Putting Digital First

Putting Digital First

Putting Digital First

Jason Saundalkar talks to Suhail Arfath about the current state of the construction sector, and how Hloov intends to work with E&C firms to reduce waste, realize stronger margins and deliver value to clients.

With an increasing amount of attention being rightly given to #climatechange, #sustainability and circular economies, discussions and regulation relating to the handling of #construction and #demolition (C&D) waste has been increasing in recent years. This is long overdue given that construction and demolition waste typically comprises a significant amount of a city’s overall waste each year.

International studies focused on climate change and environment state that the construction sector is responsible for 40% of energy usage globally and 50% of landfill waste. Both are staggering figures that must be actively reduced for the good of the environment and future generations. The latter is the main focus of data, technology, and services startup, Hloov.

The E&C sector is on the cusp of an extraordinary technological revolution that will carry an industry mostly known for high-risk and low-margin to incredible new highs and deliver incremental global value. After all, the industry is up against some of the most critical global challenges including meeting infrastructure needs for the inflating global #population, the pressure to deliver #net-zero infrastructure, and, last but not least, known to be one of the top waste generating and low productive industries.”

Arfath explains that #capital project typically takes 20% longer to finish than scheduled and are up to a staggering 80% over #budget. “Over the past few years, a good percentage of large and medium #E&C firms have been investing in technology and #digitaltransformation with varying degrees of success. The COVID-19 pandemic has undoubtedly accelerated the pace of digital transformation and migration to the #cloud, significantly, shortening the reaction time to changes in the business environment.”

Fully cognizant of the pressures bought on by COVID-19, he adds, “However, investment plays a vital role in enabling a technological transition. ln the current unprecedented times and resultant #budget constraints, investing in exploring, choosing, and implementing the right solution may not be as easy as it sounds. So, there is an immediate critical need for technology-agnostic solution providers such as Hloov, with background and experience in the E&C domain processes, and strong expertise in #technology implementation, to play a crucial role in helping businesses who are changing and moving through their digital transformations at a fast pace.”

“Nearly 96% of all data captured in the E&C industry goes unused today; this loss of an invaluable resource and insight should no longer be acceptable. Project owners will start taking control of project data and take the lead to democratize data across project ecosystems to enable and empower teams to deliver value, not just contractual deliverables.”

Industry Turmoil

Arfath is a regional veteran with experience bridging technology and construction, having held positions at organizations such as Autodesk, Aikomus and Eigen (Laing O’Rourke). Discussing some of the impacts #COVID-19 has had on the regional construction sector and what he believes some of the long-term effects will be, he states that pre-COVID-19, the construction industry was already grappling with significant challenges from low margins, increased competition, and a reducing number of #projects. There is no doubt that the pandemic will leave an enduring impact on the sector, he says.

Conversely, he is optimistic about certain regional markets. “With about $1tn of projects planned or under construction through long-term, transformational masterplans, and megaprojects driven by the UAE and Saudi Vision 2030 programmes, there will not be a shortage of potential #opportunities. However, due to the complex nature of construction projects involving a village of various teams and workers from diverse trades to deliver the projects, there will be a paradigm shift in many areas to do things differently than done in the past. This includes reimagining with a #digital-first approach; investing in the workforce; democratizing data across project supply chains; design for manufacturing and assembly (DfMA) to take control of #schedule and #cost; and #net-zero #infrastructure focus.”

Asked to elaborate on #data democratization across a project’s supply chain, he comments, “Nearly 96% of all data captured in the E&C industry goes unused today; this loss of an invaluable resource and insight should no longer be acceptable. Project owners will start taking control of project data and take the lead to democratize data across project ecosystems to enable and empower teams to deliver value, not just contractual deliverables. Data won’t be left stuck and unused within an organization, role, or proprietary format; a seamless data flow and sharing will be the new norm.”

