AI (artificial intelligence) is the future of business. Many industries are turning to this technology to speed jobs, heighten efficiencies, achieve access to new data sets, and enable a new shift in the way we work. But will this all unfold as expected in the construction industry? Will it transform how we do bidding, estimating, project management, accounting, and job costing? Let’s explore a new report to see if we can find answers to some of these questions.
Deltek’s 45th annual report looks at the AEC (architecture, engineering, and construction) industry. To be clear, the report isn’t just about AI. Rather, it is about all technology trends, business development, project management, human capital management, financial management, and more. It is about the business of construction—and some of the key technology takeaways are worth a look.
To collect the information, Deltek in partnership with CMG Consulting, conducted an online survey between January and March 2024, surveying a total of 652 A&E firms with a broad cross-section. Companies ranged from the smallest to the largest, respectively, in the space.
Here’s what it found. A&E firms remain positive, as inflationary pressures eased and labor stabilized in 2023, with firms forecasting a 10.9% increase in net revenue growth year over year. Another 18.7% anticipate operating profit on net revenue growth year over year, and 62% expect AI to improve operational efficiency. Looking at all these numbers are still somewhat challenging, but they are noteworthy to consider.
Certainly, 62% isn’t everybody, but it is a majority. Companies also expect AI will help improve project delivery and improve the timeline, reduce overhead costs, improve internal communication, increase profits, and reduce project expenditure. Where exactly do these companies expect AI to help? The areas are clear:
- Creating proposals/marketing content (24).
- Summarizing document and/or drawing data (17%).
- Developing 3D models of renderings (15%).
- Data analysis and exploration (14%).
- Design concepts and/or testing design iterations (13%).
- Automating repetitive drawing/modeling tasks (12%).
- Assisting with code compliance checks (7%).
Undoubtedly, these are only a few examples of how AI can help in the AEC industry today. There are many other opportunities we may not even recognize yet as an industry. But if we are being honest—and it seems these companies are—there are many hurdles that stand in the way of widespread technology adoption of any new technology or digital transformation.
For example, many companies still struggle with how to prioritize technology trends, simply don’t have the time to invest in learning or educating employees, and don’t have the corporate openness to emerging technologies or buy-in from top leadership. Other hurdles include the lack of internal expertise, lack of a champion to lead an initiative, and the cost of the technology.
Ultimately, success with new technology is going to come down to a few key factors to ensure success of the digital transformation. Simon Floyd, GM, manufacturing and mobility, Microsoft, summed it up best in a recent conversation on The Peggy Smedley Show. While he was talking about the steps companies can take to build an AI strategy in manufacturing, the 7 principles he talks through could apply to any industry, including construction.
In the Deltek study, some of the top technology trend initiatives mirror what Floyd told me on The Peggy Smedley Show. For one, we need to create a strategic plan for the technology implementation, and we need to educate staff on these trends. These are perhaps some of the most important steps to ensure success with any digital transformation.
What are your thoughts? What are the hurdles to AI implementation? What are the opportunities for AI in the AEC industry? How do we reach greater adoption? And, perhaps more importantly, how do we reach greater success with the technology?
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