resources, resulting in delays, cost overruns and quality issues.

The solution

The construction company chooses Konfuzio, an AI-driven solution that enables data to be extracted from CAD files and blueprints, analyzed, and processed in real time. Konfuzio's advanced machine learning algorithms detect patterns, identify important information, and monitor the progress of construction projects.

How Konfuzio helps

1. automated planning: the software analyzes the CAD files and construction plans to plan construction projects faster and more accurately. This includes the allocation of resources, the creation of schedules and the calculation of material requirements.

2. early detection of risks: Konfuzio identifies potential risks in real time, such as changes in construction plans, material shortages or weather conditions that could affect construction progress. This enables the company to take proactive measures to prevent or minimize problems.

3. quality control: the software monitors the implementation of the construction projects and detects deviations from the plans. This enables the construction company to detect and correct quality deficiencies or construction errors at an early stage.

4. cost savings: Through better planning, risk minimization and quality improvement, the construction company achieves significant cost savings. Resources are used more efficiently, waste is minimized and expensive rework is avoided.

The results

By using Konfuzio, the construction company can complete its construction projects more efficiently, cost-effectively, and with higher quality. Delays and cost overruns are minimized and customer satisfaction increases. The company gains a competitive advantage in an industry that is often hesitant to fully embrace digitization. Konfuzio makes it possible to fully exploit the opportunities of digitization and realize the full potential of construction projects.

Take advantage of the construction industry's reluctance to digitize now and get a head start on the competition by using AI!








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