Shift from output to outcomes
Functioning, efficient infrastructure is fundamental to the success of economies and societies, yet resource constraints, population growth, climate change and limited investment threaten infrastructure in ways never experienced before.
The challenge to the UK infrastructure industry is to deliver ever-better service despite the constraints. The future of construction will be in helping the infrastructure industry to meet these challenges, but it needs to be transformed to achieve this.
A paradigm shift is afoot in the infrastructure industry as its focus moves from building assets to providing better customer service.
For an emerging economy’s infrastructure, the primary aim is to build new assets and to get them into use fast – construction is all about output.
But in the UK today, our built environment is characterised by highly developed, existing infrastructure. For example, the total value of existing water infrastructure in England and Wales is £350 billion, while the value of new water sector construction is £1.8 billion a year. It’s a similar picture across the road, rail, electricity and gas sectors.
Instead of focusing on output, construction needs to focus on outcomes for the ultimate customer
It is the high level of development of this established infrastructure that is pivotal to the change under way: asset owners and operators are increasingly focusing on the service they provide to their ultimate customers – the payers of fares, bills and taxes, who use the infrastructure: us.
And for the construction industry, this has profound implications. Instead of focusing on output, construction needs to focus on outcomes for the ultimate customer.
“We’re looking at a future for the construction industry that is about more than just construction; it’s about customer outcomes, value and efficiency,” says Mark Enzer, practice manager for water at global engineering consultants Mott MacDonald.
Customers want better service, lower bills and less disruption. The fare-payer cares about getting a seat, not about how the capacity on their train line is going to be increased.
Therefore, the construction industry can improve outcomes for the customer in a variety of ways, not only by building new assets, but also by increasing the capacity, efficiency and resilience of existing ones. This can be achieved by managing demand, exploiting technology and improving delivery to increase efficiency, capacity and resilience.
With a focus on outcomes, construction will not always be the right answer. And if the right answer involves less construction, the industry should in future be rewarded for the value they add for the customers, not just for the assets they build.
A range of emerging new practices are enabling the construction industry to respond to the changing infrastructure landscape.
TRANSFORMATION IN DELIVERY
The use of building information modelling (BIM) is already beginning to transform construction. BIM facilitates both design for manufacture and assembly (DfMA) and offsite manufacture, offering manufacturing-style efficiencies and making construction a matter of logistics and assembly. DfMA enables new assets or asset enhancements to be slotted into place in a fraction of the time required for traditional building. Benefits for customers come in the form of less disruption and lower bills.
BIM also facilitates product-based delivery in which standard components and assemblies are developed once, but used many times across a whole programme of work. This creates the potential to develop designs by picking from a BIM “product catalogue”.
Both approaches are closely allied to carbon and cost-savings. The government’s Infrastructure Carbon Review, published in November 2013, showed that reducing carbon reduces cost in the construction and operation of infrastructure assets. Simply, carbon is a measure of resource and energy efficiency. Companies that have set out to reduce carbon have driven innovation yielding better solutions and commercial savings.
TRANSFORMATION IN INTEGRATION
The construction industry is made up of numerous tiers, collectively termed the supply chain. Historically, this supply chain has been fractured, but there is great value in integrating it, particularly for long-term programmes of work. Alliances based on aligning business objectives with customer outcomes can enable very substantial efficiencies throughout the process of delivery. Many potentially transformative solutions are produced by suppliers and manufacturers, tiers of the supply chain that historically have had a weak voice. Integration helps them to realise their innovative potential and get value-adding ideas to the customer.
TRANSFORMATION IN INFORMATION MANAGEMENT
The unstoppable rise of information is one of the major trends that offers more opportunity than threat for the infrastructure industry. BIM is fundamentally about information, and it is proving revolutionary in enabling collaboration and integration. But it is only the tip of an information management iceberg.
BIM can provide continuity of information throughout the delivery process, from design to construction. But there is even more value in managing information throughout the asset’s whole lifecycle, combining data about its physical properties, condition and performance.
“Smart infrastructure”, fitted with instruments providing real-time feedback and control is now being created. And, as information technology begins to master big data management, an “internet of infrastructure” is emerging, offering the potential for even more customer-centred solutions that are not predicated on construction.
“Asset owners must provide leadership to shift the construction industry’s focus from output to outcomes. They understand the needs and expectations of their customers and can structure investment, procurement and reward to drive the industry to meet them,” says Richard Shennan, practice manager for buildings at Mott MacDonald.
A number of leading infrastructure industry organisations are already showing the way, creating the environment and imperative for change.
Transformation is in the air and, as the construction sector responds we, the customers, will benefit.
To find out more: www.mottmac.com