On the rise of #DfMA he states, “2021 will be a year of #vaccination and cautious travel, and minimum access to foreign #workforces. Therefore, it becomes more prudent to accelerate the adoption of more labor-efficient construction technologies and methods such as DfMA to reduce the reliance on foreign resources. According to industry reports, despite the increased initial cost associated with #modularconstruction, net #financial #savings of 7% are possible due to the shortened construction period. This potential saving can be vital for the project owners in the current challenging environment; thus, we will see more clients asking for the DfMA options from the supply chain in the corning years.”

Short-, Medium- & Long-Term Goals

Shifting focus to what he hopes to achieve with #Hloov within its first year of operations, Arfath is quick to point out that in 2021, empowering a small group of forward-thinking #owners, #operators, and #developers with a digital first approach to deliver carbon-neutral infrastructure on time and within budget is on the agenda. “We intend to help our clients achieve this by connecting #people, #process, and #technology,” he points out.

“With regards to people, we aim to #upskill and #reskill a client’s #workforce with current and emerging technologies in their day job scenarios, to #empower them to reimagining their business processes for a #resilient today and better tomorrow. On the process side, we aim to assist in reimagining their business and delivery processes and governance with a digital first approach and democratize data across their project ecosystem to enable teams to deliver tangible value.”

On technology, he says the plan is to implement modem and data-centric technologies to support and fast track a client’s digital transformation #strategy and #vision to a reimagined #builtenvironment to #reducewaste and #improveprofitability.

Summarizing, he says,

“The ultimate goal is to reimagine the built environment wherein the projects are conceived, #designed, #built, and #managed by leveraging a #digitaltwin – a virtual representation of real-world entities and processes, synchronized at a specified frequency and fidelity.”

As far the medium-to-long term objectives, Arfath explains, “Hloov’s vision is to realize a waste-free E&C sector that #designs, #builds, and #manages #carbon-neutral infrastructure for a resilient today and a better tomorrow. We plan to build a diverse and #innovation-driven organization wherein employees are passionate and encouraged to question the status quo and ask ‘why…’ often, empower our clients to #design, #build, and #manage #carbon-neutral infrastructure on time and budget by reducing waste, and deliver value to our partners and investors by meeting and exceeding our financial goals.”

With regards to markets that Hloov is keen on establishing a foothold in over the current and next few years, Arfath says the Middle East and India will be the areas of focus.

“Our strategy and investments are focused on supporting and catering to the region’s digital transformation needs of the E&C sector. We are setting up dedicated #innovation hubs in the #MiddleEast and #India to reimagine the built environment in the new technology-driven normal with particular attention to local needs. Our India delivery center will act as a primary resource provider for volumetric service offerings and developments to keep costs down.”

“The E&C sector is on the cusp of an extraordinary technological revolution that will carry an industry mostly known for high-risk and low-margin to incredible new highs.”

Potential Challenges

Asked about the challenges he anticipates and his plans to tackle them, Arfath comments, “With the vaccination rollout in progress, we believe the worst has been avoided, and the #globaleconomy could revive quickly. However, the situation remains precarious for many vulnerable people, firms, and countries, which might continue to stress E&C sector #cashflow and investment priority decisions.”

He continues, “To support our clients in these challenging, transitioning times, we have devised a ‘savings share’ business model where we, alongside our clients, invest our resources to identify and quantify the waste in their processes, projects, and or organization. We will go after those to make savings and our fee comes out as a nominal percentage of their actual savings. We are aware it is a fresh, risky, and #disruptive approach; however, this is our way of demonstrating our commitment to our client’s success by having our skin in the game. Our customer’s success is our true success.”

Making his closing statement, he concludes, “The pandemic might have triggered and accelerated the E&C sector towards the need for behavioral changes and digital transformation. However, we believe the industry has a once in a #lifetime #opportunity to go from #high-risk and #low-margin to a highly productive and profitable sector, while contributing to making this planet a better place by reducing its current 40% carbon emission contribution. It takes a village to deliver an infrastructure project, and it most certainly will take the whole E&C sector to save the #planet.”

The article was originally published in ME Consultant January 2021 issue. For link to the article click here. Courtesy: CPI Trade Media

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