COVID-19 accelerates new ways of working in the Engineering, Construction, and Operations industry

COVID-19 is making people rethink where to live, how to commute, how to work, how to design, how to construct, how to source, how to operate, and how to maintain. Companies in the Engineering, Construction, and Operations (EC&O) industry are facing this rapidly changing reality, and those who can execute fast, innovative, and flexible responses, supported by digital technologies, will be better positioned to weather the changes and thrive. 

Prior to COVID-19, big cities were already seeing their populations dip, and the pandemic could accelerate this trend as people consider relocating to less densely populated areas. Innovation will be key and will create a new wave of smart city upgrades. According to the Arcadis 2020 ICC Index report for 100 of the world’s cities, “The impact of COVID-19 on public health is bringing a new understanding and awareness of the need to make our assets, cities, and communities more resilient.”

Cities are reimagining their transportation concept and considering smart infrastructure upgrades. As we’ve seen already happening in Europe, some cities are making less room for cars post COVID-19. For example, the city of Milan has been a leader with the intent to transform streets by adding biking lanes, introducing new speed limits, and creating wider pavements.

Real estate and other asset owners are asking themselves if their assets are still fit for purpose post-COVID-19. New developments will need to be “circular by design” to re-purpose and re-use assets consistently in the future. A good example is an office space or hotel that easily can be transformed into a hospital, like AECOM’s recent work transforming McCormick Place Convention Center in Chicago into an alternate care facility for patients with COVID-19 symptoms.

We expect a subset of people who are working remotely today to continue to do so after the pandemic, and that trend should grow even faster with Millennials and Generation Z. To support this, they will look for smart home upgrades including better connectivity, infrastructure, and work space.

In the area of managing employee health and worker safety post-COVID-19, more immediate insights will become very important. One example is the Port of Antwerp, where workers are testing smart watches that buzz if workers are too close, supporting the required social distancing of 1.5 meters.

We also expect that post-COVID-19, there’ll be more automation and robotics in intelligent EC&O workflows, with less human-to-human interaction to prevent disease transmission.

The current situation means supply chain ecosystems are disrupted, logistics are restricted, and mid-market suppliers and sub-contractors are vulnerable. Key workflows and ways of working need to be re-examined with tighter collaboration and better visibility across the supply chain ecosystem. The need for common language to collaborate is high, and the value of speeding up new regulations and standards like ISO 19650 is clear.

COVID-19 response

EC&O companies are working on a three-step approach to fight the battle and manage the journey back to operational stability, while preparing for the next normal: respond, recover and reinvent.

We believe the future of EC&O will be much more digital, with faster adoption of Industry 4.0, circularity, and the use of differentiating business platforms.

Respond

As we write this blog, enterprises have already taken actions to respond to the COVID-19 challenge. Companies in the EC&O industry have prioritized community and workforce health and safety. New partnerships have been initiated, such as VINCI teaming up with market research institute Ipsos on the Datacovid initiative. Its purpose “is to supply new, anonymous open data to scientists and public and private organizations, in order to track behavior in France, and its impact on the epidemic’s dynamics over time.”

What can E&CO companies do right now to address the immediate impacts of COVID-19?

1. Protect and support employees and stakeholders while moving to new ways of working and ecosystem collaboration
2. Stabilize IT, manage project risks, and secure operations and supply of critical equipment, material, components and labor.
3. Identify and reconfigure key elements of the enterprise operating model—and project delivery, resource-mix, and workflows—to conform to the new ways of working
4. Analyze risk (worst case/best case scenarios) across demand, supply, projects, and other financial metrics. Enable scenario modeling to manage risk in a volatile environment.

Recover

Having survived through the initial shock and assessed the magnitude of the pandemic’s impact, enterprises should prepare for a fast restart.

1. Drive cost optimization through sourcing, SG&A, improving productivity, reductions in cost of failure, workforce, and IT. This also includes optimizing CapEx/OpEx plans to release cash.  
2. Build a new and updated digital asset lifecycle services model conforming to the new normal. An example of this would be to enable tighter collaboration among strategic suppliers, customers,  and partners to get through the current reality.
3. Enable operational excellence within the reconfigured processes and resource mix. Conforming to the new ways of working. An example of this is the adoption of the connected built environment platform linking key project stakeholders through the lifecycle of the asset to reduce cost of failure resulting in savings of up to 10 percent of contract value. The DigiPlace initiative in Europe, for example, is moving toward a European digital platform for construction.
4. Identify and build foundational capabilities required for the new revenue and operating model. An example of this includes the need to set a future talent model with secure knowledge, skills, and other differentiating capabilities.
5. Enable data standardization and “platformization” that can be used internally and externally. For example, IBM worked with Fluor to build a data platform which integrates its current and historical project data for benchmarking, and better project reporting and control. This capability is now helping Fluor—with better project health and risk assessments, and scenario actions—
   to respond to the current challenges, leveraging cognitive intelligence for process efficiency and real-time analysis.

Reinvent

In the long term, to thrive post-pandemic, EC&O enterprises will have to align with next generation business models by leveraging new technologies and exploiting their core strengths.

1. Implement structural solutions to address new ways of working in the different normal across the enterprise, supply chain partners, and customers.
2. Build and leverage cognitive intelligence, on top of the data and other business service platforms, for process efficiency and real-time analysis.
3. Win in the marketplace with differentiated capability and lowest cost to serve

COVID-19 will be controlled. The economy will reopen. But life and business must evolve to meet the demands of a changed world. EC&O companies that take prudent short- and long-term actions now will be positioned to emerge from the current crisis stronger and more resilient.

IBM’s global team of experts is delivering new business insights to help our clients navigate disruption and prepare for the future. Click here to access our COVID-19 Action Guide and related resources.