Construction sector is hugely important economically and remains one of the most influential…and least digitized sectors globally. Yes, that’s right. Although technologies such as Building Information Modeling (BIM), artificial intelligence, Internet of Things (IoT) sensors, and digital platforms have the potential to radically change the familiar mechanism of project design and implementation, the pace at which they are being adopted…is lagging.
Awareness without incentive for change
While most companies recognize their shortcomings and the need to expand their digital capacity, only a small proportion of them are making real changes. According to a study by PwC Germany, the gap between recognized potential and actual capabilities continues to widen, yet 82% of the companies participating in the study admit that they lack the necessary knowledge to fully implement the potential of digitization in the workplace.
This situation creates a vicious circle – the shortage of skilled labor blocks the view of the digitization of the work process, but the implementation of digital solutions would help compensate for this shortage of people and speed up and improve the quality of processes.
Why this proves to be a fundamental obstacle?
As the filed fails to keep up with tech growth, it is under unprecedented pressure. The material costs are rising, interest rates are high, there are supply chain disruptions, and labor shortages have pushed many construction firms into what analysts describe as a “crisis mode.” In Germany, for example, many companies report declining revenues and increased cost pressure, while investment in innovation is often postponed due to financial uncertainty.
Digital transformation could significantly improve efficiency, project coordination, and risk management. Yet the sector struggles to move from recognizing the value of digital tools to implementing them at scale.
What Is blocking change?
Digitization brings with it a number of responsibilities, but it also opens a whole new field of improvements that are interconnected, allowing for better results from different perspectives. There are several barriers that prevent the industry from moving more quickly towards digitization and, accordingly, optimizing speed and quality of execution.
1. Skills shortage
As we mentioned at the beginning, a frequently observed issue in many companies is precisely this – a lack of expertise among existing staff who know how to deal with technological advances. Although they are aware of the shortage, these companies would find it difficult to take the step of updating the knowledge of some of their teams or even hiring new people who are oriented towards this sector. This lack limits the possibility of implementing trends and even experimenting and testing them.
2. Software fragmentation
We could also call this point “lack of teamwork.” When working on a specific construction project, many stakeholders are involved in the process, and often each of them uses their own data management systems.
As a result, it is quite likely to notice discrepancies and fragmented data in platforms that do not communicate well with each other. And instead of facilitating work and ensuring an optimized flow of information, digital solutions lead to delays in deadlines and further confuse the parties involved.
3. Capital constraints
The transition to digitization in a work plan requires investment in training, software, and infrastructure. In conditions of financial uncertainty, such as those currently facing the world, many companies are turning to temporary (short-term) financial stability instead of choosing long-term returns with investment in technology.
The declining flow of projects discourages companies from justifying such investments due to uncertainty about returns and implementation time. This leads to another vicious circle: companies need digital tools to improve their productivity and competitiveness, but financial pressure makes it difficult to invest in them.
4. Cybersecurity risks
With the gradual digitization of construction processes, they may become an obvious target for cyber threats. Modern construction projects rely on interconnected digital platforms, cloud services, and Internet of Things (IoT) devices. Each additional connection increases the potential for attack by malicious actors. From this, we can conclude that cybersecurity is no longer just an IT department issue – it is a strategic business issue that can affect intellectual property, financial stability, reputation, perceived trust, and the development of the entire company.
5. NIS2 Compliance
Naturally, after cybersecurity, we are obliged to make room for its regulation. But do construction companies think so? Following the introduction of the European Union’s NIS2 directive for stricter cybersecurity requirements for organizations in multiple sectors (including those related to critical infrastructure and supply chains), companies are now required to implement further innovations. This includes structured cybersecurity risk management and planning procedures for reporting potential incidents.
For many construction companies that have not prioritized cybersecurity in the past, these stricter management practices represent a significant, even seemingly unattainable, organizational change. To comply with NIS2 requirements, they will need not only new technological solutions, but also management training, a new supplier risk management strategy, and a clearer and more unified security policy.
A way forward: What is the right formula?
Adopting a particular technological resource is a complex decision, not simply a matter of implementing software or replacing an employee with artificial intelligence. It requires the integration of specialized digital systems, BIM models, and approaches that allow companies to gradually centralize their activities, thereby connecting all stakeholders, tasks, data, and project progress. Еach company requires an individual approach to updating its solutions so that not only is time optimized, but the set goals are also achieved in a timely manner.
Inspired by this concept, we developed a Smart Factory model for our client GOLDBECK. We focused on building digital production management systems and optimizing material logistics. As part of the project, an existing native application that previously relied on three separate systems was transformed into one single web-based platform. This way, on-site operational issues and streamline workflows were improved. Learn more about the entire project here.
Of course, technology alone will not make up for the shortcomings in the sector. Companies need to make a constant effort to train their teams, monitor trends, invest in skills development, and manage cybersecurity. Most importantly, the transition to digitalization requires active communication and collaboration between engineers, IT specialists, and project managers.
