Analysis

Has the digital revolution answered Latham’s challenge?

28 July 2019 | By Mark Coates and Antony Oliver

The construction sector is certainly ripe for digital transformation. But, 25 years after the Latham Review condemned the industry’s woeful performance, is the required change looking any easier to achieve, ask Mark Coates and Antony Oliver.

When Sir Michael Latham published his seminal, government-commissioned report Constructing the Team, he shined an uncompromising – and uncomfortable – light on an inefficient, fragmented, adversarial, and ineffective UK construction industry.

Yet, after a quarter of a century has anything truly groundbreaking changed for the better in this traditional and highly conservative sector? The answer, bar a few localised improvements, is a resounding no.

The so-called Latham Review caused quite a stir when published in July 1994 with its radical, hard-hitting take on the industry and its demands for massive reorganisation in the way that the industry was set up. In his 53 recommendations, Latham sought change throughout procurement and delivery practice with a transformation in the industry’s approach to teamwork through the adoption of collaboration and partnering across the supply chain. 

The report called out the industry for its inability to work collectively, and highlighted the need for government, as the biggest procurer of public infrastructure, to set an example by becoming a best-practice client. In short, Latham defined a new path toward greater productivity; with better quality outcomes for too-often dissatisfied clients, and greater rewards across a low margin and under-invested supply chain.

At last, it seems we have tools that actually deliver the whole-life approach that Latham envisioned and that clients demand – the incentive for clients to properly engage with and reward its integrated supply chain across the whole of that asset lifecycle.

However, it is clear that this path to a transformed industry remains significantly less well-trodden now than Sir Michael perhaps anticipated. Sadly, projects are still routinely over budget and behind schedule; collaboration still remains difficult; profit margins are still wafer thin; too much time is still spent arguing in and out of court.

Things have changed, of course. Massively, in fact. Across the whole of society and every industry, the march of digital communications technology has reshaped the way we live, the way we work, and the way we do business.

Over the past 15 years, throughout construction and infrastructure, we have seen improvements in efficiency achieved through the use of building information modelling (BIM). We have seen digital project collaboration tools that are capable of breaking down silos and driving the kind of cooperative partnerships that Latham envisioned. Now, we are advancing BIM toward the use of data and digital twins, coupled with the Internet of Things, artificial intelligence, and machine learning at our fingertips.

And, as we heard at the recent Bentley Systems Twin Talks breakfast meeting with Professor Mark Girolami of the Centre for Digital Built Britain, this emerging technology really can transform the way we design, construct, operate, and maintain our national infrastructure assets.

“Data is an opportunity to push forward from design toward more efficient operation,” explained Girolami, pointing out that a digitally built Britain starts with the question

“How do we construct and operate more effectively?” but really aims to answer the ultimate question for public clients “How do we live better?”

So, at last, it seems we have tools that actually deliver the whole-life approach that Latham envisioned and that clients demand – the incentive for clients to properly engage with and reward its integrated supply chain across the whole of that asset lifecycle. And, there really is motivation and a mechanism to underpin Latham’s view of collaboration, partnering, and a shared approach to managing risk.

Still, we see a reluctance to change across the sector – not just in the UK, but around the world. In fact, a recent survey of global infrastructure professionals by the leading global provider of software and digital twin services Bentley Systems highlights that 44% of 720 businesses questioned admit to not working digitally and having ineffective or inadequate systems to collect the vital data needed to monitor project and business performance.

A similar number admitted that persistence with paper-based and siloed storage systems effectively meant they had no capability for digital collaboration.

However, the work, referenced in a new Bentley Systems paper “Unlock the Benefits of Going Digital in Construction” points out that the majority of these digital underperforming businesses do actually understand the importance of collecting project data. Sadly, they don’t yet have the systems in place to take advantage of the digitisation.

This crazy situation has to change. Okay, the data in the infrastructure sector is very complex and spans many different disciplines. However, with new businesses increasingly emerging to disrupt existing traditional business models, it is critical for the survival of the sector that it quickly understands and embraces its required digital transformation.

As the paper suggests, that means firms should take action now to embrace the four Ps of going digital: Prepare for it; Pilot it; Probe it; and Process it.

It will not be an easy change to make. Alexandra Bolton, deputy director of the UK Centre for Digital Built Britain, highlighted the challenge in the organisation’s first annual report on progress: “No one should underestimate the size of the task we have set for ourselves. To create a digital built Britain will take a huge amount of change across industry.”

But the moment to start is unquestionably now. We cannot afford to wait another 25 years to begin.

Mark Coates is industry marketing director project delivery at Bentley, Antony Oliver is owner of Antony Oliver Consulting

Image: Viorel Dudau/Dreamstime.com