- Sep 20, 2022 5:42 pm GMT
It’s no secret that there has been a lot of buzz around the recent $1.2 trillion U.S. Infrastructure, Investment and Jobs Act bill (IIJA) signed in November of 2021. In a recent live panel composed of seasoned industry pros from AECOM, Ernst & Young, Kiewit and InEight, we got beyond the hype and explored many of the real opportunities and challenges the industry faces inside the IIJA, including current macroeconomic dynamics and a discussion on the role of technology in addressing these challenges.
What follows is a summary of key insights into where the IIJA stands seven months after signing, how it’s being rolled out, and the crucial part digitalization is playing in bringing current and future infrastructure projects to life.
DOING THE (NEW) MATH
The IIJA numbers are big; $1.2 trillion and over 1,200 pages of explanation, not even counting the regulations that are being developed around all of this. The bill, in addition to its scale, provides a five-year path to truly think differently and to begin to plan projects around this new thinking.
The physical effectiveness will come as it catalyzes additional matching spend and the private investments that come along with that. At about 180 days since its passage, things are now at a point where agencies are adopting regulations around the bill and block funding is starting to move. Grant applications are beginning to appear, as are notices of future funding availabilities.
While new to some construction businesses, other organizations like DOTs are very familiar with managing similar federal funds, even with the bill’s new programs and flexibilities. Then there are entities like utilities and communications owners who are thinking about how to manage all of this. High on everyone’s list is how to work across programs and collaborate in more meaningful ways.
Why? Because with the advent of the IIJA, very different parties have begun to realize that they will have to start working together in new ways in order to be able to deliver on the program’s promise. One factor in this realization is that a lot of organizations are already operating very lean, maybe even leaner than ever as they come out of COVID-19 restrictions and limitations with a new perspective.
Whichever way you choose to look at it, to date, this is the biggest federal improvement spend in the U.S. since the construction of the interstate highway system. And with such massive spend comes a massive expectation for the industry to perform in more efficient and effective ways. The question then becomes, how best can everyone involved be productive and deliver on the promise that is in front of us? Failure, after all, is not an option. Fortunately, there is a way.
RETROFITTING VIA DIGITALIZATION
As impressive as the entire IIJA is, it’s important to also note that over $100 billion is earmarked for the adoption of advanced construction management technologies. It may help to think of this allowance as a sort of “digital retrofitting” opportunity for your infrastructure project management methods and processes. And when we’re talking about digital tools, it’s important to remember that we’re really talking about how people can be allowed to be more effective in their work.
In truth, all of this couldn’t have come at a more opportune time. Clients are desperate for predictable outcomes; predictable in terms of both the cost side of things and the schedule side. In the past, megaprojects have sometimes gone off the tracks in both these areas. Think of the infamous Big Dig of the 1990s where a project might start at a few billion dollars and, due to runaway costs and unforeseen risks, end up at 14 billion, finishing years after its initial projected completion date.
So how should you tackle this amazing opportunity? Considering how technically complex these projects will be, the only logical way to drive their innovation and certainty will be within a connected platform.
THE RIGHT TOOLS FOR THE JOB
The digital platform tools that are available now are and will be a key part of providing that certainty to your clients — and to your organization. If the industry can embrace the right tools now, it’s going to also provide an opportunity to do some optimization on the design side while driving innovation and achieving some true value engineering to address the client’s needs in a cost-effective and schedule-effective way.
It’s interesting to note that whether contractors, owners or engineers, only about 50% of construction professionals say that their projects generally finish on time and on budget. The main reason for this seems to be mostly due to not using repeatable processes from one project to the next. For example, a project team is depending on somebody’s best practice input on one job and also relying on someone else’s heavy experience on the next job. This traditional way of approaching knowledge is not only siloed but has been aggravated by the fact that a lot of the seasoned construction veterans are leaving the industry. This is why you need to ensure that you digitalize these processes and hand them down to the future leaders of this industry so that they can create their own repeatable processes to get you out of that “less than 50%” rut.
THE POWER OF A DATA-DRIVEN CULTURE
Historically for the industry, formerly tried and true, homegrown systems and data that are compartmentalized and siloed were common. It was very difficult to collaborate across everyone’s disciplines and experiences to drive better solutions to a particular problem. The idea of creating one version of project truth seemed like a distant dream, yet imagining it was irresistible. What if you could put a piece of data into a project and it would go where it needs to go and then be accessible across all the different platforms and you could then use that data? Thanks to acting on that dream, there are now digitalized platform tools enabling the use of enormous databases to draw project truth from, better informing current projects and future ones.
Beyond sharing reliable data, today’s data-driven technology culture allows you to make better-informed judgements about what a project is going to cost or how long a field activity ought to take. The benefits of such clear navigation are enormous, including the less obvious ones.
One of these is the help such a culture can provide when working through the National Environmental Policy Act (NEPA), an environmental process that has been around since 1970 in the U.S.
With digital tools that will help transition a static NEPA document into an actual interactive tool, you can create more meaningful engagement within the communities your projects serve by helping ensure that big complex projects are more closely aligned to economic outcomes. This better facilitates genuine engagement which reduces risks. By having that meaningful engagement and reducing risks, you will be better able to deliver more projects more successfully.
The ability to have the client, contractor, subs, suppliers and pretty much everybody working off of the same digital platform is valuable for another reason. They are all getting one version of project truth, yes, but they are also getting it in real time. This is huge because the biggest enemy of successful project delivery is lag time, either in information that gets skewed in one way or another or in information that’s late in coming to decision makers at all.
In the end, with any large complex project, there will always be obstacles. But if you can have a team of contractors and an owner that have a balanced risk profile and that also have the flexibility to manage changing project environments together — like the very volatile current environment with increasing prices and other fluctuating dynamics — you will have a much better chance of smoothing your path to project success.
FAIL-PROOFING THE ADOPTION OF DIGITALIZED TECHNOLOGY
Technology’s place in driving solutions and success against challenging procurement models, labor shortages, material costs is non-negotiable today. But so must be efforts to help fail-proof the adoption of digital technologies within our industry. Think of this as “de-risking” the process. How does this happen?
When you’re going through any kind of transformation, the first thing you must do is have a sharp vision for why you’re doing it and what you want to get accomplished. You want your company to become a successfully data-driven organization and rally everything and everyone around that. A clear vision — and the ability to make that vision real for your entire team — is crucial to making this happen.
Another area the industry must cultivate a passion for in order to drive positive change in our organizations, whether concerning infrastructure projects or any other project, is executive leadership. This is so important because there are and will be challenges and hiccups on our way to digitalization, so strong leadership is essential in smoothing out those issues and keeping all of us on track.
The payoff? Once our industry fully embraces a repeatable, predictable digitalized platform and process, everyone will be better able to deliver on projects consistently every single time — on time, on budget.
FOR THOSE WHO HAVE YET TO BEGIN THEIR DIGITAL JOURNEY
These are our interstate highway days. Therefore, if you can come together with your engineering partners, clients and other stakeholders and figure out the best ways to drive certainty and get the highest value for those precious federal dollars, you and all whom you serve throughout our nation will win and win big.
When you think about it, the digital tools themselves are the easy part. Empowering people to adopt them and then to start really embracing the tools; that’s the challenge.
The digital wave is here and it’s going to get better and the opportunities are going to get bigger. But you’ve got to get started at some point. Is it going to get easier two or three years from now? Probably not. The time to act is now, for if not now, when?
Ready to take a deeper dive? InEight can help get your projects where they need to go and help you create a solution that matches your needs while leveraging your teams’ existing strengths. Let us show you how.
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