Outsourcing In The Construction Industry

Stepping into the future … buildings have to be more livable, sustainable, greener and energy efficient.

The world is predicted to get more urbanized by 2030, when more than half of the global population will move from the countryside to live in towns and cities. With growing urbanization, the challenges are immense. The world’s cities occupy just 3% of the Earth’s land, but account for 60-80 % of energy consumption and 75 % of carbon emissions.  To meet the needs of urbanization in a sustainable way, the construction industry has to design buildings that are more energy efficient and cities that are more livable and, at the same time, develop more sustainable methods within the industry itself to achieve more with less to keep costs down and efficiencies high.

The characteristic of construction companies tends to be about scale. Large companies build large projects, even though the margins are slim – it’s just a question of size as multimillion dollar projects yield millions of dollars of return for construction professionals.  So for most companies in the construction industry, whether contractors or consultants, the direction tends to be towards growing to cover all the relevant skills - structural, electrical, mechanical, civil, and environmental - so that the service model is kept in-house in order to reap the returns. But this limits the potential of the industry, as scale does not necessarily encourage innovation and the larger the size, the higher the scope for inefficiencies and conflict amongst experts.

In a typical construction project team, there are a number of disciplines involved from the architects and engineers to the quantity surveyors and contractors. Hence the specialists on the team are already engaged at the outset. Outsourcing occurs when certain labour intensive tasks like engineering drawings - which are repetitive - need to be produced. The existence of design centres in low-cost economies like China and India now provide this service for construction companies. The advantages of time zones come into effect as it is possible to request drawings at the close of the working day in the US and get an outsourced services company in Asia to complete these drawings during the working day in Asia ready in the morning for the US professionals to work on. This is common in the industry. Challenges arise in communication and culture, but in general these can be overcome with time and the fostering of working relationships. Contractual specifications are important as well to avoid misunderstandings and potential infringements.

Technology such as Building Information Modelling, virtual reality and augmented reality will enable the construction project life cycle to expedited by minimizing errors.

A more recent trend is to outsource Building Information Modelling or BIM services. BIM is an electronic platform for all members of a project team to view the building design in 3D in real time as the design team develops the concept and the detailed engineering design is applied. BIM is also said to apply to 5D, whereby the additional dimensions of time and cost are added to the project to give a sense of realism to the latter. BIM is useful for detecting clashes in services e.g. a pipe being laid where a supporting column is in the way or where walls are clearly obstructing access for building inhabitants. The modelling also allows for discussion among experts to come up with innovative solutions like sensors for motion detection, accessibility for elderly occupants and more use of natural lighting and passive ventilation for environmental comfort. The use of BIM is particularly appropriate for sustainable design and green certification of buildings through LEED, as this can be programmed into the original design to attain the desired level of certification.

But construction companies are traditional by habit and have an aversion to outsourcing. This is actually slowing down the industry. The construction industry is a barometer of a nation’s economy. If the latter is doing well, then the construction industry tends to be booming.  Currently in Asia, the industry is enjoying a high peak, however this may not last. Many companies are investing in downstream activities like owning and operating facilities. Others are seeking diversified activities like building resorts and healthcare facilities. The better approach is to transfer the risk to outsourced services. BIM is a prime example whereby a reputable BIM services provider would have enough projects worldwide to spread the risk of a down turn. This helps the construction industry in the long run. BIM furthermore allows innovation and creative thinking so the solutions of the future lie in hands of innovators focused on BIM and 3D modelling to come up with leaner and greener solutions for their clients as well as aesthetic and high quality buildings.

With digitization of construction data, it is possible to use virtual reality (VR) and augmented reality (AR) techniques to visualize designs in 3-D holograms and to apply this technology to view different constructed options or even ‘enter’ a building in order to design from within. Using cloud technology, BIM experts can ‘scan’ existing buildings to obtain digital data which is uploaded and stored in the cloud for manipulation to identify potential improvements in energy and efficiency.

The 2030 Agenda for Sustainable Development was established by the UN to end poverty, fight inequality and injustice, and tackle climate change by 2030. Goal 11 seeks to “make cities and human settlements inclusive, safe, resilient and sustainable”, with a principal target of full access to adequate, safe and affordable housing and basic services. There is more than enough work to provide for the emerging urban world. The construction industry needs to wake up to this reality and shift the old-fashioned business paradigm to a new partnership model that ultimately creates value for all.

Dr Thomas S.K. Tang is currently an Advisor for Atlas Industries (Vietnam) Ltd. He can be reached at dr.thomas.tang@gmail.com.