If You Had A Crystal Ball, Would You Use It?
Using Real-Time Data to Differentiate Your 21st Century Construction Projects
By: Tiffany Hosey, Esquire, CEO/Founder CTBIM
Why Are So Many Afraid of Data?
There are many articles touting data as the new gold or the new oil of the 21st Century. If that’s true, why, then, are so many in the construction industry so afraid of data? I’ve encountered several executives, lawyers and risk managers along the stakeholder chain of major construction projects (public and private) who marvel at how granular data can be captured on complex construction projects. While they can appreciate its value, many are repelled by what they perceive as the increased exposure they risk when detailed data is available to them. It seems counterintuitive when a risk manager, whose very purpose is to manage and mitigate risk for its real estate developer clients or REITs, states that having heightened accountability and transparency into the daily activities of construction projects would give it "too much information." Lack of candor is the smoke within the crystal ball that obscures what information of value that could be gleaned from the traditional way of forecasting outcomes. The risk manager, construction manager or owner’s agent’s concern is mainly that increased transparency means increased accountability. They prefer the smoke obscure the truth or they don’t want data, which they fear will place them in the shoes of a general contractor. In other words, let the general contractor take on the risk and we’ll keep our heads in the sand, let our eyes be obscured by the smoke and bury the crystal ball.
A mechanical contractor for complex construction projects similarly balked at the idea of increased transparency into when they receive inventory onsite because it would be forced to change its business model. You see, this contractor bills the project when they order materials and equipment, not when they receive them. Billing when materials are ordered is not a generally accepted practice in construction. So, as you can see, there are reasons why the status quo, in many ways, is preferred. The status quo does not move the needle on productivity (see the 1% productivity growth rate over the past 20 years). Instead, the opaqueness of the status quo contributes to the almost $3 trillion lost annually in the construction industry.
Using Real Time Data To Be A Trailblazer
Although there are many approaches to data collection during the construction process, we advocate a process that makes the data collection objective and unimpeachable. The quality of data collected is not likely contemplated by project stakeholders until something happens. I often use the comparison that people don’t appreciate paying for health insurance until they get sick or car insurance until they have an accident. Something like a claims dispute or litigation can educate stakeholders about the difference between simple data collection and quality data collected that can protect a party’s interest.
Consider this example:
5 years post-construction, during the defective claims period still covered by insurance, in a 500-unit condominium complex, there is condensation behind a wall common to 100 individually owned units. When the building was being constructed, a 3rd party vendor took photographs of all the piping, wiring, framing, blocking, etc. behind the walls before they were closed in. Those photographs are date and time stamped and provide a snapshot of the unobstructed assets located behind the wall. The owner of the building, faced with 100 different lawsuits brought by the individual owners, is burdened with ferreting out the cause of the leak and the identity of the contractor responsible for it.
When subcontractors are themselves tasked with the responsibility to take photos or videos of their completed build activities at the time of completion as part of their Quality Control (QC) function, they have the best evidence of their performance. They create contemporaneous records of their build activities, which provides evidence of the quality of their workmanship.
Further, if another contractor caused damage after the work was completed, the subcontractor’s contemporaneous photo or video is evidence that at the time it completed its build activities, the work was either done properly or not.
However, if a 3rd party vendor takes a photo, the evidentiary value of that picture is diminished. Since the 3rd party’s picture was taken weeks, maybe months after the subcontractor’s build activities, it carries weak evidentiary value to prove or disprove the subcontractor’s culpability for the damage. A snapshot taken right before the wall close-in does not provide the same kind of proof that a set of contemporaneous photos or videos capturing the sequence of build activities can offer.
With tools designed to capture material, real-time data, all parties can have access to intelligent granular data to inform decision-making throughout the construction process. All parties have shared information to minimize their respective risks, protect them in the event of litigation, provide reliable records in the event of claims disputes and aid in the efficient completion of construction projects.
Bold Visionaries Will Surpass The Competition
It will take visionaries, true leaders, and early adopters who see and embrace a future where structures are planned and built based on concrete, objective, organized data. Data useful for planning, designing, estimating, budgeting, and managing risks that is embraced by construction professionals, will usher in the construction vanguard of the 21st Century.
Whether an owner, developer, architect, engineer, general contractor or subcontractor, the goal on every construction project is not to lose money. To come out of a complex construction project without suffering debilitating losses from ill-informed design vs. constructability choices, defective workmanship, poor communication, exploding change orders and persistent schedule breaches will require construction stakeholders to pull their arms and heads out of the sand, clear away the smoke and use the crystal ball to see the wonderful and profitable results that data can bring. Intelligent use of real time data can help all stakeholders stand out from the crowd and be the leaders of the future of construction.