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Construction’s Digital Future: Post-Pandemic

Updated: Mar 28, 2023

The COVID-19 pandemic has accelerated the digital transformation of the construction industry; but, will this uptick in digital interest last?


To say that the COVID-19 pandemic has affected all aspects of life and brought about immense change across all industries is an understatement. Even construction, an industry that has traditionally been slow to change, has also needed to quickly innovate and implement digital solutions to adapt to the challenges posed by the pandemic.

While companies have had to think on their feet to ensure the survival of their businesses this past year, sudden implementation of these digital changes may have lacked the proper planning, tools, or roadmaps to ensure sustainable success. Whether companies had already digitally transitioned before or during the pandemic, temporarily or permanently, this uptick in digitization, digitalization and digital transformation is not a phase. Transitioning to a digital future is now, more than ever, a necessity to navigate the hyper-competitive industry landscape and ultra-thin margins. Firms that fail to invest, or fail to continue to invest, in digitization, digitalization, and digital transformation may find themselves unable to cope with future uncertainty or industry upsets such as those caused by COVID-19.

Digitization, Digitalization, Digital Transformation

Throughout the pandemic, ‘digitization’, ‘digitalization’, and ‘digital transformation’ have quickly become buzzwords, especially in the construction industry. They are found in numerous articles and are sometimes even used interchangeably, despite having different meanings.

According to Forbes, “digitization is the process of changing from analog to digital form”, ie. transitioning from paper documents to cloud-based software (Forbes, 2018). Digitalization is “the process of employing digital technologies and information to transform business operations” (Forbes, 2018). This is applied mainly to people and processes and is mostly project-based. Using drones or rovers to replace physical surveying at site is an example of digitalization. Digital transformation, on the other hand, is a broader term that “requires the adoption of technology” as well as a change in organizational mindset, which is driven by customers’ needs. It is focused more on people whereas digitalization is focused more on technology (Chapco-Wade, 2018). A company may digitize information or digitalize specific processes and procedures, but digital transformation is fundamentally what is needed to digitally change the business model to achieve sustainability. Once a company decides to initiate a digital transformation, digitization and digitalization will follow naturally.

All that said, engineering, procurement, and construction companies (EPCs) have understood the need to take their projects digital even before the pandemic. In 2018, 98% of EPCs acknowledged that incorporating digital solutions was essential to their businesses’ operations and successes in the future (Ernst & Young, 2018). As illustrated in the following graphic, there are 5 stages in the digital transformation journey (IDC, 2020):

Before the pandemic, approximately 60% of construction companies globally were in the first and second stages of their digital transformation (Ernst & Young, 2018). Only 2% of companies were in the final stage and have completed their digital transformation journey.

Whether or not the acceleration in construction digitization and digitalization will last after the pandemic depends on where a company is on its digital transformation journey. It may be tempting to transition back to manual workflows post-pandemic if a company is in the preliminary stages. It may also be possible for companies to decide to stay in their current stage and never finish their digital transformation. Let us explore three possible scenarios and consider their consequences:

Scenario 1: Those who completed their digital transition before the pandemic

Even though it may have been relatively seamless for these companies to adapt to the changes brought on by the pandemic, it does not mean that they are immune to its effects. While they may be fully optimized and have completely adopted a digitally-driven business model, their current/potential clients and partners may not have. It will be important for companies who have completed their digital transformation to remember that they do not operate within a bubble; collaboration and interoperability with other industry players is still required, regardless of whether those businesses are digital or not. If 80% of their potential clients or partners are not digitized but the company itself is operating on cloud-based platforms, how will they integrate information?

Although only 2% of the construction industry globally has completed their digital transformation, this small number of companies plays a substantial part in making sure that the sudden acceleration in digitization, digitalization, and digital transformation of construction is not just a phase during the pandemic. They play a leadership role for the rest of the construction industry in illustrating the advantages and inevitability of digital transformation by bringing attention to how their projects have benefited from their digital transition.

To facilitate comparisons between pre- and post-digital transformation, these companies should implement a comprehensive system to track and measure their processes and data. This data should be compared against industry benchmarks and/or standards that were gained using pre-digital transformation models to determine the extent of improvements in performance due to digital implementations. If using digital tools can increase employee productivity by 14% and reduce costs by 20% for example, these metrics should then become ‘gold standards’ that other industry players can compare their data against, if these industry leaders are so willing to share the metrics.

Scenario 2: Those who started their permanent digital transition during the pandemic

Throughout the pandemic, restrictions on social distancing have been constantly changing and digital solutions have emerged as a ‘must’ instead of a ‘nice to have’; this has led some construction companies to want to become a part of this digital transformation movement permanently. To adapt to the pandemic, these businesses may have rushed into employing digital solutions to lessen the pandemic’s effects on construction schedules and costs, as well as to maintain client relationships; however, transitioning to digital does not necessarily mean automating all current processes. Teams must conduct a deep dive to determine gaps and to find specific solutions tailored to bridge these inefficiencies. These companies may have dove into implementing as many digital solutions as possible, thinking that the more technology they incorporate into their projects, the better. Perhaps they bought 3D printers, drones, and purchased cloud-based platforms; but was there anyone trained to utilize these tools? Are they even required or relevant to the services the company provides?

Companies who hastily started to digitally transform to cope with the pandemic may stay afloat for now, but these hasty decisions may not drive viable long-term benefits. To ensure they have lasting success, they may need to re-evaluate the implementations made during the pandemic and adjust as necessary to ensure their tools, processes, and roadmaps are specific and aligned with the organization’s objectives.

Scenario 3: Those who digitally transitioned temporarily to survive the pandemic

It is tempting to temporarily adopt digital solutions to cope with the pandemic and then relapse into pre-pandemic methods. While these interim changes do not require as much time, effort, and resources compared to permanent digital change, it would be fiscally imprudent for companies to solely focus on these band-aid solutions instead of deciding to continue their digital transformation.

The pandemic has had devastating impacts on construction firms across industry sectors, second to the human impact that COVID-19 has yielded. But, in many ways, the pandemic has acted as a teacher by bringing inefficiencies and gaps within industries to light and creating many lessons learned opportunities. It has emphasized the ability to change and transform rapidly as a core advantage.

Although companies have had to suddenly pivot and invest in digital solutions, they have also benefited from the quick responses required by the pandemic. Remote work capabilities have reduced on-site resource costs while cloud-based solutions have allowed for digital connectivity of teams and information sharing. Conflicts between owners and contractors sometimes arose due to mismanagement of paper documents. Digitizing construction documents has provided better tracking and more reliable data analytics, which can lead to better risk management as well as improve client relations. Companies that adopted BIM and 4D/5D modelling software can incorporate project changes brought on by the pandemic easily into their models and schedules, enabling stakeholders to remotely track their projects’ progress and performance in near real-time.

Companies that are tempted to cancel their modelling software subscriptions, close their cloud-based platforms, and revert to manual workflows after the pandemic may not feel the effects of those decisions in the short-term. While they stay in their comfort zone, others in the industry may be in the process of optimizing their abilities and performance by transitioning to digital; these industry players are reinventing new standards of capabilities for construction companies. If companies who go back to the pre-pandemic model are not on the same playing field as the rest of the industry, they will have difficulty maintaining or even increasing their value in the current and future market.

So, will this uptick in the digital transition of the construction industry be just a passing phase?

Historically, deadly pandemics occurred every 100 years or so. Now, we have some form of an outbreak every few years (World Economic Forum, 2020), on top of other global crises that may also be occurring simultaneously. Now, more than ever, organizations must focus on resiliency as a core strategy, thereby enabling teams to navigate highly uncertain future industry landscapes.

The work is not done for those that have completed their digital transformation; they will need to take charge and spearhead the industry in continuing digital efforts within construction to improve the industry’s efficiency and operability as a whole. Those who started to digitally transform their business permanently during the pandemic will not only need to continue but will also need to re-examine and adjust their digital implementations to ensure their business model aligns with company objectives. Finally, those who are reluctant to transition into the digital model permanently may be able to sustain their operations throughout this pandemic with temporary digital solutions; but, the next pandemic or global crisis may arrive sooner than we anticipate. Will they be able to catch up with everyone else when that time comes?

It is not a question whether this digital uprising of the construction industry will last; it inevitably will. The real question is ‘how will organizations use the learnings from the COVID-19 pandemic and their digital journey to establish resilience for an uncertain industry future?’ Those teams that capitalize on these lessons learned will find far greater value in their digital transformation efforts when the next major industry disruption confronts us.


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